Forms Updates and New Client Resources from Brokerage Operations

New Client Resource!

Depositing Money into a Brokerage Account

Utilize this new digital flyer for clients on Depositing Money into a Brokerage Account.

Equity Services Inc. has prepared a new digital and download-friendly piece with instructions on the process for depositing money into a brokerage account. Click here to access the file, Catalog # 106629(0423).

Updates from Brokerage Operations

NFS Forms Update – CAT/CAIS Regulatory Requirements

ESI is required to report activity in Eligible Securities to the FINRA Consolidated Audit Trail (CAT) system. CAT tracks orders throughout their life cycle and identifies the broker-dealers handling them, thus allowing regulators to efficiently track activity in these Eligible Securities throughout the U.S. markets. The CAT Customer & Account Information System (CAIS) is a separate system for the submission of customer and account data, which is combined with the order reporting information.

Over the next few weeks, many NFS Brokerage Account forms will be updated in order to support CAT/CAIS regulatory requirements. All Applications, and other authorization forms, have been revised with the following:

  • Updated Taxpayer ID Number field to capture ITIN and EIN.
  • Added spaces to indicate if the account holder is an Accredited Investor ( Accredited Investor Definition), employed/associated with a Registered Investment Adviser or a Broker-Dealer
  • Updated Entity Account Information to include a space to indicate whether the entity is an Accredited Investor, Registered Investment Adviser, Registered Investment Company, or a Broker-Dealer.

Forms will be updated to provide checkboxes allowing customers to provide this info. Boxes only need to be checked if these definitions apply to the customer. Form updates will include:

  • Brokerage Account Application
  • 529 Plan Account Application
  • Premiere Select Health Savings Account Application
  • Premiere Select IRA Application
  • Premiere Select SIMPLE IRA Application
  • Corporate and Unincorporated Resolution
  • Limited Liability Company Agreement
  • Partnership Account Agreement
  • Trustee Certification of Investment Power
  • Durable Power of Attorney Affidavit and Indemnification
  • Trading Authorization Forms

If you have questions on these form updates, please contact the Brokerage Service Desk at 1-800-344-7437.


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Reminder: Commission and Advisory Fee Payments

As Q1 closes, here are a few reminders regarding upcoming advisory fee payments from Illuminations and our Direct Money Managers:

  • Quarterly Advisory fees are typically billed to the client’s account the first week after each quarter ends/begins.
  • The ESI Compensation team starts receiving these fees from the vendors about two weeks into the new quarter.
  • Depending on the day of the week advisory fees are received and processed in good order, they are paid out the following week.
  • ESI’s commission pay-cycles close each Wednesday and pay the following Tuesday (bank holidays may affect cycle close/pay dates).
  • Be sure to check your ACE Commissions portal for incoming advisory fees on your MyView Daily Sales Blotter report.
  • If you need assistance, you can email the compensation team at or call (800)-344-7437, option 2, option 7.

– Chris, Courtney, Katie, and Shane


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SEC Marketing Rule FAQ

SEC Marketing Rule Update 

As announced in Field Notice 2022-31, compliance with the Securities Exchange Commission’s (“SEC”) new Marketing Rule (“Rule”) was effective on November 4, 2022. Please refer to Field Notices 2022-21 and 2022-31 for background and changes relating to the Rule. The purpose of this Notice is to address some questions generated by the changes. 


Q1. What constitutes an advertisement? 

An advertisement is any direct or indirect communication to more than one person, or to even a single person if the communication includes hypothetical performance, that offers the investment adviser’s investment advisory services with regard to securities to prospective clients or offers new investment advisory services with regard to securities to current clients. The definition also includes any endorsement or testimonial involving direct or indirect compensation. 

Q2. What kinds of communications are not considered advertisements? 

Under the Marketing Rule, the following types of communication are excluded from the definition of an advertisement: 

  • Extemporaneous, live, oral communications, 
  • Information contained in a statutory or regulatory notices (ex: EFA’s Form ADV Part 2A brochure). 

So, communications to one customer are generally excluded from the definition of an advertisement, with the exception of communications that include hypothetical performance. Communications that include hypothetical performance are subject to the requirements of the Rule, even if they’re only provided to one customer. 

Q3. What constitutes hypothetical performance? 

Hypothetical performance is defined as “performance results that were not actually achieved by any portfolio of the investment adviser.”  This includes: 

  • Performance derived from model portfolios, 
  • Performance that is back-tested by the application of a strategy to data from prior time periods when the strategy was not actually used during those time periods, or  
  • Targeted or projected performance returns with respect to any portfolio or to the investment services offered in the advertisement.   

Among other scenarios, the definition applies to any software or analysis tool that aggregates historical data to create or project performance for two or more securities to reflect performance of a hypothetical portfolio. For example: 

An advisor uses an analysis tool to show their client how their portfolio would have performed if they’d held Google, General Motors, and Pfizer over the past three years, when they didn’t, in fact, hold any of those securities.  This is hypothetical performance, under the rule. 

Hypothetical performance does not include:

  • An interactive analysis tool where a client or prospective client uses the tool to produce analyses that present the likelihood of various investment outcomes…provided that the adviser: 
    • Provides a description of the criteria and methodology used, including the tool’s limitations and key assumptions, 
    • Explains that the results may vary with each use and over time, 
    • If applicable, describes the universe of investments considered in the analysis, and explains how the tool determines which investments to select, the reason for selectivity, and that other investments not considered may have similar or superior characteristics, and 
    • Discloses that the tool generates outcomes that are hypothetical in nature.  

An example of this exclusion includes an analysis tool which requires that the client or prospective client provide the information used to generate the tool’s output.  The tool must still provide the disclosures required in (a) – (d) above. 

Q4. What planning tools can I use with clients? 

MoneyGuide Pro and eMoney have amended their tools to comply with the requirements of the Rule and may continue to be used with investors. 

Those features of Morningstar Advisor Workstation which reflect solely historical performance may be used with clients.  For example, advisors may use Morningstar’s snapshot report for a specific security, as that report would not constitute hypothetical performance under the Rule.  However, creating a report which blends historical returns of multiple securities that don’t actually constitute an existing portfolio currently held by the investor or offered by the Firm to create a “what if” scenario, would fall under the definition of hypothetical performance above, and is not permitted. 

Q5. What about asking individual clients for referrals? 

The Marketing Rule creates two prongs to the definition of “advertisement”. The first prong specifically excludes most one-on-one communications and extemporaneous, live, oral communications. The second prong covers compensated testimonials and endorsements, which could include oral communications and one-on-one communications. 

As such, to the extent that the client’s referral is an oral, one-on-one communication with the other individual, and you don’t provide them with cash or non-cash compensation for the referral, then this activity falls outside the definition of “advertisement” and is not subject to the requirements of the Rule. 

Q6. My client referred me to their neighbor.  Can I give them a gift card to say “thank you”? 

If you offer them the gift card to encourage them to make referrals, then the answer is “No,” unless you enter into a Promoter agreement to ensure compliance with the advertising rule. As mentioned in Q1, providing compensation – directly or indirectly – for a referral constitutes advertising, and is subject to the Rule. 

However, this doesn’t preclude you from providing gifts or entertainment to your clients, generally, in accordance with normal policies and procedures. 

Q7. I have an arrangement with an individual who sends me fixed life business, and I refer individuals to them for long-term care coverage. Do I need a Promoter Agreement? 

If you’re an IAR, yes. Because it is very likely that someone recommending you for life insurance sales will also recommend you for securities business, any business-related referral arrangement will require the completion of the Promoter Agreement. 

Questions regarding the Marketing Rule or this notice may be directed to Tom Longfellow at


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Shout Out Report

Congratulations to our February Leaders!

From Annuity sales to Advisory sales to Recruiting, ESI’s Leaders for the month of February deserve a Shout Out! Click here for our individual and agency leaders for the month of February – and a welcome to our new Reps:

Aeric Alexander – Baltimore

Craig Boozer – Southern CA

Rodney Cooper – North Florida

Steven Flotteron – Long Island

Marc Horowitz – Philadelphia

John Klobucar – Chicago

Tyler Ostrovsky – Southern CA

Corey Palazzolo – New Jersey

John Pontieri – New Jersey

Joseph Rehder Swallow – Chicago

Toben Torres – Southern CA

Shefan Tunaru – Philadelphia


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Need Some Inspiration?

If you didn’t for qualify in 2022 for this year’s ESI Elite Symposium conference, make qualifying in 2023 one of your goals.

Need some inspiration?

The ESI Elite Symposium is a chance to:

  • Network with other top producers and hear from world class speakers
  • Hear best practices for prospecting and practice management
  • Pick up new sales and marketing ideas

And though we haven’t announced the location in 2024 yet, with locations like the Biltmore Estate in Ashville, NC, the Viking Resort in Newport, RI, and the Ritz Carlton Bacara in Santa Barbara, the only question is, “Are you on track to qualify?”.

How to Qualify in 2023
Rep Qualifications:              $425,000* in GDC
Agency Qualifications:        $4,250,000* in GDC

Qualification Period: 1/1/23-12/31/23

Team Qualifications
Note that these qualifications pertain to Teams recognized by ESI (splitting at least 25% of their business)

If any of the above qualifications are not met, an additional invite will not be given. For examples, please see the NL Agent Portal.

*Credits may be adjusted if needed to comply with the Massachusetts Fiduciary Rule.
All Fixed Indexed Annuity Sales are excluded from this amount. 


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Fidelity Banking Sector Recap and Additional Resource

Webinar Recap
If you were unable to attend last week’s Fidelity Banking Sector Update and Market Impact webinar, click here for a recap that includes key takeaways.

Bank Deposit Sweep Program (BDSP)
The Bank Deposit Sweep Program (BDSP) from Fidelity Institutional is a strategic solution that can help you meet eligible investors’ liquidity and investment needs while providing up to $2.5 million in combined FDIC insurance coverage. Click here for details.


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Riskalyze Resources and Updates

Two Riskalyze plans are approved and available at the following updated pricing:

  • Riskalyze Select $265.50/month
  • Riskalyze Elite $335.50/month

ESI’s newest technology partner, Riskalyze, has created a new resource just for ESI Reps that includes case studies, white papers, training, support contacts and an overview of all of the technology integrations Riskalyze supports. Click here to visit the resource page or view the recorded introduction webinar. To learn more about all of ESI’s technology offering, log in to the agent portal and go to Tools – ESI Business Tools – ESI Technology Platform.


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