Item 1. Introduction
A. Aufhauser Securities Inc. (“Aufhauser”) is a broker dealer, registered with the SEC, with FINRA, and member of the Securities Investor Protection Corporation, SIPC. We are not investment advisors. Brokerage and investment advisory services and fees differ and it is important for the retail investor to understand the differences. As a broker dealer, we make money from commissions on securities transactions. We do not assess a fee on the assets of Aufhauser clients held at Pershing LLC.
B. The SEC encourages us to say that “free and simple tools” are available to research firms and financial professionals at www.Investor.gov/CRS which also provides educational materials about broker-dealers, investment advisers, and investing.
A. What investment services and advice can Aufhauser provide me?”
B. Description of Services: We offer brokerage services to retail and institutional investors. Through our relationship with our clearing broker, we provide our customers access to securities markets and different market venues in the USA and internationally; primarily equities, options, corporate bonds, and CD’s. We also make available all the retirement products ( IRA’s, 401k’s. etc.) offered by Pershing. We do not deal in municipal bonds, but we do deal in municipal bond funds, and other mutual funds and ETFs. We do not offer recommendations to investors, but we are happy to provide relevant information and intelligent discussion of ideas that our clients bring to us. Through Pershing, we offer cash management accounts which provide clients with check writing, bill paying, credit cards, and rebates on their credit card purchases.
The SEC asks us to remind you:
(i) Monitoring: We do not monitor retail investors’ investments, including the frequency and any material limitations. We do however, have procedures in place to supervise the suitability of customer transactions based on their financial condition and stage of life.
(ii) Investment Authority: We do not accept discretionary trading authority from our clients. All accounts are managed by the clients themselves or by those to whom clients give power of attorney, none of whom are employees of Aufhauser, except in the case of immediate family members of Aufhauser employees who are permitted to grant limited power of attorney to trade, not to disburse funds. The retail investor makes the ultimate decision regarding the purchase or sale of investments.
(iii) Limited Investment Offerings: We do not offer proprietary products nor do we limit clients choices, Clients may chose any of the products that the relationship with Pershing LLC makes available to Aufhauser and to them (except for municipal bonds).
(iv) Account Minimums and Other Requirements: We do have a recommended minimum account requirement of $25,000 to open any new account. Exceptions can be made, however, if the clients insist and if the principal of Aufhauser agrees.
C. Additional Information: Aufhauser does not make recommendations. We don’t “present” to a target audience a list of products. We don’t urge the client to make any investment that is not the result of the client’s own decision-making process. We don’t tailor communications to a particular class of investor. We don’t advertise. We don’t recommend certain types of accounts (margin, retirement or retail). We do not promote any security as part of an investment strategy. If anything, we might discourage a particular strategy, because we might think such a strategy is not in the Best Interest of the client. Nonetheless, we are happy to inform our clients of all of the information that would be called for if Aufhauser were subject to regulation BI. To the extent that Aufhauser prepares more detailed information about Aufhauser services, we include specific references to such information and to any possible conflicts of interest.
D. Conversation Starters: Clients are encouraged to ask questions like the following:
(i) “Given my financial situation, should I choose a brokerage service? Why or why not?”
(ii) “How will you choose investments to recommend to me?”
(iii) “What is your relevant experience, including your licenses, education and other qualifications? What do these qualifications mean?”
A. “What fees will I pay?”
(i) Description of Principal Fees and Costs:
a. Our standard commission for telephoned orders is $35 per order. For orders placed over the internet platform provide to Aufhauser clients by Pershing, www.netxinvestor.com, the commission is $19 per order. In addition, clients will pay fees that are assessed by our clearing broker Pershing and which we pass on to the client, sometimes with a small markup. Such fees include inactivity fees, annual maintenance fees for retirement account, reorganization fees, bond redemption fees, cash management account fees, and the like. Customers who deal in larger blocks of shares, of 1000 shares or above, have specially negotiated commissions which vary with the size of the trade. In the case of all commissions, Aufhauser has an interest in the customer trading more frequently and in higher volume, since such trades will likely produce more commissions and more revenue to Aufhauser. This may not be in the customer’s interest, if the customer does not want to place frequent or large orders. On the other hand, “over-trading” may not be in Aufhauser’s interest either, since Aufhauser has regulatory responsibilities to make sure that all trading is consistent with the client’s objectives, financial condition, and fa,ily situation.
b. Since aufhauser is not an investment advisor, we do not charge any asset based fees.
c. In rare circumstances, and only upon specific instructions from the client, Aufhauser may act as principal on a trade, in which case Aufhauser will charge a mark-up (down) over (under) the principal amount. Such mark-ups are always disclosed on the trade confirmation and must always be fair and reasonable and in the client’s best interest.
(ii) Description of Other Fees and Costs: All accounts are also subject to Pershing’s fees which Aufhauser passes on to the client:
(iii) Here follows on the next page a list of Pershing fees passed through to clients:
Pershing Fees Passed through to Clients |
|
Mutual Fund and SRS Exchanges |
6.00 per exchange |
Applicable transaction fees |
Pass through |
Checking Stop Payment |
$10 per event |
Returned Checks |
$20 per event |
Check reorder fee |
$10 per reorder |
Confirmation Fee-Retail Client |
$1.00 per confirmation |
DK Items |
|
US |
$10.00 per item |
Non-US |
$10.00 per item/per day |
Foreign Receive and Deliver Fees (For Transfers Only) |
|
Euroclear |
$50.00 per item |
Inactive: |
|
Depositories |
$75.00 per item |
Retail Account Fee |
$25.00 per inactive account, per year |
Mutual Fund Only Accounts |
$12.50 per inactive account, per year |
Margin and COD Extensions |
$10.00 per event |
Paper Delivery Surcharge for Client Statements and Confirms |
$0.75 |
Effective December 1, 2011, Pershing reserves the right to adjust the surcharge based upon changes in postal, paper, vendor or other cost factors. The paper delivery surcharge for client and interested party statements is assessed per physical statement production and billed quarterly in arrears. The paper delivery surcharge for client confirms is accessed on a per trade basis and billed as incurred. |
|
Reorganization ltems—Voluntary |
$20.00 per event |
Bond Redemptions, Puts, and Calls |
|
In Account |
$5.00 per item |
Physical (Within 30 Days of Redemption Date) |
$20.00 per item |
Safekeeping-Name |
$2.00 per account, per position, per month |
Foreign Securities12 |
$2.00 per account, per position, per month |
Transfers |
|
Legal, GNMA, and Restricted Items |
$60.00 per transfer |
Outgoing Account Transfers |
$25.00 per transfer |
Global Transfers-Receive/Delivers |
$25.00 per transfer, plus settlement fees (see Non-USO Services section) |
Accommodation Transfer |
$60.00 per transfer |
Register and Ship Certificate |
$60.00 per transfer |
Direct Registration |
$10.00 per transfer |
Wired Funds |
$10 |
Execution Charges
Equities in these select markets ($25 minimum per ticket) or 20 bps |
||||
Argentina |
Finland |
Israel |
New Zealand |
Spain |
Australia |
France |
Ireland |
Norway |
Switzerland |
Austria |
Germany |
Japan |
Portugal |
Turkey |
Belgium |
Hong Kong |
Luxembourg |
Singapore |
United Kingdom |
China |
Italy |
Mexico |
South Africa |
|
Denmark |
Netherlands |
Sweden |
||
Other Equities, Other Markets ($25 minimum per ticket) |
|
Canada |
CAD .015 cents per share |
Indonesia |
35 bps |
Peru |
35 bps |
Philippines |
35 bps |
Thailand |
35 bps |
Venezuela |
100 bps |
Equities-Additional Markets |
Available Upon Request |
Clearance Services |
|
Equities/Fixed Income/Foreign Exchange (FX) with Pershing |
$14.00 per order |
FX Away from Pershing |
$50.00 per order |
ADR Arbitrage Processing Fee |
$50.00 per event |
ADR Agent Bank Creation/Cancellation Fee |
pass through |
Cancel and Correct Fees |
Billed per the applicable Foreign Settlement Fee listed below |
For countries not on the below list, client will pay Pershing's current foreign settlement fee for that country, available upon request, in addition to the usual $35 commission. Availability of Market to Broker/Client is subject to Pershing approval and rates are subject to change upon notice due to market conditions.
Market |
Settlement Fee (Processed in Currency) |
Settlement Fee (Processed in USD) |
Argentina |
ARS 250 |
US $63 |
Australia |
AUD 30 |
US $27 |
Austria |
EUR 25 |
US $32 |
Belgium |
EUR 20 |
US $25 |
Canada. |
CAD 25 |
US $23 |
China |
CNY 450 |
US $66 |
Denmark |
DKK 150 |
US $26 |
Euroclear |
US $25 |
US $25 |
Finland |
EUR 25 |
us $32 |
France |
EUR 25 |
US $25 |
Germany..... |
EUR 25 |
US $25 |
Hong Kong... |
HKD 200 |
US $26 |
Italy....... |
ERR 20 |
US $26 |
Indonesia... |
IDR 500,000 |
US $55 |
Israel...... |
ILS 200 |
US $53 |
Ireland .... |
GBP 20 |
US $31 |
Japan....... |
JPY 175 |
US $21 |
Luxembourg.. |
EUR 95 |
US $121 |
Mexico ..... |
US 25 |
US $25 |
Netherlands |
EUR 20 |
US $25 |
New Zealand |
NZD 50 |
US $35 |
Norway ..... |
NOK 200 |
US $32 |
Peru........ |
PEN 200 |
US $72 |
Philippines |
PHP 4000 |
US $88 |
Portugal ... |
EUR 30 |
US $38 |
Puerto Rico |
US 40 |
Us 40 |
Singapore |
SGD 75 |
US 55 |
South Africa |
ZAR 175 |
US 24 |
Sweden.. |
SEK 175 |
US 24 |
Spain.. |
EUR 30 |
US 38 |
Switzerland |
CHF 30 |
US 30 |
Thailand |
THB 1500 |
US 48 |
Turkey |
US 66 |
US 66 |
United Kingdom |
GBP 20 |
US 31 |
Venezuela |
VB 150,000 |
US 110 |
(iv) Additional Information: You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying. These fees will include Aufhauser’s commission and any related exchange charge or pass through from Pershing, as indicated on the fee schedule above
(v) Conversation Starter: We encourage you to ask us: “Help me understand how these fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?”
B. “What are your legal obligations to me when providing recommendations? How else does your firm make money and what conflicts of interest do you have?”
(i) Standard of Conduct.
a. We do not provide recommendations. The way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the services we provide you. Here is one example to help you understand what this means: since our commissions are higher if you trade more frequently or in a large volume of shares, we have an interest in encouraging frequent or high volume trading.
(ii) Example of Ways Aufhauser Makes Money and Conflicts of Interest:
a. Proprietary Products: Investments that are issued, sponsored, or managed by you or your affiliates.
b. Revenue Sharing: Investments where the manager or sponsor of those investments or another third party (such as an intermediary) shares with you revenue it earns on those investments.
c. Principal Trading: Investments you buy from a retail investor, and/or investments you sell to a retail investor, for or from your own accounts, respectively.
(iii) Conversation Starter: You are encouraged to ask us: “How might your conflicts of interest affect me, and how will you address them?”
(iv) Additional Information: Since Aufhauser is a broker-dealer that does not provide recommendations subject to Regulation Best Interest, the possible conflicts of interest between Aufhauser and our clients are: commissions paid by the client for investments that are not profitable or that are less profitable because of the commissions charged; any fees incurred by using Pershing as the clearing agent instead of some other clearing agent; to the extent that clients would be better served by commission free brokers such as Fidelity, Schwab, Etrade, Ameritrade or RobinHood.
C. “How do your financial professionals make money?”
(i) Our financial professionals share in the commissions that you are charged.
(ii) Our financial professionals are NOT paid according to the product sold, the amount of client assets, or any other revenue except for commissions on securities bought or sold.
A. “Do you or your financial professionals have legal or disciplinary history?”
B. Yes. R.K. Aufhauser has had 3 reportable customer disputes in 1993 and 1994. As principal of the firm, he has been the recipient of four Regulatory fines for the following: a 2011 failure to report order events to OATS; a 2006 for allowing an inactive person to be registered with our firm; in 1998 for failing fully complete a form related to Y2K matters; in 1993 for placing two orders in a Nasdaq workstation that together exceeded the maximum number of shares permitted within a five minute period.
C. Further information:
(i) Search Tool: Go to visit Investor.gov/CRS for a free and simple search tool to research you and your financial professionals.
(ii) Conversation Starter: We encourage you to ask us: “As a financial professional, do you have any disciplinary history? For what type of conduct?”
A. Additional information about our firm can be found at https://brokercheck.finra.org/ or on our website www.aufsec.com. A copy of the Relationship Summary is also found at www.aufsec.com.
B. Call 212-246-0205 to request up-to-date information and request a copy of the relationship summary.
C. Conversation Starter: We encourage you to ask us: “Who is my primary contact person? Is he or she a representative of an investment adviser or a broker-dealer? Who can I talk to if I have concerns about how this person is treating me?”
D. Aufhauser has Written Supervisory procedures in place to update and change this Customer Relationship Summary when appropriate. Aufhauer will also maintain a record of any changes to this customer relationship summary for six years.