Different Types of Investment Accounts
JPMS offers both brokerage and investment advisory services. There are important differences between the two, including the types of services provided, the costs and how they are regulated. We encourage you to speak with your Financial Advisor if you have any questions.
Brokerage accounts and related services primarily involve assisting you with the purchase and sale of securities based on your instructions. These accounts have a transaction–based cost structure and you retain the final investment decision on all transactions in the account.
- As part of a brokerage relationship, JPMS will handle the brokerage and related functions for your account, which may include: holding securities and cash; executing, clearing and settling transactions; collecting and processing dividends; issuing buy and sell confirmations and statements; and looking after the various details associated with the clearing and carrying of accounts. Unless you have specified otherwise, JPMS will act as custodian of the assets in all brokerage accounts. For additional information regarding the services JPMS provides with respect to brokerage accounts, please refer to your J.P. Morgan Securities Customer Agreement or other applicable service–related documents, which may be amended from time to time. You may request additional copies of these agreements or other documents at any time.
- In exchange for our brokerage services, you generally pay a commission or other charges for each transaction and other applicable fees. For example, you generally pay JPMS a commission for each equity transaction, a mark–up/mark–down for bond transactions and a sales charge for mutual fund transactions. A mark–up is the difference between a security’s lowest current offering price and the price charged to the client, while a mark–down is the difference between the highest current bid price for a security and the lower price that a client receives when selling a bond. Therefore, in a brokerage account your total costs will generally increase or decrease as a result of the frequency of transactions in the account and the type of securities you purchase. We may also be paid by third parties who compensate us based on what you buy.
When acting as a broker–dealer:
- We assist you with the purchase and sale of securities based on your instructions. Your approval will be required before any securities transaction takes place. We do not have discretion to act on your behalf in a brokerage account. This means that although we may provide advice or recommendations regarding the purchase or sale of securities, we do not make investment decisions for you, manage your investments or monitor your account.
- We are not acting as a fiduciary under federal law, federal rule or federal regulation. As such, we are permitted to sell securities to you and buy securities from you through our own account as principal and act as agent for you and another client in the same trade. We will disclose this on trade confirmations sent to you.
- When we make recommendations to you we do so in a broker–dealer capacity, not as your investment advisor, unless we have entered into a written investment advisory agreement with you.
Investment Advisory Accounts
When acting as an investment advisor, we offer a variety of programs and services including discretionary and non–discretionary advisory programs. If you participate in a discretionary advisory program, we will have authority to make trades and other investment decisions on your behalf without seeking your prior approval. As part of our investment advisory programs and services, we provide ongoing account management and monitoring.
For these investment advisory programs and services, you generally pay a fee based on the value of your account assets. Additionally, trade execution and other applicable fees may also apply. All fees will be outlined in our agreements with you.
While serving as your investment advisor, we are acting as a fiduciary. As part of our fiduciary duty to you, among other things, we are required to make full and fair disclosure of all material facts relating to our advisory relationship with you, including conflicts between our interests and your interests, and we must obtain your informed consent before engaging in transactions with you for our own account or that of an affiliate or another client (to the extent otherwise permitted under applicable federal law). We act as an investment advisor only when we have entered into a written agreement with you that describes our advisory relationship and obligations to you.
Both Brokerage and Investment Advisory Accounts
In both brokerage and investment advisory accounts that include professionally managed investment products such as mutual funds or exchange–traded funds (ETFs), you will be charged for additional operating expenses that are reflected in the product’s share price. Additional expenses include, for example, investment management fees assessed by the manager of the fund. There may also be other fees and expenses that are not included as part of JPMS’s fees or compensation. There may also be other fees and expenses, in addition to those outlined above, as described in agreements and disclosures provided to you. You can find additional information about brokerage fees and expenses in the section about Brokerage Products.
While we will take care in developing and making recommendations to you as a broker–dealer or investment advisor, securities involve risk and you may lose money. There is no guarantee that you will meet your investment goals or that our recommended investment strategy will perform as anticipated. Please review all the documents you are provided for the details of that product or service, the risks associated with the product and other important information.
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Different Types of Brokerage Accounts
You can always choose between a full–service and a self–directed brokerage account. The main differences between them are how you work with us, who you work with, the types of investment options and services available to you, and costs.
With full–service brokerage accounts, you can work with a Financial Advisor who can provide goals–based advice, guidance and help with specific investment needs. With self–directed brokerage accounts, you can open a You InvestSM Trade account where you will make your own decisions and will primarily engage with us online.
As a result of these differences, the fees that you pay will vary.
Some account types, strategies, products and services may only be offered in one of the service models. For instance, certain mutual fund share classes, investment strategies or account types may only be available through You Invest Trade and others just through your Financial Advisor in a full–service brokerage account. You can open multiple accounts and choose to work with us in different ways depending on your objectives in each account.
Brokerage Account Fees
We charge certain account fees or other amounts in the normal course of providing services or products to you. These charges may include fees for certain administrative services.
Full–Service Brokerage Account
Fees and charges may vary from one account to another based on a variety of factors. All such fees and charges are deducted from your linked bank account or brokerage account and are subject to change periodically.
- For service fees, please see the Appendix section.
- For product–specific fees and other charges, please see the section about Brokerage Products.
You Invest Trade
Please visit, www.jpmorgan.com/youinvest-trade-pricing.
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Different Types of Investment Advisory Accounts
In addition to brokerage accounts, clients have the ability to invest in a number of investment advisory programs, including discretionary and non–discretionary investment advisory programs, where they can receive advice on the selection of investment managers, mutual funds, ETFs and other securities offered through our investment advisory programs. You also have the option to invest online in a J.P. Morgan–managed portfolio through a discretionary You Invest Portfolio advisory account.
Investment Advisory Account Fees
Fees and costs associated with our full-service investment advisory programs are available request or at www.jpmorgan.com/securities/securities/adv.
Fees and costs associated with You Invest Portfolios can be found at www.chase.com/personal/investments/you-invest/pricing.
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Related Brokerage & Investment Advisory Services
The following are some additional products and services we may provide.
- Under certain limited situations specific to Alternative Investments, JPMS provides custody services through JPMCB, as described in the Custody Agreement, sometimes referred to as “Accounts And Services Relating to Assets Held by JPMCB and Affiliated Banks,” which is part of the Combined Terms and Conditions. Pursuant to that agreement, such services generally include recording, on our books, the plan’s interest in property that JPMCB holds directly or indirectly for the account as custodial agent. JPMCB may also make purchases, sales, and deliveries in accordance with instructions given by the plan sponsor
Fees and Costs
JPMS does not charge its clients a Custody fee.
We offer Individual Retirement Accounts to our clients, including:
- Traditional IRAs – a type of tax–advantaged retirement account where your contributions may be tax–deductible, and any investment gains will not be taxed while in the IRA. When you withdraw your money you will have to pay taxes on any amounts withdrawn comprising pre–tax dollars, including investment gain and deductible contributions.
- Roth IRAs – a type of tax–advantaged retirement account where your contributions are made with after–tax dollars (if you are eligible to contribute), but any investment gains will not be taxed while in the account and your withdrawals will be tax–free if they are qualified.
Fees and Costs
- For service fees, please see the Appendix section.
- For product–specific fees and other charges, please see the section regarding Brokerage Products.
529 Plan (Full–Service Only)
A 529 plan is an investment account that offers:
- Tax–deferred growth and tax–free withdrawals when the funds are used to pay for a designated beneficiary’s qualified education expenses. Contributions may be tax–deductible in some states.
- Numerous professionally managed investment options from which to choose, including mutual funds and ETFs. You have full control over your plan’s investments and withdrawals.
Fees and Costs
- 529 plans may charge a program management fee and/or a state administration fee (generally 0%–0.50% in aggregate), in addition to the expense ratios of the underlying mutual funds.
- Many plans charge an annual account maintenance fee (generally $20–$25 annually). Such plans often reduce or eliminate this fee for residents, clients who make automatic contributions or for accounts above a minimum balance, typically $25,000.
- 529 plan investments include A Shares and C Shares and sales charges vary by plan. Please see the section about Brokerage Products for more information on mutual funds share classes and sales charges.
Margin (Full–Service Only)
- Margin involves borrowing from JPMS in order to purchase an investment.
- Securities in your margin account are collateral for the loan to you. If the securities in your account decline in value, so does the value of the collateral supporting your loan, and, as a result, JPMS can take action, such as issue a margin call and/or sell securities or other assets in any of your accounts with us, in order to maintain the required equity in the account.
- Your Financial Advisor is not compensated based on interest paid for your margin loans.
- Before trading stocks in a margin account, you should carefully review the Margin Disclosure Statement. www.finra.org/sites/default/files/ InvestorDocument/p005895.pdf.
Fees and Costs
Interest will be charged as provided below on any credit extended to you by JPMS for the purpose of purchasing, carrying or trading in any security. The annual rate of interest you are charged may fluctuate with changes in the stated base rates. The changes in rates resulting from this fluctuation will be made without prior notice to you.
- $0 to $25,000: JPMS Base Lending Rate + 2.5%
- $25,001 to $50,000: JPMS Base Lending Rate + 2%
- $50,001 to $100,000: JPMS Base Lending Rate + 1.5%
- $100,001 to $500,000: JPMS Base Lending Rate + 1.25%
- $500,001 and above: JPMS Base Lending Rate + 1%
- Listed Option Margin Requirement Minimum account equity for clients writing options: $25,000
- Naked Equity Options Margin Requirement (per contract): Option premium plus 30% of Underlying Market Value (UMV) less Out–of–the–Money (OTM) amount
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