Effective January 1st, 2025, ESI Financial Advisors (“EFA”) will change their notification process for accounts identified as being in violation of one or more Advisor as Portfolio Manager investment policies.
ENVESTNET VARIANCE MONITORING
Currently, Investment Adviser Representatives (“IAR”) receive monthly email notifications from Envestnet identifying the number of accounts they may have in violation (or “variance”) of the Firm’s investment policies, and the Home Office provides multiple notices informing the IAR, client and Branch Office Supervisor (“Supervisor”) of existing violations. IARs also have Investment Policy Exception Reports available in Envestnet to assist in the monitoring of Flagship Select, ESI Directions, and ESI Compass accounts. Accounts that are in variance of the Firm’s investment policies are reflected on the Envestnet Platform. Supervisors also have access to the Investment Policy Exception Reports via Envestnet.
WHAT’S CHANGED?
Effective January 1, 2025, IARs will have 90 days from the date of the variance in which to take corrective action and address the identified policy violation. After this period, the Home Office will send only one notice to the IAR and client informing them that the account will be converted to a non- managed brokerage account, effective 30 calendar days from the date of the notice. If the variance is not addressed in the interim, the account will be converted and continue as a standard brokerage account.
If the variance is corrected prior to the effective date of the conversion, EFA may allow the account to remain in the managed program.
Should the IAR and client wish to re-establish a managed account after the Firm converts the original account to the non-managed platform, new paperwork will be required to open a new advisory account.
QUESTIONS
Questions regarding this notice may be directed to ESI Surveillance at ESISurveillance@nationallife.com.
TC7292228(1124)1