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Firm Information
Catalyst Financial Partners LLC (“CFP” or the “Advisor”) is a registered investment advisor with the
United States Securities and Exchange Commission (File No. 801-114398) and has been
registered since December 6, 2018. CFP is organized as a limited liability company under the laws
of the Commonwealth of Massachusetts. CFP was founded in August 2018, but only recently
commenced operations.
CFP is a fiduciary to its Clients, as defined under applicable laws and regulations. As a fiduciary,
CFP upholds a duty of loyalty, fairness and good faith towards each Client and seeks to mitigate
potential conflicts of interest.
Advisory Services Offered
CFP offers investment supervisory/wealth management services to high-net-worth individuals,
family offices, pension and profit-sharing plans, charitable institutions, foundations, endowments,
trusts, and other entities (each referred to as a “Client”).
CFP may provide its services on a wrap fee basis as a wrap program sponsor. Under CFP’s Wrap
Fee Program (the “Program”), the Client generally receives discretionary and non-discretionary
investment advisory services, the execution of securities brokerage transactions, custody and
reporting services for a single specified fee (the “CFP’s Program Wrap Fee”). Participation in a
wrap program may cost the Client more or less than purchasing such services separately.
Additionally, CFP’s Wrap Program Fee charged by CFP for participation in the Program may be
higher or lower than those charged by other sponsors of comparable wrap fee programs.
CFP’s Wrap Program Fee includes brokerage commissions, transaction fees, expenses related to
financial planning and other related costs and expenses. Clients may incur certain charges imposed
by custodians, brokers, third-party investment managers and other third parties such as fees
charged by managers, custodial fees, deferred sales charges, odd-lot differentials, transfer taxes,
wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts and
securities transactions. Mutual funds and exchange traded funds also charge internal management
fees, which are disclosed in a fund's prospectus. Such charges, fees and commissions are
exclusive of and in addition to CFP’s Fee, and CFP does not receive any portion of these fees and
costs.
Please Note: Wrap Fee Program-Conflict of Interest. Because wrap program transaction fees
and/or commissions are being paid by CFP to the account custodian/broker-dealer, CFP could
have an economic incentive to maximize its compensation by seeking to minimize the number of
trades in the Client's account.
Investment Management Services
CFP furnishes its services to Clients on a discretionary and a non-discretionary basis. However,
Clients who engage CFP on a non-discretionary basis must be willing to accept that CFP cannot
effect any account transactions without obtaining prior verbal consent to any such transaction(s)
from the Client. Thus, in the event of a market correction (up or down) during which the Client is
unavailable, CFP will be unable to effect any account transactions (as it would for its discretionary
Clients) without first obtaining the Client’s verbal consent.
The strategies offered by CFP are listed below. Additionally, CFP may manage Client portfolios in
accordance with specialized or hybrid strategies not listed. In managing accounts, CFP consults at
the outset with the Client to establish investment objectives and goals, and to determine an
appropriate investment strategy suited to the Client's investment goals and objectives. The
numbers in parentheses next to the strategy represent the approximate percentage of equities/fixed
income/alternative investments. However, the actual percentages may vary due to drift and market
activity.
CFP Strategies:
CFP offers a number of diversified portfolio strategies, ranging in risk tolerance from conservative to
aggressive. The portfolios consist of equities, fixed income instruments and alternative investments,
and may include individual securities, separately managed accounts, mutual funds, index funds,
bonds, bond funds and alternative investments. The strategies offered by CFP include the following
(the numbers in parentheses next to the strategy represent the approximate percentage of
equities/fixed income/alternative investments. However, the actual percentages may vary due to
drift and market activity):
Income (0-100-0)
The primary goal of the portfolio is current income. Capital preservation has a significant, but less
important role. Fixed income securities seek to provide current income, help limit the overall
portfolio volatility and preserve capital. Portfolio risk is minimal.
Stability (30-70-0)
The primary goal of the portfolio is stability. Fixed income securities seek to provide current income
and a limitation on the overall portfolio volatility. Equities play a lessor role. Equity exposure seeks
to provide principal appreciation. Portfolio risk is low.
Conservative (40-57-3)
The primary goal of the portfolio is current income. Principal appreciation has a significant, but less
important role. Fixed Income securities seek to provide current income and a limitation on the
overall portfolio volatility. Equity exposure seeks to provide capital appreciation. A modest exposure
to alternatives is used to broaden diversification and also to reduce volatility. Portfolio risk is low to
moderate.
Balanced (50-47-3)
The primary goals of the portfolio are equally divided between growth of principal and generation of
income. Equity exposure seeks to provide principal appreciation. Fixed Income securities seek to
provide current income and a limitation on the overall portfolio volatility. A modest exposure to
alternatives is used to broaden diversification and also to reduce volatility. Portfolio risk is
moderate.
Moderate Growth (60-35-5)
The primary goal of the portfolio is growth of principal. Current income has a significant, but less
important role. Equity exposure seeks to provide principal appreciation. Fixed Income securities
seek to provide current income and a limitation on the overall portfolio volatility. A modest exposure
to alternatives is used to broaden diversification and also to reduce volatility. Portfolio risk is
moderate.
Growth (70-25-5)
The primary goal of the portfolio is growth. Current income plays a lessor role. Equity exposure
seeks to provide principal appreciation. Fixed Income is used primarily to reduce overall portfolio
volatility and current income. A modest exposure to alternatives is used to further broaden
diversification and also to modestly reduce volatility. Portfolio risk is moderately aggressive.
Aggressive Growth (80-13-7)
The primary goal of the portfolio is aggressive growth. Current income is not important. Equity
exposure seeks to provide principal appreciation and the bulk of the total return. Fixed Income is
used primarily to reduce overall portfolio volatility. An exposure to alternatives is used to broaden
diversification and also to reduce volatility. Portfolio risk is aggressive.
Maximum Growth (90-0-10)
The goal of the portfolio is very aggressive growth. Equity exposure seeks to provide principal
appreciation and the bulk of the total return. Fixed Income, if used, will be a minor allocation and its
primary role is to reduce overall portfolio volatility. An exposure to alternatives is used to broaden
diversification and also to reduce volatility. Portfolio risk is very aggressive.
Additionally, CFP may manage Client portfolios in accordance with specialized or hybrid strategies
not listed. In managing accounts, CFP consults at the outset with the Client to establish investment
objectives and goals, and to determine an appropriate investment strategy suited to the Client's
investment goals and objectives.
CFP also provides customized investment advisory solutions for its Clients. This is achieved in
consultation with the Client while providing discretionary investment management and related
advisory services. CFP works closely with each Client to identify appropriate investment goals and
objectives and risk tolerance to create a suitable portfolio strategy. CFP will then construct an
investment portfolio, consisting of exchange traded funds (“ETFs”), exchange traded notes
(“ETNs”), index funds, separately managed accounts and/or some mutual funds and/or private
funds to achieve the Client’s investment goals and objectives. CFP may also utilize individual
stocks, bonds, municipal bonds or options contracts to meet the needs of its Clients. Certain types
of investments may be retained based on a Client’s legacy portfolio construction.
For certain portfolios, CFP may recommend the purchase or sale of alternative investments.
Examples include Real Estate Investment Trusts (“REITs”), master limited partnerships (“MLPs”),
commodities, hedge fund replicator strategies, managed futures, separately managed accounts
(“SMAs”) and the like. CFP will provide the specific risks that are associated with these types of
investments to each Client in advance of investing Client accounts.
CFP’s investment strategies are primarily long-term focused. However, CFP may buy, sell or re-
allocate positions that have been held less than one year to meet the objectives of the Client or due
to market conditions. CFP will construct, implement and monitor the portfolio to ensure it meets the
goals, objectives, circumstances, and risk tolerance agreed to by the Client. Each Client will have
the opportunity to place reasonable restrictions on the types of investments to be held in their
respective portfolio, subject to acceptance by CFP. CFP evaluates and selects investments for
inclusion in Client portfolios after applying its due diligence process. CFP may recommend one or
more of the following;
• redistributing investment allocations to diversify the portfolio;
• increases or decreases to sector or asset class weightings;
• selling positions for reasons that include but are not limited to: harvesting capital gains or
losses; business, sector or asset class risk exposure; overvaluation, overweighting or
underweighting of the position[s] in the portfolio; change in risk tolerance of the Client;
generating cash to meet Client needs; or any risk deemed unacceptable for the Client’s risk
tolerance; or
• employing cash or short-term fixed income positions as a possible hedge against market
movements.
At no time will CFP accept or maintain custody of a Client’s funds or securities. All Client assets will
be managed within the designated account[s] at the Custodian, pursuant to the terms of the
agreement.
Use of Independent or Sub-Advisory Managers
CFP may recommend that a Client utilize one or more unaffiliated investment managers, sub-
advisors or investment platforms (collectively “Independent Managers”) for all or a portion of a
Client’s investment portfolio. In such instances, the Client may be required to authorize and enter
into an advisory agreement with the Independent Manager that defines the terms pursuant to which
the Independent Manager will provide investment management and related services. CFP may also
assist in the development of the initial policy recommendations and managing the ongoing Client
relationship. CFP will perform initial and ongoing oversight and due diligence over the selected
Independent Manager to ensure the Independent Manager’s strategies and target allocations
remain aligned with the Clients’ investment objectives and overall best interests. The Client, prior to
entering into an agreement with an Independent Manager, will be provided with the Independent
Manager's Form ADV Part 2A (or a brochure that makes the appropriate disclosures).
Limitations of Non-Investment Consulting/Implementation Services. CFP does not hold itself
out as providing legal, account or insurance services and no portion of CFP’s services should be
construed as legal, accounting or insurance implementation services. Accordingly, CFP does not
prepare estate planning documents, tax returns or sell insurance products. However, to the extent
requested by a Client, CFP may recommend the services of other professionals for certain non-
investment implementation purposes (e.g.,. attorneys, accountants, insurance agents, etc.),
including, as disclosed below, IARs in their separate capacities as registered representatives or
licensed agents of a broker/dealer. The Client is under no obligation to engage the services of any
such recommended professional. The Client retains absolute discretion over all such
implementation decisions and is free to accept or reject any recommendation from CFP. CFP does
not receive any compensation for such recommendations.
Please Note: If the Client engages any such recommended professional, and a dispute arises
thereafter relative to such engagement, the Client agrees to seek recourse exclusively from and
against the engaged professional. At all times, the engaged licensed professional[s] (i.e., attorney,
accountant, insurance agent, etc.), and not CFP, shall be responsible for the quality and
competency of the services provided.
Financial Planning/Financial Consulting Services
CFP may provide its Clients with financial planning and financial consulting services upon request.
The precise scope and nature of such an engagement is determined on a Client-by-Client basis.
These services generally involve cash flow analyses, integrating portfolio management into long-
range planning, integrating general tax and estate implications into long-range planning and
assisting Clients in planning their financial futures for themselves and next generations.
In performing its services, CFP is expressly authorized to rely on any information given by the
Client or the Client’s professionals and CFP is not required to verify any information received from
the Client or from the Client’s other professionals. Each Client is advised that it remains the Client’s
responsibility to promptly notify CFP and MMLIS if there is ever any change in his/her/its financial
situation or investment objectives for the purpose of reviewing/evaluating/revising CFP’s previous
recommendations and/or services.
Use of Mutual and Exchange Traded Funds: CFP utilizes mutual funds and exchange traded
funds for its Client portfolios. In addition to CFP’s investment advisory fee described below, and
transaction and/or custodial fees discussed below, Clients will also incur, relative to all mutual fund
and exchange traded fund purchases, charges imposed at the fund level (e.g., management fees
and other fund expenses).
Socially Responsible Investing Limitations. Socially Responsible Investing involves the
incorporation of Environmental, Social and Governance considerations into the investment due
diligence process (“ESG). There are potential limitations associated with allocating a portion of an
investment portfolio in ESG securities (i.e., securities that have a mandate to avoid, when possible,
investments in such products as alcohol, tobacco, firearms, oil drilling, gambling, etc.). The number
of these securities may be limited when compared to those that do not maintain such a mandate.
ESG securities could underperform broad market indices. Investors must accept these limitations,
including potential for underperformance. Correspondingly, the number of ESG mutual funds and
exchange traded funds are few when compared to those that do not maintain such a mandate. As
with any type of investment (including any investment and/or investment strategies recommended
and/or undertaken by CFP), there can be no assurance that investment in ESG securities or funds
will be profitable, or prove successful.
Borrowing Against Assets/Risks. A Client who has a need to borrow money could determine to do
so by using:
• Margin-The account custodian or broker-dealer lends money to the Client. The custodian
charges the Client interest for the right to borrow money, and uses the assets in the Client’s
brokerage account as collateral or
• Pledged Assets Loan- In consideration for a lender (i.e., a bank, etc.) to make a loan to
the Client, the Client pledges its investment assets held at the account custodian as
collateral.
These above-described collateralized loans are generally utilized because they typically provide
more favorable interest rates than standard commercial loans. However, such loans are not without
potential material risk to the Client’s investment assets. The lender (i.e., custodian, bank, etc.) will
have recourse against the Client’s investment assets in the event of loan default or if the assets fall
below a certain level. For this reason, CFP does not recommend such borrowing unless it is for
specific short-term purposes (i.e., a bridge loan to purchase a new residence). CFP does not permit
such borrowing for investment purposes (i.e., to invest borrowed funds in the market).
If the Client determines to utilize margin or a pledged assets loan, the following economic benefits
may inure to CFP:
• by taking the loan rather than liquidating assets in the Client’s account, CFP continues to
earn a fee on such Account assets;
• if the Client invests any portion of the loan proceeds in an account to be managed by CFP,
CFP will receive an advisory fee on the invested amount; and,
• if CFP’s advisory fee is based upon the higher margined account value (see margin
disclosure at Item 5 below), CFP will earn a correspondingly higher advisory fee. This could
provide CFP with a disincentive to encourage the Client to discontinue the use of margin.
Please Note: The Client must accept the above risks and potential corresponding consequences
associated with the use of margin or a pledged assets loans.
Client Account Management
Prior to engaging CFP to provide advisory services, each Client is required to enter into one or
more agreements with CFP that define the terms, conditions, authority and responsibilities of CFP
and the Client. The agreements include, without limitation, an engagement letter, an Investment
Policy Statement and Risk Questionnaire (“IPS”), a fee agreement and the appropriate paperwork
required by the custodian and, if applicable, by the co-advisor. The services covered by these
agreements may include:
• Establishing an Investment Strategy – CFP, in connection with the Client, will develop a
strategy that seeks to achieve the Client’s goals and objectives. The strategy is designed to
address the Client’s personal goals, investment goals, and both long-term and short-term
objectives.
• Asset Allocation – CFP will develop a strategic asset allocation that is targeted to meet the
investment objectives, time horizon, financial situation and tolerance of risk for each Client.
• Portfolio Construction – CFP will develop a portfolio for the Client that is intended to meet
the stated goals and objectives of the Client.
• Investment Management and Supervision – CFP will provide investment
management and
ongoing oversight of the Client’s investment portfolio.
• Financial Planning – CFP will also provide financial planning for Clients upon request.
• Custodial Arrangements – CFP has agreements with one or more custodians that will
custody the assets in the portfolios created by CFP for the Client.
CFP shall provide investment advisory services specific to the needs of each Client, and shall
allocate and/or recommend that the Client allocate investment assets consistent with the
designated investment objective(s). The Client may, at any time, impose reasonable restrictions, in
writing, on the CFP’s services.
Unaffiliated Private Investment Funds
As disclosed on Part 2A of CFP’s Form ADV, CFP may recommend, on a non-discretionary basis,
that certain clients consider an investment in unaffiliated private investment funds. All clients that
determine to become investors in a fund will generally receive an Offering Memorandum prepared
by the fund sponsor (discussing the fund's investment objectives, risk factors, conflicts, etc.) and
shall generally be required to enter into a Subscription Agreement acknowledging the terms and
conditions of the fund and/or venture and the corresponding risk factors, including loss of principal
and liquidity constraints. CFP will only recommend private funds to those clients for whom it
reasonably believes such an investment to be suitable, given the client’s total portfolio, risk
parameters and liquidity needs. CFP shall not exercise any discretion as to whether or not a client
shall invest in any private fund. Rather, the ultimate investment decision shall remain with the client.
Private Investment Fund Suitability Determination
Private investment funds generally involve various risk factors, including, but not limited to, the
potential for complete loss of principal, liquidity constraints and lack of transparency. A complete
discussion is set forth in each fund’s offering documents, which will be provided to each client for
review and consideration. Unlike liquid investments that a client may maintain, private investment
funds do not provide daily liquidity or pricing. Each prospective client investor will be required to
complete a Subscription Agreement, pursuant to which the client shall establish that he/she is
qualified for investment in the fund and acknowledges and accepts the various risk factors that are
associated with such an investment.
Because of the above factors associated with a private fund investment, CFP must make a
determination as to whether a specific private fund is appropriate for the client. In so doing, CFP
shall consider the following factors:
• The type of offering-including risks, time horizon, and liquidity issues;
• The client's investment objective(s)-realizing that for certain clients, a private fund of any
kind may not be suitable;
• The client's current portfolio allocation;
• The client's available cash to commit to the private fund;
• The private fund's investment minimum per investor; and
• The client's current allocation to private investment funds.
Private Investment Fund Allocation Policy
In the event that the amount of any private offering made available to CFP 's clients is limited, such
that an allocation cannot be recommended to each identified client (per the above criteria), CFP will
endeavor to make the recommendation to all identified clients until the available fund allocation is
filled. Thereafter, in the event of a similar type future offering, the Firm will start the
recommendation process with those previously identified clients for whom a recommendation was
not made due to limited availability (assuming that they remain CFP clients and the offering is
determined to be suitable given the above criteria).
Barring mitigating circumstances (i.e., time constraints, minimum required investment, etc.), CFP’s
representatives and/or affiliated persons shall not participate in any private offering until each
identified client has been given an opportunity to consider making an investment in the specific
fund (understanding that an unsuccessful attempt to contact an identified client qualifies as having
given the identified client an opportunity to consider making an investment in the specific fund).
Prior to the client investing in any private fund, the client shall receive both the Confidential Private
Offering Memorandum and corresponding Subscription Agreement, which must be executed by the
client and submitted to the fund sponsor for review/acceptance.
Portfolio Activity
CFP has a fiduciary duty to provide services consistent with the Client’s best interest. As part of its
investment advisory services, CFP (on occasion and, in conjunction with an IAR representative, if
applicable) will review Client portfolios on an ongoing basis to determine if any changes are
necessary based upon various factors, including, but not limited to, investment performance,
market conditions, fund manager tenure, style drift, account additions/withdrawals, and/or a change
in the Client’s investment objective. Based upon these factors, there may be extended periods of
time when CFP determines that changes to a Client’s portfolio are neither necessary, nor prudent.
Clients remain subject to the fees described below during periods of account inactivity.
Cash Positions
At any specific point in time, depending upon perceived or anticipated market conditions/events
(there being no guarantee that such anticipated market conditions/events will occur), CFP may
maintain cash positions for defensive purposes. In addition, while assets are maintained in cash,
such amounts could miss market advances. All cash positions (money markets, etc.) shall be
included as part of assets under management for purposes of calculating CFP’s advisory fee.
Assets Under Management
As of February 29, 2024, CFP managed a total of $827,306,982 in Discretionary assets for Client
investment accounts.
Custodian Services
In addition to the foregoing portfolio management and other services, the Program includes the
custody services of a broker/dealer, such as Charles Schwab & Co., Inc. ("Schwab"), PNC and
SEI. CFP is independently owned and operated and not affiliated with these custodians. These
custodians will act solely as custodian and not as a broker or investment adviser to you. Each of
them will have no discretion over your account and will act solely on instructions received from
CFP on your behalf. The custodian has no responsibility for our services and undertakes no duty
to you to monitor our management of your account or other services CFP provides to you. The
custodian will hold your assets in a brokerage account and buy and sell securities and execute
other transactions when CFP instructs them to do so.
Fees and Compensation
The following paragraphs detail the wrap fee structure and compensation methodology for services
provided by CFP under the Program. The Client and CFP will enter into a written Engagement
Letter agreement detailing the fee for each account.
Fees for Advisory Services
Investment Management Services
The fees charged by CFP (the “Fee” or “Fees”) are paid monthly, in arrears, based on the prior
month’s average daily balance of the account, pursuant to the terms of the engagement letter executed
by the Client and CFP. The Fee is applied to the entire account value. The Fee is based on several
factors, including, without limitation: the complexity of the services to be provided, the level of assets to
be managed, and the overall relationship with CFP. Relationships with multiple objectives, specific
reporting requirements, portfolio restrictions and other complexities may be charged a higher Fee. The
Fee schedule is attached and made part of the engagement letter signed by the Client.
The Fee includes brokerage commissions, transaction fees, expenses related to financial planning
and other related costs and expenses. Clients may incur certain charges imposed by custodians,
brokers, third-party investment managers and other third parties such as fees charged by
managers, custodial fees, deferred sales charges, odd-lot differentials, transfer taxes, wire transfer
and electronic fund fees, and other fees and taxes on brokerage accounts and securities
transactions. Mutual funds and exchange traded funds also charge internal management fees,
which are disclosed in a fund's prospectus. Such charges, fees and commissions are exclusive of
and in addition to the Fee, and CFP does not receive any portion of these fees or costs.
Fees Under Direct Relationship with CFP
For Clients who enter into a direct relationship with CFP alone (i.e., not through an IAR registered
with a broker-dealer), the Fees charged are negotiable but may not exceed 1.5%. The exact
amount of each Client’s Fee will be as agreed upon and set forth in the Client Engagement Letter
agreement between CFP and the Client.
Fees Under Promoter Agreements
Representatives of, and/or, MML Investors Services, LLC or of Osaic Institutions (the “Promoter”)
are paid ( 1 ) a promoter fee (the “Promoter Fee”) for their services in referring Clients to CFP for
Investment advisory services and (2) an administrative fee for administrative services in supporting
CFP’s advisory services, including supervising the Promoter’s representatives (the “Promoter
Administrative Fee”). The range of the Promoter Fee and the Promoter Administrative Fee is
negotiable, but the total Fee charged to the Client may not exceed 1.5%. The exact amount of each
Client’s Fee will be as agreed upon and set forth is set forth in the Client Engagement Letter
agreement between CFP and the Client.
Please refer to Exhibit A of your Catalyst Investment Advisory Agreement for the Fees
associated with your Account(s).
Fee Differential
For Clients referred by a Promoter, the total Fee charged by CFP is the sum of CFP’s Fee, the
Promoter Fee and the Promoter Administrative Fee paid by CFP to the broker/dealer and/or the IAR,
as described above. This may result in a differential in the fees charged by CFP for: (1)
accounts with respect to which CFP pays a Promoter Fee and a Promoter Administrative Fee; and
(2) accounts for which no such arrangements or different arrangements exist or as to which all or a
portion of such fee has been waived. Such differential is equal to the amount of the Promoter
Fee and Promoter Administrative Fee. Except for this differential, no additional charges or costs are
incurred by a Client by virtue of the Promoter activities.
Additionally, CFP, in its discretion, may charge a lesser investment advisory fee, charge a flat fee,
waive its fee entirely, or charge fees on a different interval, based upon certain criteria (i.e.
anticipated future earning capacity, anticipated future additional assets, dollar amount of assets to
be managed, related accounts, account composition, complexity of the engagement, anticipated
services to be rendered, grandfathered fee schedules, employees and family members, courtesy
accounts, competition, negotiations with Client, etc.). As a result, similarly situated Clients could
pay different fees. In addition, similar advisory services may be available from other investment
advisers for similar or lower fees.
The Program may cost you more or less than purchasing our investment advice and the
custodian/brokerage services separately. The relative cost of the Program is influenced by various
factors, including the cost of CFP’s investment advice and the custodian/brokerage services if
purchased separately, the types of investments held and traded in the Account, and the frequency
and size of trades CFP makes in the Account. For example, if the number of transactions in the
Account is low enough, or if the Account materially consists of securities or asset types that do not
incur commissions or transaction fees, the wrap fee may exceed a stand-alone investment advisory
fee and separate brokerage commissions that otherwise would have paid. In addition, because the
fees CFP pays custodians and those that comprise a portion of the wrap fee include certain
transaction fees, Accounts that trade relatively frequently could disproportionately benefit from the
Program compared to accounts that trade less frequently. Fees for stand-alone investment advisory
services that are comparable to those CFP provides as part of the Program fall in the same range
as fees for account in the Program.
As noted above, the nature and extent of the services provided by the Promoter and by CFP may
have an impact on the total fee charged to a particular Account. Where the Client was referred to
CFP by a Promoter, the Promoter receives a payment for its services, the Promoter’s IAR receives
a payment for the IAR’s services, and CFP receives its platform fee. Accordingly, CFP has a
conflict of interest because CFP could have an economic incentive to maximize its compensation
by seeking to minimize the number of transaction/total costs in an Account.
Fee Billing
Pursuant to the terms of the engagement letter executed by the Client and CFP, Fees are paid
monthly, in arrears, at the end of each month based on the average daily balance of the assets under
management during the month. The Fee is applied to the entire account value unless stated otherwise
in the engagement letter or in a subsequent agreement. The Fee is based on several factors, including,
without limitation: the complexity of the services to be provided, the level of assets to be managed, and
the overall relationship with CFP. Relationships with multiple objectives, specific reporting
requirements, portfolio restrictions and other complexities may be charged a higher Fee. The Fee
schedule is attached and made part of the engagement letter signed by the Client.
CFP may, in its discretion, reduce or waive the minimum asset requirement, charge a lesser fee,
charge a flat fee, waive its fee entirely, waive its fees as to certain assets, or charge fees on a
different interval, based upon certain criteria (i.e. anticipated future earning capacity, anticipated
future additional assets, dollar amount of assets to be managed, related accounts, account
composition, complexity of the engagement, anticipated services to be rendered, grandfathered fee
schedules, employees and family members, courtesy accounts, competition, negotiations with
Client, etc.).
Other Fees and Expenses
Clients may incur certain fees or charges imposed by third parties, other than CFP, in connection
with investments made in an Account. The Client is responsible for all custody and securities
execution fees charged by the Custodian and executing broker-dealer (if any). The fees charged by
CFP are separate and distinct from these custodial and execution fees.
In addition, the Fee paid to CFP for investment advisory services is separate and distinct from the
expenses charged by mutual funds and exchange-traded funds to their shareholders, if applicable.
These fees and expenses are described in each fund’s prospectus. These fees and expenses will
generally be used to pay management fees for the funds, other fund expenses, account
administration (e.g., custody, brokerage and account reporting), and a possible distribution fee. A
Client could invest in these products directly, without the services of CFP, but would not receive the
services provided by CFP which are designed, among other things, to assist the Client in
determining which products or services are most appropriate for each Client’s financial situation
and objectives. Accordingly, the Client should review both the fees charged by the fund and the
fees charged by CFP to fully understand the total fees to be paid. Please refer to “Item 12 –
Brokerage Practices” for additional information.
Margin Accounts: Risks/Conflict of Interest. CFP does not recommend the use of margin for
investment purposes. A margin account is a brokerage account that allows investors to borrow
money to buy securities and/or for other non-investment borrowing purposes. By using borrowed
funds, the customer is employing leverage that will magnify both account gains and losses. Should
a Client determine to use margin, CFP will include the entire market value of the margined assets
when computing its advisory fee. Accordingly, the Fee shall be based upon a higher margined
account value, resulting in CFP earning a correspondingly higher advisory fee. As a result, the
potential of conflict of interest arises since CFP may have an economic disincentive to recommend
that the Client terminate the use of margin.
Termination
Investment Management Services
The Client or CFP may terminate the investment advisory agreement at any time, effective on thirty
(30) days’ written notice. If the Client did not receive a copy of CFP’s Brochure within forty-eight
(48) hours prior to the time of executing the investment advisory agreement, the Client may
terminate within five (5) days of establishing an Account with a full rebate of fees.
Termination will not affect the validity of any action previously taken by CFP under the investment
advisory agreement, liabilities or obligations of the parties from transactions initiated before
termination, or the obligation of the Client to pay fees and expenses incurred through the date of
termination.
Termination will not automatically result in the redemption or sale of any positions held in the
Account, and the Client may choose to continue holding the securities in a standard brokerage
account or move the holdings to an advisor or broker/dealer of the Client’s choosing. Prior to the
effective date of termination, the Client is obligated to provide written instructions to CFP as to
where the Account or the cash proceeds therefrom should be transferred. If the Client does not
provide such written instructions on a timely basis, or in the event of no instructions from the Client,
the Account assets will be sold, and the cash proceeds (less any outstanding fees or charges) will
be sent to the Client’s address of record. This sale of Account assets may result in certain tax and
other liabilities for which the Client is responsible.
On the effective date of termination, CFP shall no longer have an investment advisory relationship
with the Client and will have no further obligation towards the Client for investment advisory
services up to the date of termination.
The Client is responsible to pay for all services rendered, and all transactions effected, up through
the date of termination.
Compensation for Sales of Securities
CFP does not buy or sell securities to earn commissions and does not receive any compensation
for securities transactions in any Client account, other than CFP’s Wrap Program Fees described
above.
Performance-Based Fees and Side-By-Side Management
CFP is not a party to any performance or incentive-related compensation arrangements with its
Clients.
CFP does not manage any proprietary investment funds or limited partnerships and has no financial
incentive to recommend any particular investment option to its Clients.