Firm De script ion
HFG Advisors, Inc. (“HFG”), also doing business as HFG Advisors was founded in
August 2014 and is an investm ent advisor registered with the Securities and
Exchange Com m ission or SEC. On April 1, 2021, Richard “Rick” D. Prim e, sold 100%
of his ownership interest in Prim e Wealth Managem ent Inc., to HFG Trust, LLC, thus
m aking Prim e Wealth Managem ent a wholly-owned subsidiary of HFG Trust, LLC
(“HFG Trust”). HFG Trust LLC, is a Washington State lim ited liability com pany which
received its Trust charter from the State of Washington Departm ent of Financial
Institutions, Division of Banks, and is a wholly owned subsidiary of Com m unity First
Bank.
HFG is a fee based investm ent m anagem ent and financial planning firm . HFG does
not act as a custodian of client assets. The client always m aintains asset control.
HFG also provides financial planning services such as tax planning, tax preparation,
legacy planning, educational planning, and financial budgeting for a fee to clients.
An evaluation of each client's initial situation is provided to the client, often in the
form of a net worth statem ent, risk analysis or sim ilar docum ent. Periodic reviews
are also com m unicated to provide rem inders of the specific courses of action that
need to be taken. More frequent reviews occur but are not necessarily
com m unicated to the client unless im m ediate changes are recom m ended.
HFG will create and m anage socially conscious investm ent portfolios when desired
by clients who feel it is im portant to reflect their values through their investm ents.
Other professionals (e.g., lawyers, accountants, insurance brokers and agents, etc.)
are engaged directly by the client on an as-needed basis. Under CCR Section
260.238(k), HFG, its representatives or any of its em ployees will disclose to the
clients all m aterial conflicts of interest.
Type s of Advisory Se rvice s
HFG provides investm ent supervisory services, also known as asset m anagem ent
services and furnishes financial planning.
ASSET MANAGEMENT
HFG offers com prehensive asset m anagem ent services on a wrap and non-wrap fee
basis as described in Appendix A.
ERISA PLAN SERVICES
HFG provides services to qualified retirem ent plans including 401(k) plans, 403(b)
plans, pension and profit-sharing plans, cash balance plans, and deferred
com pensation plans. HFG m ay act as either a 3(21) or 3(38) advisor:
Limited Scope ERISA 3(21) Fiducia ry. HFG m ay serve as a lim ited scope ERISA 3(21)
fiduciary that can advise, help and assist plan sponsors with their investm ent
decisions on a non-discretionary basis. As an investm ent advisor HFG has a
fiduciary duty to act in the best interest of the client. The plan sponsor is still
ultim ately responsible for the decisions m ade in their plan, though using HFG can
help the plan sponsor delegate liability by following a diligent process.
HFG offers the following services to the Plan and the Plan participants:
1. Fiduciary Services are:
a. Provide non-discretionary investm ent advice to the Client about asset classes
and investm ent alternatives available for the Plan in accordance with the
Plan’s investm ent policies and objectives. Client will m ake the final decision
regarding the initial selection, retention, rem oval and addition of investm ent
options.
b. Assist the Client with the selection of a broad range of investm ent options
consistent with ERISA Section 404(c) and the regulations there under.
c. Assist the Client in the developm ent of an investm ent policy statem ent
(“IPS”). The IPS establishes the investm ent policies and objectives for the
Plan. Client shall have the ultim ate responsibility and authority to establish
such policies and objectives and to adopt and am end the IPS.
d. Meet with Client on a periodic basis to discuss the reports and the
investm ent recom m endations.
e. Provide non-discretionary investm ent advice to the Plan Sponsor with
respect to the selection of a qualified default investm ent alternative for
participants who are autom atically enrolled in the Plan or who have
otherwise failed to m ake investm ent elections. The Client retains the sole
responsibility to provide all notices to the Plan participants required under
ERISA Section 404(c) (5).
f. Assist in m onitoring investm ent options by preparing periodic investm ent
reports that docum ent investm ent perform ance, consistency of fund
m anagem ent and conform ance to the guidelines set forth in the IPS and
m ake recom m endations to m aintain, rem ove or replace investm ent options.
2. Non-fiduciary Services are:
a. Assist in the education of Plan participants about general investm ent
inform ation and the investm ent alternatives available to them under the
Plan. Client understands HFG’s assistance in education of the Plan
participants shall be consistent with and within the scope of the Departm ent
of Labor’s definition of investm ent education (Departm ent of Labor
Interpretive Bulletin 96-1). As such, HFG is not providing fiduciary advice as
define by ERISA to the Plan participants. HFG will not provide investm ent
advice concerning the prudence of any investm ent option or com bination of
investm ent options for a particular participant or beneficiary under the Plan.
b. Assist in the group enrollm ent m eetings designed to increase retirem ent
plan participation am ong the em ployees and investm ent and financial
understanding by the em ployees.
c. HFG m ay provide these services or, alternatively, m ay arrange for the Plan’s
other providers to offer these services, as agreed upon between HFG and
Client.
3. HFG has no responsibility to provide services related to the following types of
assets (“Excluded Assets”):
a. Em ployer securities;
b. Real estate (except for real estate funds or publicly traded REITs);
c. Stock brokerage accounts or m utual fund windows;
d. Participant loans;
e. Non-publicly traded partnership interests;
f. Other non-publicly traded securities or property (other than collective trusts
and sim ilar vehicles); or
g. Other hard-to-value or illiquid securities or property.
Excluded Assets will n ot be included in calculation of Fees paid to HFG under this
Agreem ent.
HFG will not have discretion or custody, at any tim e, of client funds and/or
securities.
ERISA 3(38) Investment Ma na ger. HFG can also act as an ERISA 3(38) Investm ent
Manager in which it has discretionary m anagem ent and control of a given
retirem ent plan’s assets. HFG would then becom e solely responsible and liable for
the selection, m onitoring and replacem ent of the plan’s investm ent options.
1. Fiduciary Services are:
• HFG has discretionary authority and will m ake the final decision regarding
the initial selection, retention, rem oval and addition of investm ent options in
accordance with the Plan’s investm ent policies and objectives.
• Assist the Client with the selection of a broad range of investm ent options
consistent with ERISA Section 404(c) and the regulations thereunder.
• Assist the Client in the developm ent of an investm ent policy statem ent
(“IPS”). The IPS establishes the investm ent policies and objectives for the
Plan.
• Provide discretionary investm ent advice to the Plan Sponsor with respect to
the selection of a qualified default investm ent alternative for participants
who are autom atically enrolled in the Plan or who have otherwise failed to
m ake investm ent elections. The Client retains the sole responsibility to
provide all notices to the Plan participants required under ERISA Section
404(c) (5).
2. Non-fiduciary Services are:
• Assist in the education of Plan participants about general investm ent
inform ation and the investm ent alternatives available to them under the
Plan. Client understands the HFG’s assistance in education of the Plan
participants shall be consistent with and within the scope of the Departm ent
of Labor’s definition of investm ent education (Departm ent of Labor
Interpretive Bulletin 96-1). As such, the HFG is not providing fiduciary advice
as defined by ERISA to the Plan participants. HFG will not provide investm ent
advice concerning the prudence of any investm ent option or com bination of
investm ent options for a particular participant or beneficiary under the Plan.
• Assist in the group enrollm ent m eetings designed to increase retirem ent
plan participation am ong the em ployees and investm ent and financial
understanding by the em ployees.
HFG m ay provide these services or, alternatively, m ay arrange for the Plan’s other
providers to offer these services, as agreed upon between HFG and Client.
3. HFG has no responsibility to provide services related to the following types of
assets (“Excluded Assets”):
• Em ployer securities;
• Real estate (except for real estate funds or publicly traded REITs);
• Stock brokerage accounts or m utual fund windows;
• Participant loans;
• Non-publicly traded partnership interests;
• Other non-publicly traded securities or property (other than collective trusts
and sim ilar vehicles); or
• Other hard-to-value or illiquid securities or property.
Excluded Assets will n ot be included in calculation of Fees paid to the Adviser on
the ERISA Agreem ent. Specific services will be outlined in detail to each plan in the
408(b)2 disclosure.
Retirem ent Plan Rollover Recom m endations
When HFG provides investm ent advice about your retirem ent plan account or
individual retirem ent account (“IRA”) including whether to m aintain investm ents
and/or proceeds in the retirem ent plan account, roll over such
investm ent/proceeds from the retirem ent plan account to a IRA or m ake a
distribution from the retirem ent plan account, we acknowledge that HFG is a
“fid u cia ry” within the m eaning of Title I of the Em ployee Retirem ent Incom e
Security Act (“ERISA”) and/or
the Internal Revenue Code (“IRC”) as applicable, which
are laws governing retirem ent accounts. The way HFG m akes m oney creates
conflicts with your interests so HFG operates under a special rule that requires HFG
to act in your best interest and not put our interest ahead of you.
Under this special rule’s provisions, HFG m ust act as a fiduciary to a retirem ent plan
account or IRA under ERISA/IRC:
• Meet a professional standard of care when m aking investm ent
recom m endations (e.g., give prudent advice);
• Never put the financial interests of HFG ahead of you when m aking
recom m endations (e.g., give loyal advice);
• Avoid m isleading statem ents about conflicts of interest, fees, and
investm ents;
• Follow policies and procedures designed to ensure that HFG gives
advice that is in your best interest;
• Charge no m ore than is reasonable for the services of HFG; and
• Give Client basic inform ation about conflicts of interest.
To the extent we recom m end you roll over your account from a current retirem ent
plan account to an individual retirem ent account m anaged by HFG, please know
that HFG and our investm ent adviser representatives have a conflict of interest.
We can earn increased investm ent advisory fees by recom m ending that you roll
over your account at the retirem ent plan to an IRA m anaged by HFG. We will earn
fewer investm ent advisory fees if you do not roll over the funds in the retirem ent
plan to an IRA m anaged by HFG.
Thus, our investm ent adviser representatives have an econom ic incentive to
recom m end a rollover of funds from a retirem ent plan to an IRA which is a conflict
of interest because our recom m endation that you open an IRA account to be
m anaged by our firm can be based on our econom ic incentive and not based
exclusively on whether or not m oving the IRA to our m anagem ent program is in
your overall best interest.
We have taken steps to m anage this conflict of interest. We have adopted an
im partial conduct standard whereby our investm ent adviser representatives will (i)
provide investm ent advice to a retirem ent plan participant regarding a rollover of
funds from the retirem ent plan in accordance with the fiduciary status described
below, (ii) not recom m end investm ents which result in HFG receiving unreasonable
com pensation related to the rollover of funds from the retirem ent plan to an IRA,
and (iii) fully disclose com pensation received by HFG and our supervised persons
and any m aterial conflicts of interest related to recom m ending the rollover of funds
from the retirem ent plan to an IRA and refrain from m aking any m aterially
m isleading statem ents regarding such rollover.
When providing advice to your regarding a retirem ent plan account or IRA, our
investm ent advisor representatives will act with the care, skill, prudence, and
diligence under the circum stances then prevailing that a prudent person acting in a
like capacity and fam iliar with such m atters would use in the conduct of an
enterprise of a like character and with like aim s, based on the investm ent
objectives, risk, tolerance, financial circum stances, and a client’s needs, without
regard to the financial or other interests of HFG or our affiliated personnel.
Tax Advisory and Preparation Services
Tax return preparation services are offered to HFG clients for an additional fee.
Services can include:
• Individual incom e tax
• Trust tax returns
• Business tax returns
• Estate tax returns
These services are provided as an additional service. The tax preparation fee is in
addition to the client’s wealth m anagem ent fee. In lim ited circum stances, at HFG’s
discretion, tax preparation services are included as part of the standard wealth
m anagem ent fee being charged to a client (HFG, in its sole discretion, can waive or
negotiate fees). No client is under any obligation to engage HFG for tax preparation
services.
FINANCIAL PLANNING AND CONSULTING
If financial planning services are applicable, HFG offers the packages below.
One-tim e consultation services:
Services for one-tim e consultations include but are not lim ited to:
• A thorough review of all applicable topics including:
Scop e of Se rvice s
• Personal Incom e and Net Worth Report(s) • Business Financial Advice
• Asset Allocation and Investm ent Analysis • Business Retirem ent/Succession Plannin
• General Analysis and Planning • Strategic Tax Advice
• Education Planning • Real Estate Analysis
• Retirem ent Planning and Analysis • Corporate Retirem ent Plan Review
• Estate Planning • Risk Managem ent
• Stock Options and Concentrated Stock
Positions
• Social Security Analysis
• Insurance Planning • Tax Preparation
Financial plans will be com pleted and delivered inside of forty-five (45) days
dependent upon tim ely client delivery of required docum entation. Clients m ay
term inate advisory services with thirty (30) days written notice.
Ongoing consultation services:
When ongoing services are required HFG will provide services to help the client
clearly identify goals, set a fram ework for success, and ensure that you have an
accountability partner to help keep you on track to a successful financial future.
Ongoing consulting services will be offered on the Scope of Services above.
Clients that participate in the ongoing services program can expect the following:
• One quarterly m eeting up to 60 m inutes in person, via telephone or online
interface to determ ine financial goals and values, what the client’s current
financial picture looks like (including assets, debts, incom e and spending),
and what current lim itations or hurdles the client m ay be facing. Client shall
be responsible for providing a com pleted Client profile or other required
docum ents prior to this m eeting, at this m eeting or within a reasonable tim e
after this m eeting.
• One quarterly m eeting up to 45 m inutes to deliver financial planning
recom m endations, action item s, and a prioritized “to-do” list.
• One quarterly check-in phone call or e-m ail up to 30 m inutes for
accountability, encouragem ent and to address ongoing services.
California Code of Regulations, 10 CCR Section 260.235.2, requires that any conflict
of interest which exists between the interests of the investm ent advisor and the
interests of the client when offering financial planning services be disclosed. The
client is under no obligation to act upon the investm ent advisor’s recom m endation.
If the client elects to act on any of the recom m endations, the client is under no
obligation to effect the transaction through HFG.
Client m ay cancel within five (5) business days of signing Agreem ent without any
obligation.
Referral Of Third-Party Money Managers
HFG offers advisory services by referring clients to a third-party m oney m anager
offering asset m anagem ent and other investm ent advisory services. The third-
party m anagers are responsible for continuously m onitoring client accounts and
m aking trades in client accounts when necessary. As a result of the referral, we are
paid a portion of the fee charged and collected by the third-party m oney m anagers
in the form of solicitor fees. Each solicitation arrangem ent is perform ed pursuant
to a written solicitation agreem ent and is in com pliance with SEC Rule 206(4)-3 and
applicable state securities rules and regulations.
We are available to answer questions that you m ay have regarding your account
and act as the com m unication conduit between you and the third-party m oney
m anager. The third-party m oney m anager m ay take discretionary authority to
determ ine the securities to be purchased and sold for your account. We do not
have any trading authority with respect to your designated account m anaged by
the third-party m oney m anager.
Although we review the perform ance of num erous third-party investm ent adviser
firm s, we enter into only a select num ber of relationships with third-party
investm ent adviser firm s that have agreed to pay us a portion of the overall fee
charged to our clients. Therefore, HFG has a conflict of interest in that it will only
recom m end third-party investm ent advisors that will agree to com pensate us for
referrals of our clients.
Clients are advised that there m ay be other third-party m anaged program s not
recom m ended by our firm , that are suitable for the client and that m ay be m ore or
less costly than arrangem ents recom m ended by our firm . No guarantees can be
m ade that a client’s financial goals or objectives will be achieved by a third-party
investm ent adviser recom m ended by our firm . Further, no guarantees of
perform ance can ever be offered by our firm (Please refer to Item 8 – Methods of
Analysis, Investment Strategies and Risk of Loss for more details.)
SEMINARS AND WORKSHOPS
HFG holds sem inars and workshops to educate the public on different types of
investm ents and the different services they offer. The sem inars are educational in
nature and no specific investm ent or tax advice is given.
Clie n t Ta ilore d Se rvice s a n d Clie n t Im pose d Re st rict ion s
The goals and objectives for each client are docum ented in our client files.
Investm ent strategies are created that reflect the stated goals and objective. Clients
m ay im pose restrictions on investing in certain securities or types of securities.
Agreem ents m ay not be assigned without written client consent.
Wra p Fe e Progra m s
HFG sponsors a wrap fee program . The client pays one fee to HFG which includes
HFG’s Managem ent Fee and the transaction costs associated with the transactions.
More inform ation is available in the Form ADV Part 2, Appendix 1.
Clie n t Asse t s Un d e r Ma n a ge m e n t
As of Decem ber 31, 2023, HFG has $250,160,836 of assets under m anagem ent.
$3,171,019 m anaged on a non-discretionary basis and $246,989,817 are m anaged
on a discretionary basis.