The Lincoln Financial Advisors Corporation (LFA) is an investment advisor firm that's also a broker-dealer. Sometimes marketed as SageMark Consulting, the firm offers a variety of financial services and products. Headquartered in Fort Wayne, Indiana, the fee-based company has a network of more than 1,000 investment advisors who currently oversee more than $22 billion in assets.
Lincoln Financial Advisors Corporation Background
Lincoln Financial Advisors kicked off operations in 1968 before becoming a registered investment advisor (RIA) firm in 1992. Today, it’s wholly owned by The Lincoln National Life Insurance Company. The insurance company, in turn, is owned by Lincoln National Corporation, which is a Fortune 250 company and trades on the New York Stock Exchange under the ticker symbol LNC.
The company refers to its advisors as investment advisor representatives (IARs) and, as noted earlier, sometimes uses the name Sagemark Consulting.
Lincoln Financial Advisors Corporation Client Types and Minimum Account Sizes
LFA works with individuals, high-net-worth individuals, pension and profit-sharing plans, charitable organizations, corporations and other businesses, and state or municipal government entities.
Minimum account balances vary depending on the type of service you choose. They typically range from $250,000 to $1 million.
Services Offered by Lincoln Financial Advisors Corporation
LFA offers financial planning and various types of investment advisory programs. With a brokerage account, for example, an advisor, as your broker, can provide investment recommendations. You pay a transaction-based fee such as a sales load when purchasing shares of a mutual fund. This type of service may suit you if you prefer a hands-on-approach to investing with advice when you want it.
On the other hand, you can opt for a separately managed account (SMA). In this case, the advisor tailors your portfolio to your individual needs and risk tolerance. The advisor would take control of the account and monitor it continuously while making adjustments when needed. This program typically involves an asset-based fee for ongoing investment management services - along with other expenses such as transaction and custodial costs. Alternately, you could enroll in a wrap-fee program, where there's one all-inclusive fee that covers the advisory fee, brokerage fees and other expenses.
In addition, LFA offers access to model portfolios developed and managed by third-party investment advisors. Each model portfolio is designed to reflect different risk tolerance levels.
Finally, LFA advisors may lead clients to the SEI Investment Management Corporation. This firm provides investors with actively managed investment portfolios, no-load mutual funds and managed accounts through the GoalLink program. Account minimums for this program range from $25,000 to $250,000.
Lincoln Financial Advisors Corporation Investment Philosophy
LFA and their affiliates work together to develop investment strategies appropriate to the risk tolerance and financial goals of each client. Your portfolio may invest in mutual funds, exchange-traded funds (ETFs), individual securities like stocks and even alternative investments.
Advisors evaluate securities based on publicly available market research. They may also utitlize fundamental, technical and charting analyses.
Fees Under Lincoln Financial Advisors Corporation
Management fees vary widely, depending on the program you’re enrolled in. But they generally are a percentage of your assets under management. Because some programs involve other entities including LFA affiliates, not all advisory fees would go to Lincoln Financial Advisors in some cases.
For instance, here's the publically available maximum fee schedule for the GoalLink and Integrated Managed Accounts Program below.
|Portfolio Value||Maximum Annual LFA Advisory Fee|
|Up to $500,000||2.00%|
|Next $1 million||1.50%|
|More than $2 million||1.25%|
And unless your enrolled in a wrap-fee program, your advisory fee generally won't include other expenses such as transaction and custodial costs. Keep in mind that these fees are subject to change at any time. You should carefully review fees in agreement documents you sign with the firm and any third-party advisors.
What to Watch Out For
Lincoln Financial does not provide tax, legal or accounting advice. If you need that kind of help, use SmartAsset's financial advisor matching tool, which will match you with up to three advisors, based on your needs.
Also, as mentioned earlier, Lincoln Financial Advisors is a registered broker-dealer as well as an investment advisor. These dual roles can present a conflict of interest, as the firm is affiliated with various financial services companies and advisors may be incentivised to push affiliated products when providing advice.
Additionally, different standards of behavior apply to the different roles. For example, as Lincoln Financial Advisors notes in its brochure, “When LFA acts as a solicitor by referring clients to other investment advisers, LFA does not provide investment advice to the client and does not act in a fiduciary capacity with respect to the referred client’s account.” Similarly, the fiduciary standard does not apply when advisors are acting as brokers. As brokers, they are required to make suitable recommendations rather than ones in clients' best interests.
In its brochure, Lincoln Financial Advisors listed the following matter as material to a potential client’s evaluation of the firm’s business:
The Financial Industry Regulatory Authority (FINRA) claimed that between 2007 and 2009, Lincoln Financial Advisors failed to protect customer information adequately in the firm’s client portfolio management system and allowed certain employees to access its web-based customer account system by using shared log-on credentials without establishing proper procedures and without monitoring who had access to the common log-on credentials. As a result, the firm was fined $15,000 for the violation. This fine was paid in full February 23, 2011.
The firm’s Form ADV also notes that Lincoln Financial Advisors or an affiliate was charged with a misdemeanor within the past 10 years. Additionally, the firm or an affiliate may have been found to have made a false statement or omission, or been dishonest, unfair or unethical.
For complete details, access Lincoln Financial Advisors's Form ADV on the Investment Adviser Public Disclosure database of the Securities and Exchange Commission.
Tips for Finding the Right Financial Advisor
- If you think you haven't found the right advisor yet, try our interactive financial advisor matching tool. It connects you with up to three advisors in your area based on your preferences and needs.
- Ask prospective advisors about their formal training. Believe or not, but you don’t actually need any to be a financial advisor. So those who have gone to the trouble of earning professional credentials will have that much more preparation - and probably a speciality.
All information was accurate as of the writing of this article.