Direct Business Procedures
All transactions $50 and greater are required to be displayed on the trade blotter. In many cases, the transactions will autopopulate on the trade blotter based on size of the transaction or the system on which the trade was placed. The table will detail the transactions required to be reported on the Branch Trade Report and below you will find some product specific procedures.
Transaction Type
Is Advisor Reporting on the BTR Required?
Additional Details
Non-networked mutual funds & non-networked 529 transactions in excess of $2,000
YES
Non-networked mutual fund and non-networked 529 plan transactions greater than $2000 need to be reported by the advisor. Transactions ranging from $50 – $2000 will auto-populate.
Subsequent variable annuity purchases direct with the carrier over $2,000.
YES
Subsequent transactions greater than $2000 need to be reported by the advisor for networked and non-networked accounts. All initial VA purchases must be processed through Annuity Order Entry on Clientworks.
All fixed annuity transactions over $2,000
YES
Transactions greater than $2,000 need to be reported by advisor on the BTR
Fixed annuity transactions $50 - $2000
DEPENDS ON CARRIER
All transactions will be automatically populated on the trade blotter with the exception of AIG, Allianz, American Skandia/ Prudential and Zurich. The Advisor would be required to
report Fixed Annuity purchases of these carriers as they do not provide the required data to LPL Financial.
Networked mutual fund and networked 529 plans
NO
Do not need to report, will automatically be submitted to trade blotter.
Mutual fund transactions entered through mutual fund direct automation
NO
Do not need to report, will automatically be submitted to trade blotter.
Variable annuity purchases through the Annuity Order Entry System & subsequent transactions with the carrier betweeen $50 - $2,000
NO
Do not need to report, will automatically be submitted to trade blotter.
Variable annuity liquidations
NO
Do not need to report, will automatically be submitted to trade blotter.
Additional Details
FINRA requires broker/dealers to report all client transactions on a consolidated trade blotter. However, you may have clients who wish to continue doing business directly with a sponsor. By using the Branch Trade Report (BTR), LPL has provided an automated way for you to report these transactions efficiently. All transactions recorded in the BTR are automatically captured for OSJ review. The BTR also captures suitability and anti-money laundering required data and allows LPL to conduct surveillance of client transactions done directly with the sponsor. These entries also enable LPL to do the privacy policy mailing to your direct business clients.
By using the BTR, you can obtain consolidated client data by networking directly held positions to an outside investment (or “shell”) account on the LPL system or an existing account that is appropriate for networking. The networked positions will be visible on Clientworks and on LPL Account View for your clients. If networked to an existing brokerage account, the positions will also show below the line on customer statements and on the consolidated householding page.
- Deliver the prospectus and record it on the Prospectus Delivery Log [Form F631].
- Open the LPL account. (Note: 529 plan accounts should be opened under the owner’s SSN, not the beneficiary’s/child’s.)
- Image a copy of the Fund Company Application into the LPL account via iDoc.
- E-mail a fully completed 529 College Savings Plan Disclosure Checklist [Form F423] to documents@indsquare.com for review and approval. (ISQ will image this form into the LPL account once it’s in good order.)
- If a prospectus product was sold to fund the transaction, e-mail a fully completed Investment Switch [Form F27] to documents@indsquare.com. For more information on how to fill out Form F27, please review Switching Products.
- Once the 529 account is funded and an account number has been assigned by the fund company (you have received a trade confirmation in the mail), enter the initial transaction on the Branch Trade Report (BTR). (See the Direct Business Transaction Reporting Guide for more information on which additional 529 deposits are required to be entered on the BTR.)
- Please refer to LPL’s 529 Plan Compliance Guide for more information.
LPL Financial requires the advisor to report the annual premium amount for all insurance and VUL policies, except for Phoenix Life transactions less than $2,000. The advisor is also responsible for reporting any changes to the annual premium and initial lump sum transfers into the policy. Insurance includes but is not limited to fixed, long-term care, disability, term life and variable.
Here are the three possible scenarios regarding the reporting of fixed insurance:
If the advisor submits fixed life insurance business through Insurance Associates, Inc. (IAI), then all paper reports go through IAI and not the Branch Trade Report (BTR). No reporting is required. Variable life will still need to be entered on the BTR.
Insurance that is done through Westlin, BISYS, Marsh and CentreLink is paid through LPL Financial. All insurance processed and paid through LPL Financial needs to be reported on the BTR.
If the insurance is done as part of an outside business and the commissions are paid directly to the advisor or the insurance company for which the advisor works, then the sale does not need to be on the BTR. In this instance, an Outside Business Activity/DBA Notification Request Form needs to be submitted.
- Deliver the prospectus and record it on the Prospectus Delivery Log [Form F631].
- Open the LPL account.
- Image a copy of the Fund Company Application into the LPL account via iDoc.
If a prospectus product was sold to fund the transaction, e-mail a fully completed Investment Switch [Form F27] to documents@indsquare.com. For more information on how to fill out Form F27, please review Switching Products. - Once the account is funded and an account number has been assigned by the fund company (you have received a trade confirmation in the mail), enter a Branch Trade Report (BTR) for the initial transaction. (See the Direct Business Transaction Reporting Guide for more information on which additional investments should also be entered on the BTR.)