Regulation Best Interest Form CRS

Regulation Best Interest – Form CRS

Regulation Best Interest (REG BI) Overview

On June 5, 2019, the SEC adopted Regulation Best Interest (Reg BI) under the Securities Exchange Act of 1934. Reg BI establishes a “best interest” standard of conduct for broker-dealers and associated persons when they make a recommendation to a retail customer of any securities transaction or investment strategy involving securities, including recommendations of types of accounts. As part of the rulemaking package, the SEC also adopted new rules and forms to require broker-dealers and investment advisers to provide a brief relationship summary, Form CRS, to retail investors that include full and fair disclosure of all material facts relating to the scope and terms of the relationship with the adviser. Regulation Best Interest is an attempt to improve safeguards for investors and standardize conduct of broker-dealers and financial advisers, which include making of investment recommendations that serve the client first and foremost.

 VIEW/DOWNLOAD OUR MHS FORM CRS (PDF)

Form CRS Client Relationship Summary
MHS Advisory Services, LLC
June 11, 2020


Item 1 – Introduction: Is an investment advisory account right for you?

MHS Advisory Services, LLC is registered with the Securities and Exchange Commission as an investment adviser. Please be aware that brokerage and investment advisory services and fees differ and that it is important for you to understand the differences. Free and simple tools are available to research firms and financial professionals at Investor.gov/CRS, which also provides educational materials about broker-dealers, investment advisers, and investing.


Item 2 – What investment services and advice can you provide me?

We offer investment advisory services to retail investors. Our principal services include portfolio management, financial planning, the selection of other advisers and pension consulting. As part of our standard portfolio management service we provide continuous and regular supervisory and/or management services with respect to your account(s). We do not monitor the investments made as a result of a financial plan or pension consulting unless you have hired us for portfolio management services. Our portfolio management services are offered on either a discretionary or non-discretionary basis. Discretionary authorization allows us to determine the specific securities, and the amount of securities, to be purchased or sold for your account without your approval prior to each transaction. Non-discretionary arrangements require us to obtain your approval prior to executing any transactions on behalf of your account. We do not limit our advice to proprietary products, or a limited menu of products or types of investments. We do not require a minimum investment to open and maintain an advisory account.

For additional information, please refer to Items 4, 7, & 13 of our Form ADV Part 2A at the following link: https://adviserinfo.sec.gov/firm/brochure/174590.

Conversation Starters. Ask your financial professional—

  • Given my financial situation, should I choose an investment advisory service? Why or why not?
  • How will you choose investments to recommend to me?
  • What is your relevant experience, including your licenses, education and other qualifications? What do these qualifications mean?

Item 3 – What fees will I pay?

We are primarily compensated by a percentage of assets under our management, hourly fees, fixed fees and third party referral fees. Our fees vary depending on the services you receive. Portfolio management fees are based upon a percentage of your assets under our management, and are payable each month in arrears. The more assets there are in your advisory account, the more you will pay in fees. Therefore, we have an incentive to encourage you to increase the assets in your account. When we refer you to a third party investment adviser, we receive a portion of the third party investment adviser’s fee as compensation. We provide financial planning services for an hourly or fixed fee. Our pension consulting fees are based on hourly, fixed or a percentage of assets under advisement fees depending upon the arrangement. Our fees are negotiable depending upon the complexity and scope of the service, your financial situation, and your objectives.

For additional information regarding our fees, please see Item 5 of our Form ADV Part 2A at the following link: https://adviserinfo.sec.gov/firm/brochure/174590.

Description of Other Fees and Costs: The fees that you pay to our firm for investment advisory services are separate and distinct from the fees and expenses charged by investment companies (e.g., mutual funds, exchange traded funds, unit investment trusts and variable annuities). These fees are described in each fund’s prospectus. These fees will generally include a management fee and other fund expenses. You will also incur transaction charges and/or brokerage fees when purchasing or selling securities. These charges and fees are typically imposed by the broker-dealer or custodian that executes the trade. The broker-dealer or custodian may also charge your account for custodial fees, retirement account fees, trust fees, exchange fees, redemption fees that may be assessed on investment company shares, transfer fees, account termination fees or other special service fees and charges. We do not share in any portion of these fees imposed by the broker-dealer or custodian. To fully understand the total cost you will incur, you should review all the fees charged by investment companies, broker-dealers, our firm, and others.

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. 

For additional information about fees charged by third parties, please refer to Item 5 of Form ADV Part 2A at the following link: https://adviserinfo.sec.gov/firm/brochure/174590.

Conversation Starter. Ask your financial professional—

  • 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?

What are your legal obligations to me when acting as my investment adviser? How else does your firm make money and what conflicts of interest do you have?

When we act as your investment adviser, we have to act in your best interest and not put our interest ahead of yours. At the same time, 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 investment advice we provide you. Here are some examples to help you understand what this means:

  • All investment advisers face conflicts of interest which are inherent in the business. Our primary source of compensation is through asset based fees. Therefore, we are incentivized to acquire new clients and to increase assets under management. Other conflicts of interest result from other business activities we engage in and relationships we have with business partners and third parties, or affiliations we have established with other financial institutions.
  • We may recommend that you use a third party advisor (TPA) and we will share in the compensation received by the TPA for managing your account. The compensation arrangement presents a conflict of interest due to a financial incentive to recommend the services of the third party advisor. You are not required to use the services of any TPA we recommend.

Conversation Starter. Ask your financial professional—

  • How might your conflicts of interest affect me, and how will you address them?

Please refer to our Form ADV Part 2A for further information on our conflicts of interest and how we address them at the following link: https://adviserinfo.sec.gov/firm/brochure/174590.

How do your financial professionals make money?

Our financial professionals receive salary based compensation, a percentage of advisory billings and/or bonuses based on the amount of client assets they bring to our firm. Additionally, financial professionals who are part owners of our firm share in the profits generated by our firm. Therefore, our financial professionals have an incentive to encourage you to increase the assets in your account, and to increase our firm’s profitability. Our financial professionals are insurance agents and registered representatives with Royal Alliance Associates, Inc. a securities broker-dealer. This creates a conflict of interest because these persons will receive additional commission-based compensation in connection with the purchase and sale of insurance and securities, including 12b-1 fees for the sale of certain investment company products. You are not required to purchase insurance or securities from our financial professionals.


Item 4 – Do you or your financial professionals have legal or disciplinary history?

Yes. Although our firm does not have a disciplinary record, some of our financial professionals have disciplinary disclosures on their individual regulatory filings.

For a free, simple search tool to research us and our financial professionals please visit Investor.gov/CRS.

Conversation Starter. Ask your financial professional—

  • As a financial professional, do you have any disciplinary history? For what type of conduct?

Item 5 – Additional Information

For additional information about our advisory services, please refer to our Form ADV Part 2A brochure available at https://adviserinfo.sec.gov/firm/brochure/174590 and the individual Form ADV Part 2B brochure supplement(s) your representative provides. If you have any questions, need up-to-date information and/or need a copy of this Client Relationship Summary, please contact us at (952) 541-9201.

Conversation Starters. Ask your financial professional—

  • 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?