Form ADV Part 3: Relationship Summary AE Wealth Management, LLC
AE Wealth Management is an investment adviser registered with the U.S. Securities and Exchange Commission. We offer our clients investment advisory services. Clients should understand that the services we provide and fees we charge are different than those of a broker-dealer, and that it is important to understand the difference between the two. Free and simple tools are available to research firms and financial professional at https://www.investor.gov/CRS, which also provides educational materials about investment advisers, broker-dealers and investing.
What Investment Services and Advice Can You Provide Me?
Description of Services: We offer the following investment advisory services to retail investors. (1) Asset Management Services provided as either direct asset management services, where one or more of our investment adviser representatives are solely responsible for all investment decisions and the management of your account(s), or where our investment adviser representatives use our internal investment committee and/or third-party, non-affiliated model managers (who we evaluate, select, and monitor) to manage and trade your account(s). We will discuss your investment goals and design a strategy to try and achieve your investment goals. We will continuously monitor your account when providing asset management services and contact you at least annually to discuss your portfolio. We manage accounts through both wrap fee programs and non-wrap fee programs. Asset management services are provided on a discretionary basis, meaning we or the model manager(s) will have the authority to determine the type and amount of securities that can be bought or sold for your portfolio without obtaining your consent for each transaction. For more information about investment authority, please see Item 16 of our Form ADV Part 2A. (2) Financial Planning & Consulting Services: We also provide financial planning and consulting services. Financial planning services involve us creating a written financial plan for you which covers mutually agreed upon topics. Financial consulting is used when a written financial plan isn’t needed. It involves one time and/or ongoing meetings to discuss your financial situation. Please see Item 4 of our Form ADV Part 2A for more information about Asset Management and Financial Planning services.
Limited Investment Offerings: We do not primarily recommend one type of security to clients. Instead, we recommend investment portfolios designed to be suitable for each client relative to that client’s specific circumstances and needs.
However, we are limited in investment selection in that we can only invest your account in securities which are available on your custodian platform. When providing you services, we do not recommend or offer advice on any proprietary products.
Account & Fee Minimums: We require a minimum of $10,000 in order to open an account managed by us.
Conversation Starters: Given my financial situation, should I choose an investment advisory service? Why or why not? How will you choose investments to recommend to me? What is your relevant experience, including your licenses, education and other qualifications? What do these qualifications mean?
What Fees Will I Pay?
Description of Principal Fees & Costs: (1) Fees charged for our Asset Management Services are charged based on a percentage of assets under management, billed in arrears on a monthly basis, and calculated based on the average daily balance of your account during the billing period. The maximum annual fee for our asset management services does not exceed 2.50%. Because our fee is based upon the value of your account we have an incentive to recommend that you increase the level of assets in your account. We utilize wrap fee and non-wrap fee programs. Under a wrap fee program the fee you pay us covers both our advisory services and the transaction fees imposed by the broker-dealer. Under a non- wrap fee program you will be charged transaction costs separately. Since a wrap fee covers transaction expenses it tends to be higher than non-wrap fee programs. You will also be charged internal fees and expenses by the funds we invest in within your account. (2) Depending on the respective investment adviser representative providing the service, Financial Planning and Consulting services can be provided under an hourly fee arrangement ranging between $0 and $500 per hour or a fixed fee ranging between $0 and $10,000. All fees are due immediately upon completion and delivery of the financial plan or consultative meetings/project. Any fees we charge for financial planning and consulting services will not cover the costs associated with implementing any recommendations we may make.
Additional Information: You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying. For more information about the fees we charge and the other fees and expenses you will incur, please see Item 5 of Form ADV Part 2A and Item 4 of our Form ADV Part 2A: Appendix 1.
Conversation Starters: Help me understand how these fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?
What Are Your Legal Obligations to Me When Acting as My Investment Adviser? How Else Does Your Firm Make Money and What Conflicts of Interest Do You Have?
Standard of Conduct: When we act as your investment adviser, we have to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the investment advice we provide you. Here are two examples to help you understand what this means. (1) We ask that you establish an account with TD Ameritrade or Fidelity to maintain custody of your assets and to effect trades for your account. Our recommendation to use TD Ameritrade and Fidelity is not based solely on your interest of receiving the best execution possible. We also recommend them because they provide us with research, products and tools that help us manage and further develop our operations. Not having to pay for such benefits saves us money but also creates a conflict of interest. (2) We receive expense reimbursement for travel and marketing expenses from distributors of investment and/or insurance products which is a conflict of interest because it creates an incentive to recommend products and investments based on the receipt of this compensation instead of what is the in best interest of our clients thus creating a conflict of interest.
Conversation Starters: How might your conflicts of interest affect me, and how will you address them?
Additional Information: For more information about our conflicts of interests and the ways we are compensated, please see Item 5, Item 10, Item 12, and Item 14 of our Form ADV Part 2A.
How Do Your Financial Professionals Make Money?
Description of Compensation/Payment of IARs: We compensate our investment adviser representatives based on the level of assets that the representative brings in to us. This creates a conflict of interest as it gives your representative an incentive to recommend you invest more in your account with us due to the potential for increased compensation. Our representatives also serve as licensed insurance agents and receive commissions, incentives, bonus, and other economic incentives for selling insurance products. The receipt of such compensation creates a conflict of interest. Some of our representatives also serve as registered representatives of affiliate securities broker-dealers, Madison Avenue Securities, LLC, or AE Financial Services, LLC, or a separate non-affiliated broker-dealer. When acting in this separate capacity, the representative will receive commissions for selling securities which creates a conflict of interest.
Do You or Your Financial Professionals Have Legal or Disciplinary History?
Conversation Starters: As a financial professional, do you have any disciplinary history? For what type of conduct?
Additional Information About AE Wealth Management
Additional information about us and copies of our Form ADV Part 2 disclosure brochures and this relationship summary are available on the Internet at https://wealth.advisorsexcel.com/. You can also find our disclosure brochures and other information about us at https://adviserinfo.sec.gov/firm/summary/282580. If you have any questions or want an up-to-date copy of this relationship summary, we can be reached by phone at (866) 363-9595.
Conversation Starters: Who is my primary contact person? Is he or she a representative of an investment adviser or a broker-dealer? Who can I talk to if I have concerns about how this person is treating me?
Date of Form ADV Part 3: May 2020