Brokerage and Investment Advisory Relationships


JKR & Company is registered with the U.S. Securities and Exchange Commission as a broker-dealer and the State of California as an investment adviser. There are several differences between brokerage and advisory services, and you need to understand that our brokerage and investment advisory services are separate and distinct. Depending on your needs and your investment objectives, you may have brokerage accounts, advisory accounts, or both. We want you to be informed of the differences between these types of services so you can choose the services and accounts that are right for you.

This disclosure highlights important distinctions between brokerage and investment advisory accounts, including applicable laws and our obligations and responsibilities in servicing such accounts. These obligations and responsibilities are more fully described in our applicable agreements with you. You should review this disclosure thoroughly and discuss it with your financial representative.


As a broker-dealer, we facilitate the execution of securities transactions on your behalf. In addition to executing your orders, JKR provides various services through our financial representatives including investment education and sometimes recommendations whether to buy, hold, or sell securities. There are no additional charges for these services since they are considered incidental to the brokerage services we provide.

We are held to the legal standards under applicable federal and state securities laws, and the rules of our self-regulatory organization, FINRA (Financial Industry Regulatory Authority). Among other things, these regulations require us to treat you in a manner characterized by principles of fair dealing and high standards of honesty and integrity. We must also act in retail customers’ best interest and not place our interests ahead of our retail customers’ interests when making a recommendation. Acting in your best interest means we must (1) disclose to you the scope and terms of our relationship with you, (2) exercise reasonable diligence, care, and skill in making the recommendation, and (3) identify, eliminate or mitigate, and disclose those conflicts of interest that might incline us to consciously or unconsciously make a recommendation that is not disinterested.

As a broker-dealer, your financial representative does not have the discretion to buy or sell securities for you without your approval. This means that you decide to buy, sell, or hold securities before trades are placed. If your financial representative recommends that you buy, sell, or hold a security, they must have a reasonable basis to believe their recommendation is suitable for you and act in your best interest if you are a retail customer.

Charges for Brokerage Services

The costs for brokerage services are typically based on a transaction charge, often called a commission, mark-up/mark-down, or sales load for each trade you make in your account. Other costs and charges will also apply to your account and these costs and charges are outlined in your JKR Account Application and Agreement or as you are otherwise notified by the account custodian or clearing firm.


As an investment adviser, we offer a variety of investment advisory services and programs, including investment education and/or advice, discretionary and nondiscretionary investment advisory services, retirement plan consulting and management, and financial planning and consulting services.

When we act in our capacity as an investment adviser, we will do so according to a written agreement with you that sets forth the investment advisory relationship and our obligations to you. At the outset of our investment advisory relationship with you, you will also receive disclosure documents that describe our investment advisory services and include important information about our fees, personnel, other business activities, and conflicts between our interests and your interests, among other things.

When we act as an investment adviser to you, we are considered to have a fiduciary relationship with you under the Investment Advisers Act of 1940 and applicable state laws. This means that we have a duty of utmost good faith, and full and fair disclosure of all material facts as well as an affirmative obligation to employ reasonable care to avoid misleading clients. Applicable rules and regulations require that:

  • We act in what we believe to be your best interests based on your stated financial situation and investment objectives.
  • We have a duty to provide advice and monitor your investments throughout our relationship with you.
  • We disclose or avoid material conflicts of interest.
  • We treat you and our other investment advisory clients fairly and equitably, without unfairly favoring one client to the disadvantage of another.
  • Any investment decisions or recommendations that we make to you must be suitable and appropriate for you, consistent with your stated investment objectives and goals, and consistent with any restrictions that you have communicated to us.

Charges for Investment Advisory Services

Your fees for investment advisory services are described in the client agreement. Typically, advisory fees will be based on a percentage of the assets held in your investment advisory account. This fee is expressed as an annual percentage (for example, 1%) of your account value and is charged quarterly calculated in advance. The fee does not include brokerage transaction charges or custodian charges. Financial planning fees are either a fixed fee or an hourly charge for financial consulting. We explain the fees for our advisory services in greater detail our advisory agreements and our Form ADV disclosure document.


There are times when we may act as a broker-dealer and an investment adviser, concurrently. For instance, you may maintain a brokerage account and an investment advisory account with JKR, at the same time. The rules applicable to each account type apply for that type of account. For example, we will not make investment decisions for you or manage your brokerage account(s); however, we will manage your investment advisory account(s), as agreed upon in the applicable investment advisory agreement.

Deciding Between and Advisory or Brokerage Relationship

Below are some questions to ask yourself when deciding on the type of account to open with your JKR representative.

  • Do you want a representative to manage your investment portfolio? If so, an advisory account may be appropriate.
  • Do you prefer to make investment decisions on your own and are just looking for a representative to execute your orders? If so, a brokerage account may be appropriate.
  • Do you want your representative to act as a fiduciary with a duty to provide you with ongoing investment services? If so, an advisory account may be the right choice.
  • Do you prefer only occasional advice and recommendations on particular investments? If so, a brokerage account may be the right choice.
  • What do you expect will be the amount and size of the holdings and transactions in your portfolio? If you plan to hold several securities and rebalance your account frequently, an advisory account may be the right decision. However, if you plan to only hold a few securities and/or follow a buy-and-hold strategy for a long time without ongoing investment advice from a representative, a brokerage account may be the right decision.


We hope that the information above will help you in determining what type of account and what level of service is appropriate for you. Additional questions about the nature of your accounts or the services provided should be directed to your JKR representative.

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