Merrill Lynch INVESTMENT ADVISORY PROGRAM
Merrill Lynch INVESTMENT ADVISORY PROGRAM
WRAP FEE PROGRAM BROCHURE
Please retain for your records
Merrill Lynch, Pierce, Fenner & Smith Incorporated One Bryant Park
New York, NY 10036 800.637.7455
Managed Account Advisors LLC 101 Hudson Street
Jersey City, NJ 07302 201.557.0504
This Brochure provides information about the qualifications and business practices of Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S) and Managed Account Advisors LLC (MAA) relating to the Merrill Lynch Investment Advisory Program. If you have any questions about the contents of this Brochure, please contact us at 800.MERRILL (800.637.7455).
Please note that the information in this Brochure has not been approved or verified by the United States Securities and Exchange Commission (SEC) or by any state securities authority. Investment adviser registration does not imply a certain level of skill or training. Additional information about MLPF&S and MAA also is available on the SEC's website at adviserinfo..
The investment advisory services described in this Brochure are not insured by the Federal Deposit Insurance Corporation (FDIC) or any other government agency, are not a deposit or other obligation of or guaranteed by MLPF&S, MAA or Bank of America Corporation (BofA Corp.) or any of its affiliates and are subject to investment risks, including possible loss of principal.
March 22, 2024
Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as "MLPF&S" or "Merrill") makes available certain investment products sponsored, managed, distributed, or provided by companies that are affiliates of Bank of America Corporation ("BofA Corp."). MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of BofA Corp. Merrill Lynch Life Agency Inc. (MLLA) is a licensed insurance agency and a wholly owned subsidiary of BofA Corp. Investment products offered through MLPF&S and insurance and annuity products offered through MLLA:
Are Not FDIC Insured Are Not Insured by Any Federal Government Agency
May Lose Value Are Not Deposits
Are Not Bank Guaranteed Are Not a Condition to Any Banking Service or Activity
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ITEM 2. MATERIAL CHANGES
On March 20, 2023, MLPF&S and MAA together filed their last annual update for the Merrill Lynch Investment Advisory Program brochure (Brochure). This summary of material changes is designed to make clients aware of information that has changed since the Brochure's last annual update or that may be important to them. It also sets forth changes as well as enhancements made in this annual update as well as those made since the 2023 annual update, which were previously communicated.
MATERIAL CHANGES AND ENHANCEMENTS MADE AS PART OF THIS ANNUAL UPDATE
? We enhanced our disclosures by providing additional information regarding the treatment of cash balances and the nature of the Cash Sweep Program and about the cash allocation at the Program Strategy level for operational and implementation and/or investment purposes. See "Item 4 Treatment of Cash Balances in your Account;" "Item 4 Brokerage, Banking-Related and Custodial Arrangements and Services;" "Item 4 Funding and Operation of Accounts;" "Item 9 Compensation, Conflicts of Interest and Material Relationships--Cash Sweep Program Compensation Received by Us and Our Affiliates;" and "Item 9 Participation or Interest in Client Transactions and Conflicts of Interest."
? We included additional information about the ability of a Style Manager and a PAS Manager to allocate or invest in Manager-Related Funds in their strategy portfolios. See "Item 4 Investment Strategies Available;" "Item 4 Funding and Operation of Accounts;" and "Item 9 Compensation, Conflicts of Interest and Material Relationships--Affiliated Investments of a Style Manager or a PAS Manager."
? We have clarified that for any securities held in an Account at an Affiliated Custodian or an Unrelated Custodian, you retain the right to vote proxies or delegate to the Proxy Delegation Vendor and clarified other matters related to interaction with any such custodian. See "Item 4 Proxy Voting--Implementing Your Proxy Voting Selection."
? We have clarified that you are not eligible to elect periodic trade confirmation delivery for any securities held in an Account at an Affiliated Custodian and that in our discretion and from time to time, we will take action to ensure trade-by-trade confirmation delivery for your Account. See "Item 4 Delivery of Trade Confirmations on a Periodic Basis."
MATERIAL CHANGES AND ENHANCED DISCLOSURES MADE SINCE THE LAST ANNUAL UPDATE Set forth below are material changes and enhancements that we made to the Brochure since the last annual update in March 2023:
MAY 19, 2023 BROCHURE UPDATE
Material Changes and Enhancements: ? We updated Item 9 "Additional Information" at the heading "Disciplinary Information" as follows: "On April 3, 2023, the SEC issued an administrative order in which it found that MLPF&S had willfully violated Section 206(2) and (4) of the Advisers Act and Advisers Act Rule 206(4)-7. Specifically, the order found that from May 12, 2016 through June 29, 2020: (1) wrap fee advisory program agreements and ADV brochures contained a material misstatement because, while disclosing that MLPF&S charged a mark-up or mark-down on foreign currency exchanges, the disclosure did not also state that an additional fee referred to as a production credit was also charged and (2) there was a failure to adopt and implement written policies and procedures reasonably designed to prevent violations of the Advisers Act in connection with disclosures relating to currency transfers requiring foreign currency exchanges that it processed for its wrap fee clients. MLPF&S, without admitting or denying the findings, consented to the imposition of a cease-and-desist order, censure, payment of disgorgement, prejudgment interest and a civil penalty totaling $9,694,714."
? We enhanced our disclosures about managed investment strategies, including those of our affiliate BANA, offered in other investment advisory programs at Merrill and directly by BANA. See "Item 4 Ability to Obtain Certain Services Separately and for Different Fees Programs."
OCTOBER 27, 2023 BROCHURE UPDATE
Material Changes and Enhancements: ? We enhanced our disclosure about the recruiting arrangements we may make to point out that recruited Advisors are eligible for future bonus payments based on the assets that transfer to Merrill, including from the Advisor's prior firm and to highlight that this feature of our arrangements creates a conflict of interest. See "Item 9 Compensation, Conflicts of Interest and Material Relationships--Compensation and Benefits to Merrill and Financial Advisors."
? We updated our disclosure to provide that Merrill and its Affiliates limit the overall aggregate ownership of certain Registered Funds by certain Program Accounts to avoid potential restrictions on the ability of our Affiliates to engage in principal trading and other transactions with those Registered Funds. See "Item 9 Participation or Interest in Client Transactions and Conflicts of Interest--Activity by Merrill, Affiliates and Personnel."
JANUARY 5, 2024 BROCHURE UPDATE
Material Changes and Enhancements: ? We made changes to the presentation of conflicts of interest in "Item
9 Compensation, Conflicts of Interest and Material Relationships-- Compensation and Benefits to Merrill and Financial Advisors-- Compensation Approach for Advisors" relating to financial advisor compensation to describe the current incentive compensation award criteria that are based on meeting growth targets from the prior year in assets and liabilities and in new household as well as to the movement of client assets into specific types of programs and services.
? We modified our policies to provide that participating Third-Party Firms can reimburse Merrill for the eligible costs of training and educational seminars and meetings for financial advisors and clients and related to business meals as disclosed in "Item 9 Compensation, Conflicts of Interest and Material Relationships-Third-Party Firm Business Relationships and Support."
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ITEM 3. TABLE OF CONTENTS
About Us and the Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ITEM 4 SERVICES, FEES AND COMPENSATION . . . . . . . . . . . 6
Advice and Guidance Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Profiling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Setting a Target Asset Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Target Asset Allocation Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Monitoring Adherence to Target Asset Allocation . . . . . . . . . . . . . . . . . . 6 Ability to Establish Multi-Client Portfolios Groups. . . . . . . . . . . . . . . . . . 6 Program Guidelines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Treatment of Cash Balances in Your Account . . . . . . . . . . . . . . . . . . . . . . 6 Cash Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Cash Alternative Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Rates Paid and Fees Charged on Cash and Cash Alternatives . . . . . . . . 6
Investment Strategy Services Available . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Overview and Program Strategy Types . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Ability to Request Reasonable Investment Restrictions . . . . . . . . . . . . . 8 Managed Strategy as a Program Strategy Option . . . . . . . . . . . . . . . . . . 9 Custom Managed Strategy as a Program Strategy Option. . . . . . . . . . 11 Premium Access Strategy as a Program Strategy Option . . . . . . . . . . 13 Defined Strategy as a Program Strategy Option . . . . . . . . . . . . . . . . . . 15 Personalized Strategy with Advisor Discretion as a Program Strategy Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Personalized Strategy with Client Discretion as a Program Strategy Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Portfolio Reviews, Program Reports and Information. . . . . . . . . . . . . . 17
Brokerage, Banking-Related and Custodial Arrangements and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Brokerage Trading Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Brokerage Execution for Discretionary Style Manager Strategies
and PAS Style Manager Strategies. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Brokerage Arrangements for Certain Securities Transactions . . . . . . . 18 Cash Sweep Program and Other Banking-Related Services . . . . . . . . . 19 Custodial Arrangements and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Proxy Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Proxy Voting Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Implementing Your Proxy Voting Selection . . . . . . . . . . . . . . . . . . . . . . . 21 Voting Policies; Role of the PAS Manager, Merrill and MAA. . . . . . . . . 22
Delivery of Trade Confirmations on a Periodic Basis . . . . . . . . . . . . . . 22
Delivery of Program Materials and Electronic Access . . . . . . . . . . . . . . 23
Optional Account Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 MAA Tax Efficient Management Overlay Services. . . . . . . . . . . . . . . . . 23 Rebalancing Service and Automatic Contribution or Withdrawal Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
The Program Fee and Other Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 The Merrill Lynch Fee Component of the Program Fee. . . . . . . . . . . . . 24 The Manager Fee Component of the Program Fee . . . . . . . . . . . . . . . . 25 Payment of the Program Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 How the Program Fee is Charged . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Services Covered by the Program Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Fees and Expenses Not Covered by the Program Fee . . . . . . . . . . . . . . 28
Ability to Obtain Certain Services Separately and for Different Fees . 29 The MGI, MGI with Advisor and MEAA Programs. . . . . . . . . . . . . . . . . . 29 Access to Managed Strategies through Other Investment Advisory Programs at Merrill and its Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . 29
Funding and Operation of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Enrolling and Funding Your Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Holding Funds in your Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Contributions and Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Cash Balances and the Cash Sweep Program. . . . . . . . . . . . . . . . . . . . . 31 Your Responsibilities for Account Operation and Management. . . . . . 32 Closing an Account and/or Terminating the Agreement . . . . . . . . . . . . 32 Legal Matters and Related Notifications. . . . . . . . . . . . . . . . . . . . . . . . . 33 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ITEM 5 ACCOUNT REQUIREMENTS AND TYPES OF CLIENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Client and Financial Advisor Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Program Minimums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Retirement Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ITEM 6 PORTFOLIO MANAGER SELECTION AND EVALUATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Selection and Review of Investment Strategies and Funds Available in the Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Selection Approach and CIO Review Process . . . . . . . . . . . . . . . . . . . . . 35 Available Information Regarding Investment Strategies
and Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Strategy Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Style Manager Strategies Where Merrill, MAA or its Affiliate is the Style Manager. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Advisory Services Provided by Merrill, Certain Affiliates and Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Performance-Based Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Methods of Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Investment Strategies and Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Tailored Investment Advice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Voting Client Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ITEM 7 CLIENT INFORMATION PROVIDED TO PORTFOLIO MANAGERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 ITEM 8 CLIENT CONTACT WITH PORTFOLIO MANAGERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 ITEM 9 ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . 40
Disciplinary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Other Financial Industry Activities and Affiliations . . . . . . . . . . . . . . . . 41
Conflicts of Interest and Information Walls. . . . . . . . . . . . . . . . . . . . . . . 41
Code of Ethics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Compensation, Conflicts of Interest and Material Relationships . . . . 42 Compensation and Benefits to Merrill and Financial Advisors . . . . . . . 42 Field Management and Merrill Management Compensation . . . . . . . . 43 Referral Program and Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Account and Program Choice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Affiliated Investments of a Style Manager or a PAS Manager. . . . . . . 44 Offering of Investments or Programs Managed by Us or Our Affiliates and Use of a Related Strategy in Your Account . . . . . . . . 44 Variable Compensation by Product and Service . . . . . . . . . . . . . . . . . . . 45 Compensation Received by Us for Sub-accounting Services . . . . . . . . 45 Mutual Funds Arrangements and Compensation . . . . . . . . . . . . . . . . . . 45 Certain Alternative Investment Fund Arrangements and Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Cash Sweep Program Compensation Received by Us and Our Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Other Compensation Received by Us and Our Affiliates. . . . . . . . . . . . 47 Third-Party Firm Business Relationships and Support . . . . . . . . . . . . . 48
Participation or Interest in Client Transactions and Conflicts of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Cash Balances and Cash Sweep Program . . . . . . . . . . . . . . . . . . . . . . . . 49 Principal Trade Execution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Internal Cross, Agency Cross and other Cross Transactions. . . . . . . . . 50 Treatment and Allocation of Equity Initial Public Offerings . . . . . . . . . 50 Order Flow, Order Routing and Rebates . . . . . . . . . . . . . . . . . . . . . . . . . 50 Participation in Affiliate Lending Programs and Margin . . . . . . . . . . . . 50 Provision of Diversified Financial Services . . . . . . . . . . . . . . . . . . . . . . . 51 Activity by Merrill, Affiliates and Personnel . . . . . . . . . . . . . . . . . . . . . . 51 Covered Entities under the Volcker Rule . . . . . . . . . . . . . . . . . . . . . . . . . 51
Account Review and Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Referral Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
All capitalized terms used in the Brochure are defined in the body of this Brochure and/or in the Glossary.
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Merrill Lynch Investment Advisory Program
Brochure
About Us and the Program Both Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S) and Managed Account Advisors LLC (MAA), its Affiliate, offer investment advisory services under the Merrill Lynch Investment Advisory Program (Program or IAP) as discussed in this Brochure. Both MLPF&S and MAA are registered with the U.S. Securities and Exchange Commission (SEC) as an investment adviser and MLPF&S is registered as a broker dealer. Our parent company, Bank of America Corporation (BofA Corp.), through Bank of America, N.A. (BANA), BofA Securities, Inc. (BofAS) and other Affiliates, provides integrated investment services and is a leading banking institution for consumers, corporations and institutions. When we use the terms "Merrill," "we," "our" or "us" in this Brochure, we are generally referring to MLPF&S. We also use the terms "Merrill," "we," "our" or "us" to apply to both MLPF&S and MAA for those aspects and services of the Program that MLPF&S and MAA perform jointly. We also indicate where certain services are provided by MAA in its separate capacity.
Our Services as an Investment Adviser and Relationship with You under the Program You work with your dedicated personal Merrill financial advisor to determine if the Program is appropriate for you given your financial goals and circumstances. Certain services and investment solutions and products available under the Program are only provided by a financial advisor who meets certain qualifications. You will receive a disclosure document called the "Form ADV Part 2B--Brochure Supplement," which describes information about the financial advisor or advisors you are working with, their designation, role and the services they can provide, among other things. At Merrill, you can work with:
? An Advisor with the designation "Wealth Management Advisor," "Private Wealth Advisor," "Financial Advisor" or "Portfolio Advisor," who offers the full complement of Program strategies and investment solutions available under the Program provided certain Program or product qualifications have been met.
? A "Merrill Financial Solutions Advisor" or "MFSA," who, based on our internal polices, offers only designated managed strategies available in the Program.
We can change our designations, roles and services for our financial advisors in our discretion and at any time. In this Brochure, we use the general term "financial advisors" to refer to both our Advisors and MFSAs. You will also receive Form ADV Part 2B-Brochure Supplements for other Merrill investment professionals who provide portfolio management services for the investment strategies we offer in your enrollment materials.
Both Merrill and MAA provide services under the Program in their capacity as a registered investment adviser under the Investment Advisers Act of 1940, as amended (Advisers Act). To obtain the investment advisory services and range of financial services and investment solutions under the Program as described in this Brochure (Services or Program Services), you will enter into a written agreement with us (Agreement) that expressly acknowledges our investment advisory relationship with you and describes our obligations to you under the Program. This Brochure describes the Program Services we provide, the fees you will pay, our role and that of our personnel, our other business activities and financial industry affiliations and the economic and other benefits and arrangements that create conflicts of interest in certain situations.
The scope of our investment advisory relationship is defined in the Agreement and applies to your Accounts enrolled in the Program. Termination of an Account's enrollment in the Program will end that investment advisory fiduciary relationship with respect to that Account and will cause the Account to be converted to, and designated as, a Merrill brokerage account. Termination of the Agreement will end the investment advisory fiduciary relationship of any and all Accounts enrolled in the Program and cause them to be converted to a brokerage account.
Merrill can help fulfill your wealth management needs in our capacity as an investment adviser, as a broker-dealer, or as both. Investment advisory and brokerage services are separate and distinct and each is governed by different laws and separate contractual arrangements that we may have with you. Our relationship, legal duties and capacities to you under federal securities laws are subject to a number of important differences which are described in our Client Relationship Summary on Form CRS (Form CRS) and in the Summary of Programs and Services, both of which are available at relationships or upon request. In addition, these documents provide a summary of the other available investment advisory programs we offer. Certain aspects of these investment advisory programs are similar to the Services available in the Program. Please refer to "Item 4 Ability to Obtain Certain Services Separately and for Different Fees."
Under the Program, we are a fiduciary to you. Merrill and MAA each have certain fiduciary obligations in providing the Program Services. As a fiduciary, we will act in your best interest and will endeavor to provide you with access to material facts and information relating to the Program services. This Brochure is a key element in meeting this disclosure obligation. The fiduciary standards we aim to follow are established under the Advisers Act and, where applicable, state laws. In addition, for Retirement Accounts, we provide the Program Services as a "fiduciary" under Section 3(21) of the Employee Retirement Income Security Act of 1974 (ERISA) and under the Internal Revenue Code of 1986 (Code). For Retirement Accounts subject to ERISA that are discretionary accounts managed by us, we provide the relevant Services as an "investment manager" under Section 3(38) of ERISA.
Generally, the Program is designed for clients who:
? Want to implement an investment plan or strategy with the advice and guidance of their dedicated personal financial advisor.
? Want access to an investment professional for the management of their investment assets.
? Want discretionary investment management services.
? Want to receive the Program Services, including target asset allocation and other monitoring as described in this Brochure.
? Anticipate trading activity in the Account, including rebalancing transactions.
? Prefer the consistency of asset-based fee pricing for their transactions.
While this Program is designed to help clients meet a variety of investment needs, it may not be appropriate for clients who:
? Have an interest in maintaining consistently high levels of cash and/or cash alternatives in their account for an extended period of time.
? Plan to engage in little to no investment activity, including rebalancing transactions.
? Maintain concentrated positions in securities and anticipate there being little to no selling or rebalancing activity over time.
? Want to engage in excessive trading and "day trading" activity or want to engage in a significant level of unsolicited trade activity.
? Are not interested in target asset allocation and other monitoring or complying with Program guidelines.
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YOUR RELATIONSHIP WITH US & OVERVIEW OF THE PROGRAM
Overview of the Program
Discovery
Your dedicated financial advisor gets to know you on
a personal and financial level and works with you to identify your financial goals
and objectives.
Determine Target Asset Allocation
You and your financial advisor work together on a
personalized financial strategy based on your financial
situation and your Account's risk tolerance and time horizon.
Select Strategies & Investments
You select the way you want your investment portfolio to be managed, choosing from a robust offering of investment solutions, including those from
Merrill and third-party managers.
Receive Advice & Adjust your Portfolio
You access your financial advisor when and as needed to manage your investment portfolio and to rebalance and
adjust your investments.
Client Reviews
You and your financial advisor review, on at least
on an annual basis, the status of your investment portfolio and strategies and make changes to help meet
your financial goals.
For your accounts enrolled in the Program (each, an Account), Merrill will provide you with personalized investment advice and guidance through your dedicated financial advisor and the Program Services described in this Brochure.
For each Account, you will select how you want your assets to be managed in the Program in accordance with our available Program Strategy types. You may group one or more Accounts together into a Portfolio Group for ongoing portfolio management to a selected Target Asset Allocation and for consolidated reporting.
The Program offers managed investment strategies of third-party managers and of Merrill as well as the ability to invest on a discretionary or client-directed basis in individual securities and other investment products, including equities, fixed income securities, mutual funds, exchange traded funds, closed-end funds, unit investment trusts, pooled vehicles, and those investments designated by us from time to time in our sole discretion that have risk and return characteristics not generally correlated with more traditional investments (Alternative Investments). The Program allows you to manage your investment assets under our available Program Strategy types.
The nature of the investment approach you take for the investment and management of the assets in your Account and the type of financial advisor with whom you have chosen to work will determine the investment solutions available for your Account. MFSAs can only offer you access to certain designated managed strategies. You can work with your Advisor or MFSA to select investment strategies managed by approved third-party investment managers and by Merrill and MAA investment management professionals. When you work with an Advisor, you can also delegate investment discretion to your Advisor or another Advisor and/or you can retain investment discretion over your investments while receiving advice and guidance from your Advisor.
We charge a Program Fee for each Account. This Brochure provides detailed information about the Program Fee, how it is determined, how you are billed, what it does not cover and about the compensation we and our financial advisors receive. Please review the section "The Program Fee and Other Charges" carefully. The Program Fee per Account you pay may differ from that paid by other clients based on the scope and size of relationships and accounts, the complexity of the client's needs, and the role, practice approach and qualifications of your financial advisor, as well as other factors.
By enrolling in the Program and paying the Program Fee, you have access to:
? Investment advice and guidance services of your financial advisor and those services delivered through us. ? Managed investment strategies from third-party investment managers or from Merrill and its Affiliates. ? Investments in individual securities selected by you or, if you grant investment discretion, by your Advisor. ? Certain incidental services, such as trading, execution and settlement for trading, custody, performance reporting, and related account services. We will execute any transactions in your Account in accordance with our best execution obligations. We supervise the Program Services, our financial advisors and other personnel responsible for the Program in accordance with our obligations under the Agreement, the Program guidelines that we establish from time to time and the ethical standards we require.
There are certain material relationships and conflicts of interest discussed in this Brochure, including those described in "Item 9 Compensation, Conflicts of Interest and Material Relationships" and "Item 9 Participation or Interest in Client Transactions and Conflicts of Interest." Please review these sections carefully before you make a decision to enroll an account in the Program. Details of the Program are provided throughout this Brochure.
IAPB-032024
Investment Advisory Program Brochure | 5
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