Wealth Preservation Strategies, LLC

Initial Business Response / [redacted] (1000, 11, 2016/01/08) */ Contact Name and Title: [redacted] , Owner Contact Phone: XXX-XXX-XXXX Contact Email: [redacted] @yahoo.com In response to Mr [redacted] 's comments: [redacted] (***'s wife) has been a client of mine since 7/Over the years she had been asking me if I would sit down with her husband [redacted] and look at his 401kIn November Mr [redacted] talked to me about moving part of his 401k and wondering what I had availableAt that time, he was in a high risk portfolio and was looking for lower riskI told him about our fee based platform that is no-load but charges a fee of per quarter (2.75%)per yearI always explain the fees upfront to every client, and have fee disclosures signed by Mr [redacted] dated 11/27/12, 7/1/14, and 5/14/I can share them with you but I would need permission from Mr [redacted] to share them with a 3rd party We use a platform that has tactical management; the managers seek to manage down side risk while taking advantage of market trends in high yield bond fundsWhat that means is the managers can move to cash to try and avoid large loses in the marketIt's considered low to moderate risk They have very good track record over the last years, but past performance is no guarantee of future resultsI have Statements of Understanding signed by Mr [redacted] dated 11/27/12, 7/1/14, and 5/14/stating the time period of a market cycle is 3-years, that there is risk in this account and you could lose money, and "past performance is no guarantee of future results" Mr [redacted] states that no attempt was made to change the productAgain the cycle is 3-years, the managers are actively managing the accounts, making trades, moving to cash when necessaryWe did change to a different fund manager on the smaller account on 7/1/14, and when he was unhappy this past spring we moved the other account on 5/14/ Mr [redacted] stated that all his accounts did was lose moneyHe invested $68,with me on 11/27/He opened accounts, one with $43,And the other with $25,The investments were up the first 1/years, but lost money the last yearHe asked to move his money to cash on smaller account on 4/28/That account he requested the money sent to Allianz to invest in an annuity with me as his agentHe then requested to free look the policy and have the money sent directly to him to reinvest with another custodian, the total from that account was $23,On 6/24/15, he requested to have his other account liquidated and the check sent to him to reinvestI called to explain to Mr [redacted] that the IRS changed the ruling on IRA rollover that you can only do one per year, the second one could be taxableHe then asked to have it sent to his bank at TCFI had a lot of trouble getting this money transferred, the check never arrived, a wire was rejected, and finally had a check sent overnight to his bankI covered the cost for thisThe total moved to TCF was $45,The total of these two disbursements moved out of his accounts was $69,151.53, so from 2012-he was up a little over $ On 4/28/15, Mr [redacted] asked me if I would consider giving back part of my fees I collected due to under performanceI told him that I didn't believe I was allowed to do that, but I would check to see if they would make an exceptionWhen we met on 5/14/I told him I wasn't allowed to do thatAfter all of the transfers were completed, he then sent an email on 9/7/(Labor Day) asking if I would consider making it right by returning part of the feesI sent him an email on 9/12/stating that I would have to check with my Compliance Department to see if that would be allowedI sent him an email on 9/18/stating that I talked to my Compliance Department and I am not allowed to return fees due to underperformance Mr [redacted] sent me an email on 10/1/(I didn't see this email, being he is no longer a client I removed him from my contact list, so it went to my SPAM folder) saying he invested nearly $70k with me and received back just over 69kHe again asked me to revisit the return of fee, he said he asked me, not my compliance department He sent another email on 11/15/I didn't reply to the last email because when is it enough? He asked to move his accounts from me in June, all of the money was moved out by 8/28/15, and I still am getting emails from him in November Our compliance department does not allow us to return fees due to underperformanceThe reason is it falls in a grey area with regulators, as we are not allowed to do performance based feesHe is asking that I repay part of my fees, but the $2,he is asking for, is more then I collected in fees in the time he was invested with me Thanks, [redacted] Initial Consumer Rebuttal / [redacted] (2000, 13, 2016/01/21) */ The customer indicated that he/she accepted the business response

Initial Business Response /* (1000, 11, 2016/01/08) */
Contact Name and Title: [redacted], Owner
Contact Phone: XXX-XXX-XXXX
Contact Email: [redacted]@yahoo.com
In response to Mr. [redacted]'s comments:
[redacted] ([redacted]'s wife) has been a client of mine since 7/2009. Over...

the years she had been asking me if I would sit down with her husband [redacted] and look at his 401k. In November 2012 Mr. [redacted] talked to me about moving part of his 401k and wondering what I had available. At that time, he was in a high risk portfolio and was looking for lower risk. I told him about our fee based platform that is no-load but charges a fee of .687 per quarter (2.75%)per year. I always explain the fees upfront to every client, and have fee disclosures signed by Mr. [redacted] dated 11/27/12, 7/1/14, and 5/14/15. I can share them with you but I would need permission from Mr. [redacted] to share them with a 3rd party.
We use a platform that has tactical management; the managers seek to manage down side risk while taking advantage of market trends in high yield bond funds. What that means is the managers can move to cash to try and avoid large loses in the market. It's considered low to moderate risk.
They have very good track record over the last 10 years, but past performance is no guarantee of future results. I have Statements of Understanding signed by Mr. [redacted] dated 11/27/12, 7/1/14, and 5/14/15 stating the time period of a market cycle is 3-5 years, that there is risk in this account and you could lose money, and "past performance is no guarantee of future results".
Mr. [redacted] states that no attempt was made to change the product. Again the cycle is 3-5 years, the managers are actively managing the accounts, making trades, moving to cash when necessary. We did change to a different fund manager on the smaller account on 7/1/14, and when he was unhappy this past spring we moved the other account on 5/14/15.
Mr. [redacted] stated that all his accounts did was lose money. He invested $68,984.43 with me on 11/27/12. He opened 2 accounts, one with $43,984.43 And the other with $25,000.00. The investments were up the first 1 1/2 years, but lost money the last year. He asked to move his money to cash on smaller account on 4/28/15. That account he requested the money sent to Allianz to invest in an annuity with me as his agent. He then requested to free look the policy and have the money sent directly to him to reinvest with another custodian, the total from that account was $23,652.97. On 6/24/15, he requested to have his other account liquidated and the check sent to him to reinvest. I called to explain to Mr. [redacted] that the IRS changed the ruling on IRA rollover that you can only do one per year, the second one could be taxable. He then asked to have it sent to his bank at TCF. I had a lot of trouble getting this money transferred, the check never arrived, a wire was rejected, and finally had a check sent overnight to his bank. I covered the cost for this. The total moved to TCF was $45,498.56. The total of these two disbursements moved out of his accounts was $69,151.53, so from 2012-2015 he was up a little over $167.00.
On 4/28/15, Mr. [redacted] asked me if I would consider giving back part of my fees I collected due to under performance. I told him that I didn't believe I was allowed to do that, but I would check to see if they would make an exception. When we met on 5/14/15 I told him I wasn't allowed to do that. After all of the transfers were completed, he then sent an email on 9/7/15 (Labor Day) asking if I would consider making it right by returning part of the fees. I sent him an email on 9/12/15 stating that I would have to check with my Compliance Department to see if that would be allowed. I sent him an email on 9/18/15 stating that I talked to my Compliance Department and I am not allowed to return fees due to underperformance.
Mr. [redacted] sent me an email on 10/1/15 (I didn't see this email, being he is no longer a client I removed him from my contact list, so it went to my SPAM folder) saying he invested nearly $70k with me and received back just over 69k. He again asked me to revisit the return of fee, he said he asked me, not my compliance department.
He sent another email on 11/15/15. I didn't reply to the last email because when is it enough? He asked to move his accounts from me in June, all of the money was moved out by 8/28/15, and I still am getting emails from him in November.
Our compliance department does not allow us to return fees due to underperformance. The reason is it falls in a grey area with regulators, as we are not allowed to do performance based fees. He is asking that I repay part of my fees, but the $2,500 he is asking for, is more then I collected in fees in the time he was invested with me.
Thanks,
[redacted]
Initial Consumer Rebuttal /* (2000, 13, 2016/01/21) */
The customer indicated that he/she accepted the business response.