Facet, custodians, and your money: frequently asked questions

Facet works with a few trusted partners who specialize in providing critical behind the scenes services. We carefully vet multiple vendors to ensure Facet members receive excellent service, and we actively manage each relationship for the benefit of our members. The following information applies to all custodians, including Facet’s trusted partner, Apex Clearing Corporation. More about Apex can be learned here.

What is Apex and why does Facet use it?

Apex Clearing Corporation is a clearing firm and custodian, which is a firm that provides multiple services behind the scenes that we use to handle the day-to-day details of the transactions we manage for our members. All financial planning firms that directly manage client assets use custodians, either outside or in-house,  to facilitate the purchase, sale, and storage of securities. While Apex is a custodian, it does not have a direct-retail business that would make it a household name. This connects to one of the main reasons we selected Apex. Unlike some other custodians, Apex provides services without an investment-product bias because it does not have or sell its own investment products. Knowing this, Facet can always make impartial decisions that are in the best interests of our members. 

Why did Facet choose Apex?

After conducting thorough due diligence on multiple custodians, Facet chose Apex for several reasons:

  • Apex provides our experts with the access to capital markets we need to buy and sell securities on behalf of our members.
  • Apex is one of the very few custodians that does not attempt to “push” clients towards their own in-house investment products (which Apex doesn’t offer).
  • Apex offers a combination of low fees, extensive products and services, and technology integration Facet needs to provide a world-class member experience.

How is my money protected at Apex?

Apex is a major custodian, and as of the end of 2022, they manage over 24 million brokerage accounts totaling over $110 billion in assets, while executing over 689million trades on behalf of clients like Facet. While not a household name, Apex manages accounts for hundreds of firms, including many of the most well-known brands in the industry.

As a U.S.-based custodian, Apex is subject to significant regulatory oversight. Among other things, these regulations are designed to protect Apex’s financial integrity, prevent misuse of client funds, and ensure that trades are properly executed.

The Securities Investor Protection Corporation (SIPC) protects against the loss of cash and securities – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash. SIPC protection is limited. SIPC only protects the custody function of the broker dealer, which means that SIPC works to restore to customers their securities and cash that are in their accounts when the brokerage firm liquidation begins. SIPC does not protect against the decline in value of your securities. SIPC does not protect individuals who are sold worthless stocks and other securities. SIPC does not protect against losses due to a broker’s bad investment advice, or for recommending inappropriate investments. Custodians offer SIPC insurance for securities and cash. Apex offers an additional insurance policy to supplement SIPC protection. Note SIPC protection is different from FDIC protection that exists on bank deposits. Likewise, SIPC insurance does not protect against market fluctuation.

How does Facet safeguard accounts at Apex?

Facet closely monitors Apex’s business practices to ensure that they continue to provide reliable services. If we detected any material risk to members, we could simply change custodians. We have back-up agreements prepared and could make such a switch if necessary.

To further protect our members,  Facet’s accounts are segregated from Apex’s company finances. This means that Apex cannot use any of the funds we manage on your behalf for any purpose whatsoever, regardless of their financial condition.

Facet takes the security of your account very seriously. Besides conducting thorough due diligence before working with any partner, we employ ever-evolving tools and infrastructure to safeguard your financial and personal data. Learn more here.

What fees do I pay to Apex?

There are no commissions or other fees for members on any securities or mutual funds. There may be small fees for certain transactions, such as wire transfers or paper checks. Here is a complete list of fees Apex may charge. Additionally, Facet pays Apex for custody services.

Why do I have to sign separate account agreements with Facet and Apex?

Because Facet and Apex are separate entities, both are required to have account agreements with clients. These agreements, which outline the roles and responsibilities of each firm and the client, are standard in the industry.

Why are there criticisms of Apex online?

Apex is a behind-the-scenes technology resource that doesn’t interact directly with clients. However their name often appears on brokerage statements. For this reason, customers who are frustrated with their introducing broker sometimes leave negative reviews for every company they see on their statement, including Apex. We assure you that Apex is fully vetted and we have found their service to be excellent.