Harbour is a Wisconsin headquartered securities broker/dealer and federal registered
investment adviser incorporated in 1987. Nick W. Sondel owns 75% or more of the firm.
Harbour’s principal place of business is Madison, Wisconsin and its telephone number is
(608) 662-6100. Harbour and its Investment Adviser Representatives (“IARs”) provide a
variety of investment advisory services to clients and range from “non-discretionary” to
“full discretionary.” Third party programs as well as financial planning programs are also
offered as described below. Clients and prospective clients should note that participation
in any of Harbour’s Wrap Fee Programs may cost the client more or less than purchasing
the services separately. Factors which influence cost include the negotiated fee for the
program, the frequency of trading in the account, the type of management sought, as well
as other factors intrinsic to specific accounts.
Financial Planning and Consultation
For clients needing financial advice involving analysis of a particular investment, overall
holdings, or a short or long-term financial situation, Harbour and its IARs provide Financial
Planning and Consultation Services to meet client's financial objectives and needs.
Harbour's financial planning services usually include, but are not limited to an analysis of
client's existing assets, investment objectives, insurance, investments, cash flows, risk
management, retirement projections, estate or business plans, savings plans, or other
special objectives. The scope of the financial plan is as broad or detailed as the client
reasonably specifies. Harbour's consultation services include, but are not limited to,
investment advice regarding retirement, education or estate planning, or the modification
of an existing financial plan. For a client requesting advice on only a portion of their
financial plan or regarding a limited project, Harbour and IAR will provide consultation
services limited to the client’s request. Harbour’s services generally consist of a review and
analysis of all relevant data supplied by the client. A written report(s) may be generated
based on the scope of the plan and client's objectives.
Asset Management Services – Wrap Fee Programs – Non-Discretionary
Harbour sponsors several Wrap Fee Programs featuring various levels of discretionary
authority given to Harbour and its IARs by the client to manage investments in an account.
The following also provides descriptions of the Wrap Fee Programs. Harbour and its IARs
receive a fee (described further below) based on Assets Under Management (“AUM”) for its
services. Each program begins with the IAR helping a client identify investment and
financial objectives. The IAR and the client develop strategies based on various criteria
including but not limited to: current resources, level of income, net worth, risk tolerance,
time horizon, investment objectives, present and deferred employee benefits, self-
employed income and benefits, tax situation, insurance programs and estate planning
considerations. Harbour relies on the information provided by the client in providing this
advice. The scope of the asset management service depends on the client’s specifications.
The IAR will be available to consult with, and respond to client questions as well as those of
any advisers the client may designate regarding client's financial situation and Harbour’s
recommendations. Harbour and IAR do not guarantee the results of any recommendation.
All trading in the account must first obtain the approval of the client before the transaction
is effectuated.
Asset Management Services include most investment vehicles. Typical products are
common and preferred stocks, bonds, exchange-traded funds, municipal securities, mutual
funds and annuities, both variable and fixed. Harbour recommends different investment
strategies, including short-term ones. Generally, however, Harbour recommends strategies
for long- term investing. A client's securities portfolio will typically be custodied at one of
Harbour’s transaction clearing firms, Pershing Advisor Solutions (“PAS”), Charles Schwab
Institutional or American Funds Service Company. Harbour and its IARs participate in
Schwab Intelligent Portfolios, an automated investment advisory service. Schwab
Intelligent Portfolios is made available through Schwab Wealth Investment Advisory, Inc., a
registered investment adviser. Harbour and its IARs participate in American Funds F-2
Direct Program. Class F-2 mutual funds are purchased directly through American Funds.
Clients are subject to annual maintenance fees and set up costs for IRA accounts through
American Funds.
Custodial and clearing firms generate monthly, quarterly or annual reports about the
client’s accounts. In addition, however, Harbour and its IAR’s may also generate quarterly
or annual investment reports as well. Harbour and the IAR will not normally generate a
written report to review specific or generic products or to discuss planning or investment
strategies. In general, Harbour and its IAR will provide supplemental reports only when the
client requests these. A client's actively managed holdings can be held at a custodian other
than those listed above upon agreement with Harbour. Since these accounts are non-
discretionary, i.e. all trading must be done with the client’s express prior approval, clients
may elect not to invest in certain securities or types of securities.
Asset Management Services – Wrap Fee Programs – Limited Discretionary
Harbour also sponsors a Wrap Fee Program in which an IAR recommends a limited
discretionary account. In these accounts, a client gives the IAR authority to rebalance a
client account portfolio consisting of mutual funds, exchange traded funds, individual
equities or common stocks and bonds. The IAR determines a range of asset allocation for
holdings expressed as a percentage of total assets. Due to the different performance of
holdings, the value of each as a percentage of total assets may differ over time from the
original range. When an individual holding as a percentage of total assets is outside this
range, the IAR may rebalance the portfolio to bring the percentage into the target range.
The IAR rebalances the account portfolio when deemed necessary in his her or her
discretion without prior notice to the customer.
The IAR also decides to replace holdings with a mutual fund or exchange traded fund. For
example, in certain portfolios invested in large-cap stocks, a similar mutual fund or
exchange traded fund that invests in large-cap stocks may replace these holdings in the
IAR’s discretion. All other aspects of a limited discretionary account follow the non-
discretionary account noted directly above. When mutual funds are being purchased,
when possible, the IAR will use Adviser Mutual Funds which are typically lower cost to the
client. The IAR shall also seek to select share classes of mutual funds which, in the adviser’s
opinion, meet the client’s needs at a lower cost. Share classes are usually denoted by
alphabet letters like “A,” “B,” “C,” etc. Each has different cost structures incurred in
connection with holding the product, as further discussed in the prospectus of the product.
Asset Management Services – Wrap Fee Programs – Full Discretionary
Harbour also sponsors a Program in which an IAR recommends a full discretionary
account. In these accounts, Harbour and its IAR have discretion to make trades and decide
the quantity, price and timing of each trade, all without the client’s specific permission.
Clients grant this authorization by executing a discretionary trading power of attorney. All
other aspects of a full discretionary account follow the account approaches noted directly
above.
Third Party Manager – Wrap Fee Programs
Harbour also sponsors a Program in which the IAR recommends an independent
investment manager(s) provide portfolio management services for the client. Harbour has
agreements with such third party managers. These include: Q3 Asset Management, LVZ
Advisors and others. To facilitate account reporting when using third party managers,
account assets are usually custodied as designated by the third party manager. They
generally require all securities transactions for the client's account be executed by the
custodian. Once a client has selected a manager program, Harbour and its IAR supply the
program manager with information regarding the financial background and investment
objectives as the client provides. The client executes an advisory agreement with the
program whereby the third party independent manager(s) agrees to accept and manage
the client’s account on a discretionary basis according to client objectives. A client may
also use a third party manager platform such as Charles Schwab Institutional. This
platform has access to numerous additional third party managers.
If Harbour and its IAR become aware of changes in a client's financial circumstances or
objectives, it informs the client's manager. Updated financial information about a client is
not collected by Harbour and IAR on a regular basis or given to a manager unless Harbour
and IAR are made aware of changes by the client. Clients also communicate changes
directly with the client's manager. Harbour receives a portion of the wrap fee charged for
our services.
Client assets are managed in all of the above programs. As a point of comparison, at
December 31, 2023, Harbour advisors managed assets of approximately $6,101,862,276;
$4,819,394,782 under Limited/Full Discretionary authority and $1,282,467,494 on a non-
discretionary basis. Harbour also had approximately $881,837,794 under Third Party-
Manager-Wrap Fee Programs on a non-discretionary basis.
Asset Management Services – Participant Account Management – Discretionary
We use a third-party platform to facilitate management of held away assets such as defined
contribution plan participant accounts, with discretion. The platform allows us to avoid
being considered to have custody of Client funds since we do not have direct access to
Client log-in credentials to affect trades. We are not affiliated with the platform in any way
and receive no compensation from them for using their platform. A link will be provided to
the Client allowing them to connect an account(s) to the platform. Once Client account(s) is
connected to the platform, the IAR will review the current account allocations. When
deemed necessary, the IAR will rebalance the account considering client investment goals
and risk tolerance, and any change in allocations will consider current economic and
market trends. The goal is to improve account performance over time, minimize loss during
difficult markets, and manage internal fees that harm account performance. Client
account(s) will be reviewed and allocation changes will be made as deemed necessary.