A. Description of Your Advisory Firm
KerberRose Wealth Management LLC (“KerberRose” and/or the “firm”), is a Wisconsin limited
liability company owned by KerberRose Holdings, LLC. KerberRose is an independent investment
advisory and financial planning firm offering a variety of financial services since July 2013.
B. Description of Advisory Services Offered
KerberRose is an investment management firm offering proprietary investment management
and financial planning services to individuals and high-net-worth individuals, trusts, retirement
plans, pension and profit-sharing plans, corporations, partnerships, and other legal entities.
Advisory services may include financial planning, investment strategy, portfolio management,
selection of third-party money managers, and tax and estate planning.
B.1. Asset Management Services
KerberRose offers asset management services on a discretionary or non-discretionary basis. For
its discretionary asset management services, KerberRose receives a limited power of attorney to
effect securities transactions on behalf of its clients that include securities and strategies
described in Item 8 of this Brochure.
KerberRose’s discretionary asset management services are predicated on asset allocation
models to create diversified portfolios consisting of individual securities, mutual funds,
exchange-traded funds, and portfolios managed by separate account managers engaged by
KerberRose on the client’s behalf. The asset allocation methodology employed by KerberRose
relies on modern portfolio theory, which involves the application of certain mathematical
principles to the historical risk, return, and correlation characteristics of asset classes to combine
asset classes in such a way that maximizes return potential for a targeted level of risk. The
resulting asset allocation chosen seeks a projected return potential consistent with the client's
investment objectives, goals, tolerance for risk, and other personal and financial circumstances.
In preparing the asset allocation, KerberRose will analyze each client's current investments,
investment objectives, goals, age, time horizon, financial circumstances, investment experience,
investment restrictions and limitations, and risk tolerance. KerberRose’s objective is to review the
client’s tax, financial, and estate planning objectives and goals in connection with the client’s
investment objectives, goals, tolerance for risk, and other personal and financial circumstances,
and make appropriate asset allocation recommendations and implementation decisions.
KerberRose may engage third-party service providers to assist with the tax and estate planning
portion of the services provided to clients. In addition, KerberRose may utilize third-party
software to analyze individual security holdings and separate account managers utilized within
the client’s portfolio. KerberRose will monitor those portfolios and make additional
recommendations from time to time to rebalance and/or reallocate each client's investments.
KerberRose's investment advisory services to clients are based on asset allocation models that,
as noted above, consider a client's personal financial circumstances, investment objectives, and
tolerance for risk (e.g., cash-flow, tax, and estate). KerberRose's engagement with a client will
include, as appropriate, the following:
▪ Providing assistance in reviewing the client's current investment portfolio against the
client's personal and financial circumstances as disclosed to KerberRose in response to a
questionnaire and/or in discussions with the client and reviewed in meetings with
KerberRose.
▪ Analyzing the client's financial circumstances, investment holdings and strategy, and
goals.
▪ Identifying tax planning strategies and tax preparation (to clients with $1 million assets
under management with KerberRose).
▪ Providing assistance in identifying a targeted asset allocation and portfolio design.
▪ Implementing and/or recommending mutual funds, exchange-traded funds, and
individual equity and fixed income securities, each matched to the asset categories in the
client's targeted asset allocation for consideration by the client.
▪ Reporting to the client on a quarterly basis or at some other interval agreed to with the
client, information on contributions and withdrawals in the client's investment portfolio.
▪ Proposing changes in the client's targeted asset allocation in consideration of changes in
the client's personal circumstances, investment objectives and tolerance for risk, the
performance record of any of the client's investments, and/or the performance of any
fund or manager retained by the client.
In addition to providing KerberRose with information regarding their personal financial
circumstances, investment objectives, and tolerance for risk, clients have the to provide
KerberRose with any reasonable investment restrictions that should be imposed on the
management of their portfolio (to be noted on the client agreement), and should promptly
notify KerberRose in writing of any changes in such restrictions or in the client's personal
financial circumstances, investment objectives, goals, and tolerance for risk. KerberRose's will
remind clients of their obligation to inform KerberRose of any such changes or any restrictions
that should be imposed on the management of their accounts. KerberRose will also contact
clients at least annually to determine whether there have been any changes in their personal
financial circumstances, investment objectives, and tolerance for risk.
B.1.a. Schwab Institutional Intelligent Portfolios™
We offer an automated investment program (the “Program”) through which clients are
invested in a range of investment strategies we have constructed and manage, each consisting
of a portfolio of exchange-traded funds (“ETFs”) and a cash allocation. The client’s portfolio is
held in a brokerage account opened by the client at Charles Schwab & Co., Inc. (“CS&Co”). We
use the Institutional Intelligent Portfolios® platform (“Platform”), offered by Schwab
Performance Technologies (“SPT”), a software provider to independent investment advisors
and an affiliate of CS&Co., to operate the Program. We are independent of and not owned by,
affiliated with, or sponsored or supervised by SPT, CS&Co., or their affiliates (together,
“Schwab”). We, and not Schwab, are the client’s investment advisor and primary point of
contact with respect to the Program. We are solely responsible, and Schwab is not responsible,
for determining the appropriateness of the Program for the client, choosing a suitable
investment strategy and portfolio for the client’s investment needs and goals, and managing
that portfolio on an ongoing basis. We have contracted with SPT to provide us with the
Platform, which consists of technology and related trading and account management services
for the Program. The Platform enables us to make the Program available to clients online and
includes a system that automates certain key parts of our investment process (the “System”).
Based on information the client provides to us, we will recommend a portfolio via the System.
The client may then indicate an interest in a portfolio that is one level less or more
conservative or aggressive than the recommended portfolio, but we then make the final
decision and select a portfolio based on all the information we have about the client. The
System also includes an automated investment engine through which we manage the client’s
portfolio on an ongoing basis through automatic rebalancing and tax-loss harvesting (if the
client is eligible and elects).
We charge clients a fee for our services as described below under Item 5: Fees and
Compensation. Our fees are not set or supervised by Schwab. Clients do not pay brokerage
commissions or any other fees to CS&Co. as part of the Program. Schwab does receive other
revenues, including (i) the profit earned by Charles Schwab Bank, a Schwab affiliate, on the
allocation to the Schwab Intelligent Portfolios Sweep Program described in the Schwab
Intelligent Portfolios Sweep Program Disclosure Statement; (ii) investment advisory and/or
administrative service fees (or unitary fees) received by Charles Schwab Investment
Management, Inc., a Schwab affiliate, from Schwab ETFsTM Schwab Funds® and Laudus
Funds® that we select to buy and hold in the client’s brokerage account; (iii) fees received by
Schwab from mutual funds in the Schwab Mutual Fund Marketplace® (including certain
Schwab Funds and Laudus Funds) in the client’s brokerage account for services Schwab
provides; and (iv) remuneration Schwab receives from the market centers where it routes ETF
trade orders for execution.
We do not pay SPT fees for the Platform so long as we maintain $100 million in client assets in
accounts at CS&Co. that are not enrolled in the Program. If we do not meet this condition,
then we pay SPT an annual licensing fee of 0.10% (10 basis points) on the value of our clients’
assets in the Program. This fee arrangement gives us an incentive to recommend or require
that our clients with accounts not enrolled in the Program be maintained with CS&Co.
B.1.b. American Funds Service Company Program
For smaller accounts, including SEP
and Simple IRA’s, we offer the American Funds Service
Company Program that provides Class F-2 shares allowing investors to purchase shares of
mutual funds for an annual asset-based fee. Class F-2 shares do not include 12b-1 fees but
are subject to transfer agency fees, which vary among the funds and are found on individual
fund pages. We, and not American Funds, are the client’s investment advisor and primary
point of contact with respect to the Program. We are solely responsible, and American Funds
is not responsible, for determining the appropriateness of the Program for the client, choosing
a suitable investment strategy and portfolio for the client’s investment needs and goals, and
managing that portfolio on an ongoing basis. We have contracted with American Funds
Service Company to provide us with the Platform, which consists of technology and related
trading and account management services for the Program. The Platform enables us to make
the Program available to clients and includes a system that automates certain key parts of our
investment process. Based on information the client provides to us, we will recommend a
portfolio on the platform.
B.2. Institutional Retirement Investment Advisory Services
Employees in qualified retirement plans are protected by the Employee Retirement Income
Security Act of 1974 (ERISA), which requires employers, investment advisors, and plan
administrators to put employees’ interests first when managing retirement savings plans. Public
retirement systems are governed by similar state laws and often incorporate the protections of
ERISA.
To demonstrate that a plan fiduciary has operated in a prudent manner, there are certain steps
that the fiduciary must take. KerberRose is committed to helping fiduciaries understand their
roles and to assist them in implementing a process that allows them to fulfill their duties and
responsibilities.
KerberRose offers government retirement systems, sponsors of employee benefit plans (defined
contribution and defined benefit) qualified under the Internal Revenue Code (“IRC”), and other
retirement plans not qualified under the IRC (including Taft-Hartley organizations and “church”
plans) a range of discretionary and non-discretionary services, including the selection of
registered investment companies or other pooled investment funds to be offered under the
plan.
KerberRose will assist plan fiduciaries in the following:
▪ Plan-Level Investment Services
• Review plan’s investment objectives
• Review Qualified Designated Investment Alternatives (QDIA)
• Recommend plan menu design
• Assist in development of Investment Policy Statement (IPS)
• Construct model portfolios
• Provide investment monitoring and reporting
• Recommend and monitor investment options
• Serve as a fiduciary as an investment adviser with the plan sponsor
▪ Plan Operation Related Services
• Attend plan committee meetings
• Review plan committee governance and structure
• Review ERISA Section 404(c) compliance
• Review ERISA fidelity bond
• Review fiduciary insurance policy
• Develop and maintain fiduciary file
• Analyze plan design
• Provide ongoing support for plan operation
• Review ERISA spending accounts or Plan Expense Recapture Accounts (PERAs)
• Provide periodic benchmarking of fees, services, and investments
• Monitor service providers
• Generate and evaluate service provider Requests for Information (RFIs)
• Generate and evaluate service provider Requests for Proposal (RFPs)
• Support contract negotiations with service providers
• Provide service provider transition and/or plan conversion support
• Provide fiduciary education to plan committee
▪ Participant-Level Investment Services
• Develop participant education and communication strategy
• Conduct employee education meetings
• Conduct group enrollment meetings
• Conduct one-on-one participant meetings
• Render participant advice
• Provide phone/email support to participants
• Deliver participant communications
• Review progress against education strategy goals
KerberRose also provides assistance with strategic employee education and communications in
connection with client retirement plan programs.
B.3. Financial Planning and Consulting Services
KerberRose offers the following financial planning and consulting services on an hourly or fixed
fee basis to its clients. In addition, KerberRose offers a subscription service to its financial
planning clients.
B.3.a. Investment Consulting
KerberRose will assess the client’s financial risk preferences by determining the extent to which
the client would choose to risk experiencing a less favorable outcome in pursuit of a more
favorable outcome, and will make a recommendation of a target asset allocation based upon
the client’s financial situation and risk tolerance. KerberRose will also perform an evaluation of
the client’s current investment holdings and make recommendations, if appropriate, to bring
the client’s current investments into alignment with his or her risk tolerance and agreed-upon
target asset allocation.
B.3.b. Financial Planning
KerberRose will provide planning and counseling for the client to help quantify and prioritize
his or her financial goals by order of importance, and KerberRose will determine the likely
degree of success the client has in meeting each defined financial goal based on the
assumptions made. KerberRose will prepare “what if” alternatives, if appropriate, to help the
client understand trade-offs of contemplated decisions. KerberRose will also use “Monte
Carlo” simulations to illustrate to the client how small changes in various factors can impact his
or her chances of meeting financial goals.
The services may include such things as developing a full financial plan, portfolio evaluation,
educational funding planning, retirement planning, estate planning, tax projections and
planning, risk management including a review of insurance coverage (which will generally
exclude property and casualty insurance), planning for special needs family members,
negotiation of the purchase of substantial assets, and budgeting. IAR will provide written or
verbal recommendations, depending on the services selected and mutually agreed to by client.
If the client chooses to have a full financial plan, it will be written and may encompass such
things as net worth statement, cash flow projections, income tax projections, retirement
planning, estate planning, educational funding, special healthcare needs funding,
recommendations regarding insurance coverage (generally excluding property and casualty
insurance, unless the advisor is licensed to and does sell these products), and non-
discretionary investment recommendations.
KerberRose will provide financial planning services as mutually agreed upon with the client as
further described below:
▪ Reviewing and prioritizing goals and objectives.
▪ Developing a summary of current financial situation, including a net worth statement,
cash flow summary, and income tax analysis.
▪ Reviewing current investment portfolio and developing an asset management strategy.
▪ Assessing exposure to financial risk and developing a risk management plan (insurance).
▪ Completing a retirement planning assessment, including financial projections of assets
required during retirement.
▪ Identifying tax planning strategies to optimize financial position.
▪ Assessing estate net worth and liquidity and developing an estate plan to ensure legacy
objectives are met.
▪ Integrating and prioritizing all strategies outlined above into a comprehensive financial
plan.
▪ Presenting a written financial plan to be reviewed in detail with the client, containing
recommendations designed to meet stated goals and objectives and supported by
relevant financial summaries.
▪ Developing an action plan to implement the agreed-upon recommendations.
▪ Providing referrals to other professionals, as required, to assist with implementation of
the action plan.
B.3.c. Financial Planning Subscription Service
Upon completion of the financial engagement, clients may contract with KerberRose for
ongoing financial planning on a monthly subscription basis. This ongoing service will include
email and telephone support, employee benefits review, and additional planning on topics
important to the client.
C. Client-Tailored Services and Client-Imposed Restrictions
Each client’s account will be managed on the basis of the client’s financial situation and
investment objectives, and in accordance with any reasonable restrictions imposed by the client
on the management of the account—for example, restricting the type or amount of security to
be purchased in the portfolio.
D. Wrap Fee Programs
KerberRose does not participate in wrap fee programs. (Wrap fee programs offer services for
one all-inclusive fee.)
E. Client Assets Under Management
As of December 31, 2023, KerberRose had $549,733,154 in discretionary assets and
$202,609,318 in non-discretionary assets under management.