Affiliation??

[Jakyasar]

Good morning all

Looking into designing pension plan for a financial planner. Owns 100% of X, Inc. and has employees.

Checked the website and see that other names were listed other than the employees.

After questioning the additional names, the following response was provided:

I own 100% of X, Inc. but affiliated with Y, Inc. (also a financial form) and have access to Y, Inc.'s people. No common ownership or shared employees.

What am not asking here to determine any issues?

Thank you

PS PBGC coverage is another issue - any thoughts?

[Bill Presson]

I think it depends on what "affiliated with" means. Is it a broker dealer like LPL? Is it just a friend and they provide help from time to time?

[Jakyasar]

Thank you for your response.

As this is an area where I do not know much about, could you elaborate LPL deal?

[Bill Presson]

28 minutes ago, Jakyasar said:

Thank you for your response.

As this is an area where I do not know much about, could you elaborate LPL deal?

An advisor (or broker) has to have their clients assets held by someone. Some advisors use Schwab. Others may use a number of other B/D groups. LPL is one of the largest.  An entity that actually executes the trades that an advisor or broker would request.

[Jakyasar]

Bill, much appreciated. Thank you and be safe.

[Jakyasar]

Actually have one follow up question.

If they are like LPL i.e. their assets are invested with LPL or Schwab, what are the consequences?

Again, thank you for your comments/expertise.

[Luke Bailey]

Jakyasar, how much time do "Y's people" spend working for X, what is the nature of that work, and how are they (or Y) compensated for what they do for X? As always, "Follow the money."

[Jakyasar]

Thank you for input, correct on the follow the money.

[Bird]

If Y is a broker-dealer, then I don't think "access to Y's people" has much significance; it is normal for the B-D to have support staff assisting their brokers.  If Y is another broker or similarly situated individual or entity, then the two phrases "...and have access to Y, Inc.'s people" and "No...shared employees" are questionable (potentially inconsistent).

Edited to clarify

[MoJo]

My initial thoughts - concepts that came to mind:  "leased employees" and "affiliated service groups."

Just sayin....

Facts matter.

[Jakyasar]

Agree that the facts matter. My concern is that what right questions do I need to ask. All of you provided some guidance and will check with the prospect.

Thank you all.