Kovack Financial Network Disclosures
Regulation Best Interest
Brokerage Fee Schedule
Account Protection
Kovack Securities is a member of the Financial Industry Regulatory Authority (FINRA), Securities Investors Protection Corporation (SIPC), Florida Securities Dealers Association (FSDA), and the Securities Industry Association (SIA).
Fidelity & Pershing Accounts
Under SIPC, your securities account is insured up to $500,000 ($100,000 for cash). Fidelity & Pershing have both purchased an additional policy that provides coverage in excess of SIPC protection. Clients receive excess coverage at various levels, depending on the type of asset, up to $150 million. Additional protection is offered through Fidelity at the $35 million limit & Pershing is currently unlimited. Financial Institutional Bond, which covers clients’ securities losses, subject to the terms, conditions and limits of the bond. SIPC coverage is not the same as the insurance on bank accounts provided by the Federal Deposit Insurance Corporation (FDIC). It does not protect investors against a decline in the market value of securities. SIPC generally protects customers against the physical loss of securities if the broker/dealer holding the securities for the customer fails.
Sample Client Statements
Client statements are sent monthly to clients in a consolidated, easy to read format. They detail all securities positions including equities, fixed income securities and mutual funds.
Business Continuity Plan Disclosure Statement
Kovack Financial’s Business Continuity Plan (BCP) was developed to meet the challenges of sudden and significant business disruptions. These challenges will vary, so the firm’s responses will remain flexible as events occur.
Contacting Us: If, after a significant business disruption, you cannot contact us as you usually do by contacting your Registered Representative and/or Investment Advisor Representative, or the home office at (800) 711-4078, please visit our website at www.kovacksecurities.com.
Our Business Continuity Plan: The firm’s plan is designed to permit Kovack Financial to resume operations as quickly as possible, given the scope of the disruption. Our plan addresses: data backup and recovery; all mission critical systems; financial and operational assessments; alternative communications with customers, employees, and regulators; alternate physical location of employees; critical supplier, contractor, bank and counter-party impact; regulatory reporting; and assuring our customers prompt access to their funds and securities if we are unable to continue our business.
Our clearing firms, Fidelity and Pershing LLC, back up important records in a geographically separate area. There are inherent variables in any emergency situation, yet we have been advised by our clearing firms that their objective is to restore their operations, complete existing transactions, and accept new transactions and payments as quickly as possible. Orders and requests for funds and securities could be delayed during this period.
Varying Disruptions: Significant business disruptions can vary in their scope, such as affecting only our firm, a single building housing our firm, the city where we are located, or the whole region. The disruption can vary from minimal to severe. In a disruption to our office or building, operations may be transferred to a local site; resumption of operations should occur quickly. In a disruption affecting our city or region, operations will be transferred to a site outside the affected area; resumption of operations should occur within twenty-four hours. In either situation, we plan to take the necessary steps to continue business operations; we will notify you through our website at www.kovacksecurities.com on how to contact us. If the business disruption is so severe that we cannot remain in business, we assure your prompt access to your funds and securities.
For More Information: If you have questions about our business continuity planning, you can contact us at (800) 711-4078 or info@kovacksecurities.com
Products & Services
At Kovack Securities, our role is to provide the best resources available to help you reach your financial goals. We are continually meeting the demand for leading-edge financial services and sound investment products that are flexible and structured to meet your changing lifestyle and individual needs. Your financial advisor has access to cutting-edge products and services that will help you build and protect your wealth now and into the future. These include:
Brokerage Portfolio Accounts (BPA)
BPA accounts are centralized asset and cash management accounts designed to provide both individual and business clients with greater control over their assets. The BPA has powerful features designed to help save time, make it easy to organize financial data and help build a strong financial portfolio. They offer competitive rates of return on money fund balances and simplified record-keeping, all while maintaining financial flexibility. Master Card Gold Debit Cards and unlimited check-writing are also a feature of these accounts. Additional features include electronic access for direct deposits, withdrawals and systematic investments, and convenient borrowing of up to 50 percent of the value of the marginable securities in your account.
Online Account Access
Access your brokerage account information anytime, anywhere. Your account statement was created with you in mind. As a valued client, you deserve comprehensive, timely account information and that’s just what you’ll get with your account statement. Our clearing firms, National Financial Services and Pershing, provide secure, on-line, real-time access to your account using your existing web browser through either Microsoft Internet Explorer. Some of the features you will find with your account statements include:
- Money Balances
- Asset Holdings
- Cash & Stock Dividends
- Last Statement
- Recent Account Activities
Of course, you’ll receive statements every quarter, as long as your account contains a cash or security balance or monthly when you have transactions during that month.
Clearing Services
Kovack Securities uses the following clearing firms on a fully-disclosed basis to act as custodian of your securities and cash accounts in addition to executing and clearing trades through the exchange floors as well as ECN’s. In essence, the clearing firms act as our intermediary when providing financial services for all types of private and institutional clients.
BNY Pershing is our clearing and custody provider. BNY Pershing has been a leading global provider of financial business solutions for 85 years and serves many of the world’s most respected financial organizations. BNY Pershing is the trusted choice of approximately 1,100 firms, representing more than 8 million investors and is committed to the protection, servicing and reporting of assets for investors like you. BNY Pershing is a FINRA member broker-dealer registered with the U.S. Securities and Exchange Commission (SEC). BNY Pershing is registered in all 50 states as well as the District Of Columbia and Commonwealth of Puerto Rico, and certain foreign jurisdictions. For more information about BNY Pershing, visit bny.com
Fidelity Investments provides clearing and custody services to Kovak Securities through National Financial Services LLC. Working with Fidelity Investments gives Kovack Securities access to a wide range of products and services that can help us serve the needs of our clients. Through our relationship with Fidelity Investments, you will receive a simplified, consolidated statement each month reflecting all your investment positions and transactions in your Fidelity brokerage account.
For more information about Fidelity Investments, visit Fidelity.com
Fidelity Investments® (Fidelity) is an independent company, unaffiliated with Kovack Securities, Inc. (KSI). Fidelity is a service provider to KSI. There is no form of legal partnership, agency affiliation, or similar relationship between KSI and Fidelity, nor is such a relationship created or implied by the information herein. Fidelity is a registered service mark of FMR LLC.Fidelity provides clearing, custody, or other brokerage services through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC. 1180323.1.0
Revenue Sharing Agreements
Our Firm offers a wide variety of mutual funds, variable annuities, real estate investment trusts and other securities products to clients. In certain instances, product companies participate in activities that are designed to help facilitate the distribution of their products, such as marketing activities and educational programs and by offsetting expenses that result from the cost of doing business.
In return for assistance in facilitating the activities described above, we may receive additional compensation from product sponsors. None of these additional payments are paid to any Registered Representative who may sell these products.
Currently, the list below participate with us for said revenues:
1290 Funds
AcquireUp/White Glove
Advisors Capital Mgmt
Annexus
AssetMark
Athene Annuities
AuguStar Retirement
Bluerock Capital Markets
BNY Pershing
Brighthouse Financial
Buckingham/Focus
Brokers International
Capital Group
CIM Group
Creative One
Crump Life Insurance Services
Cumberland Advisors
Eagle Life
ECA Marketing
Equitable
F&G Annuities & Life
Fidelity Investments
First Trust Portfolios LP
Genter Capital Mgmt
Global Atlantic
Howard Capital Mgmt
Jackson National
Legend Financial Marketing Services
Life Insurance Settlements
MassMutual Ascend
Midland National
Nationwide
NexAnnuity
Orion Portfolio Solutions
One Resource Group
Potomac Funds
Preferred Capital Securities
Producer’s Choice
Sammons Retirement
Simplicity Financial Distributors
Symetra
The Pacific Financial Group
The Pinnacle Group
TruChoice Financial Group
Underwriters Marketing Service
Universal Life Insurance Company of Puerto Rico
Vestwell
Voya Financial
Voyant
Wealthcare Capital Mgmt
Wholehan Marketing
Industry Affiliations
Kovack Securities is a member of the following:
- Financial Industry Regulatory Authority (FINRA)
- Securities Investors Protection Corporation (SIPC)
- Municipal Securities Rule Making Board (MSRB)
- National Securities Clearing Corporation (NSCC)
- National Association of Securities Dealers Automated Quotations (NASDAQ)
- Financial Services Institute (FSI)
- Florida Securities Dealers Association (FSDA)
Order Routing Information
Kovack Securities placed client orders on a fully disclosed basis through our clearing agreements with National Financial Services (NFS) and Pershing, LLC. Our order flow was not equally spread among these clearing firms whereas the majority of client orders were placed through NFS.
Pursuant to SEC Rule 11Ac1-6, to access order flow information for NFS, please click on the NFS link below. To access order flow information for Pershing, please click on the Pershing link below, type in “Kovack Securities Inc” in the “Broker/Dealer’s Full Name” field and click the “Display” button.
- Fidelity Order Routing Information
- Pershing Order Routing Information (Note: Please enter Kovack Securities Inc when requested. Do not use a comma).
Privacy Notice
Keeping customer information secure is a top priority for all of us at Kovack Securities, Inc. We are providing you this Privacy Policy to help you understand how we handle the personal information about you that we collect and may disclose.
Kovack Securities provides retail securities brokerage services to clients who work with our Registered Representatives. As such, we receive and maintain information about you related to your account(s).
Where we get information. The information we collect about you comes primarily from your Registered Representative who handles your account(s).
CIP Notice
Important Information About Procedures for Opening a New Account
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.
What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.
