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Outsourced Testing Services

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*We will set up and train you on executing the test and documenting the results. We will not perform the test on the firm's behalf.

**We will perform the testing on the firm's behalf, escalating identified issues and providing quarterly reporting of the results. No training will be done.
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*Daily Trade Blotter 

Monitoring

All daily trading is monitored for potential issues that are not otherwise found during the other monitoring and testing processes.

 

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Notice Filing

 

This testing is completed to ensure that the firm is properly notice filed in states where the number of clients exceeds the di minimis exemption.

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*Trade Allocation

Monitoring

This daily monitoring is completed to determine if model trading/allocation is being done in a fair and equitable manner and that no client is disadvantaged in the pricing of their trades. This may be accomplished through block/average price trading, but may be done on a rotation basis when block/average price trading is not an option.  

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Reverse Churning

This review is conducted to determine if the firm has any clients that are being charged management fees when no apparent investment management services are being performed. 

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*New Deposit

Monitoring

All deposits are reviewed/tested to determine if client deposits are being invested in a timely manner. The dollar amount of the deposits that are included in the universe can be established by the registrant. Typically, deposits in excess of $100,000 per client would be included in the universe from which the sample will be drawn.

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Fee Billing

 

A sample of the fee schedules are tested on aperiodic basis to determine if the fee rate indicated in the billing system is the same rate that is noted in the client fee scheduled that the calculations are accurate. 

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Trade Allocation

Testing

A sample of the model trading is tested determine if model trading/allocation is being done in a fair and equitable manner and that no client is disadvantaged in the pricing of their trades. This may be accomplished through block/average price trading, but may be done on a rotation basis when block/average price trading is not an option.

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Mass Rebalance and Model

Testing

This review is done to confirm that the changes to the model construct follow investment committee direction and were implemented correctly from trading through system implementation. This can be done at the time each model construct changes or can be tested on a quarterly basis if the firm has adequate controls in place. 

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New Deposit

Testing

A sample of deposits are tested on a periodic basis to determine if client deposits are being invested timely. The dollar amount of the deposits that are included in the universe can be established by the registrant. Typically, deposits in excess of $100,000 per client would be included in the universe from which the sample will be drawn. 

 

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**Best Execution Analysis

This review is conducted as a part of the firm's fiduciary obligation to seek best execution when recommending broker dealers and executing trades for its clients. 

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Terminated Accounts

 

This review is conducted to confirm that unearned fees during the period were refunded, and/or final billing invoices were prorated for the final period.

Limitations and Restrictions - Tests can only be performed if the registrant has access to a reporting mechanism that allows for the extraction of the information necessary for these tests. For example, firms using a data aggregator and/or reporting solutions will typically have access to such a reporting mechanism. For firms who utilize Orion Advisor Solutions, that feature is their Compliance Supervise tool. Currently, best execution reviews can only be comuletedfor firms who utilize TD Ameritrade's custodial platform and are only available on an outsourced basis.