Foundation Wealth Management, LLC (“FWM” or the “Firm”) was formed in 2003 and is
majority owned by Pamela A. Hardin, President. FWM is an investment adviser providing
investment management services as well as financial planning and consulting services.
FWM’s mission is to provide objective, intelligent, comprehensive financial advice to each of
our clients in the most personalized, timely and cost-effective manner.
Assets Under Management as of December 31, 2023:
Discretionary $ 459,607,471
Non-Discretionary $ 65,527,999
Total $ 525,135,470
FWM provides ongoing monitoring and continuous investment advice to 401k participants
whose assets are custodied at a third-party service provider. These assets are included in the
above non-discretionary assets under management figure.
Investment Management Services:
All clients are required to enter into an agreement with FWM before we provide investment
management services to them. The agreement sets forth the terms and conditions under
which FWM shall render its services.
FWM gathers information about the Firm’s clients through in-depth personal interviews.
Information gathered includes a client’s current financial status, future goals and attitudes
towards risk. This information is documented in a Confidential Financial Data worksheet
maintained by FWM. Related documents are supplied by each client and all information is
carefully reviewed by FWM in order to create the investment recommendations for that
client. Implementation of the Firm’s recommendations occurs only after the client has
completed the investment management agreement and all authorizations with the
appropriate financial institutions.
FWM’s clients are advised to promptly notify FWM if there are ever any changes in their
financial situation or investment objectives or if they wish to impose any reasonable
restrictions upon FWM’s investment management services. Additions to client accounts are
in cash or securities, provided that FWM reserves the right to liquidate any transferred
securities, or decline to accept particular securities into a client’s account. FWM consults
with its clients about the options and ramifications of transferring securities. Clients can
withdraw account assets on notice to FWM, subject to the usual and customary securities
settlement procedures. FWM designs its portfolios as long-term investments and asset
withdrawals may impair the achievement of a client’s investment objectives. FWM
recommends that client assets be held in brokerage accounts held at Fidelity Investments.
Retirement Plan Services
FWM provides investment advisory services to businesses and non-profit organizations
with their 401(k) and employee benefit plans.
Trustees and Investment Committees
FWM provides investment advisory services to investment committees and trustees of
Defined Benefit Plans, Non-Participant directed 401(k) plans and Non-Profit Organizations.
FWM acts as a 3(21) Investment Fiduciary providing investment advice for a fee to the
trustees or the committee to implement.
Participant Directed Retirement Plans
FWM provides investment advisory services to investment committees and trustees of
Participant Directed Retirement Plans. FWM acts as a 3(21) Investment Fiduciary
providing investment advice for a fee to the trustees or the committee to implement.
FWM also renders non-discretionary investment management services to clients
relative to variable life/annuity products that they own and/or their individual
employer-sponsored retirement plans. In doing so, FWM will either direct or
recommend the allocation of client assets among the various mutual fund sub-divisions
that comprise the variable life/annuity product or the retirement plan. Client assets
shall be maintained at either the insurance company that issued the variable
life/annuity product or at the custodian designated by the sponsor of the client’s
retirement plan.
Investment Managers
In some situations, FWM recommends that its clients use independent Investment Managers
to manage their assets based upon their stated investment objectives. The terms and
conditions under which the client shall engage the Independent Manager are set forth in
separate written agreements between:
(1) the client and FWM; and
(2) the client and the designated Investment Managers.
FWM shall continue to render investment management services to the client by ongoing
monitoring and review of account performance of the assets being managed by the Firm and
the designated Independent Manager.
Factors that FWM considers when recommending an Independent Manager include the
client’s stated investment objectives, the manager’s investment style, performance,
reputation, financial strength, reporting, pricing, and research. When recommending or
selecting an Investment Manager for a client, FWM reviews information about the
Independent Manager such as its written disclosure statement and/or materials supplied by
the Investment Manager. Independent third parties may also be consulted for a description
of the Independent Manager’s investment strategies, past performance and risk results to
the extent available.
In addition to this Brochure as provided by FWM, clients will also receive the written
disclosure statement of the designated Independent Manager. Certain Independent
Managers may impose more restrictive account requirements and varying billing practices
than FWM. In such instances, FWM may alter its corresponding account requirements
and/or billing practices to accommodate those of the Independent Manager.
IRA Rollover Considerations
FWM provides, as part of its investment advisory services, recommendations for client to
withdraw the assets from an employer's retirement plan and roll the assets over to an
individual retirement account ("IRA") that FWM manages on the client’s behalf. If a client
elects to roll the assets to an IRA that is subject to FWM’S management, FWM charges an
asset-based fee as set forth in the agreement between the client and FWM. This practice
presents a conflict of interest because persons providing investment advice on FWM’s
behalf have an incentive to recommend a rollover to a client for the purpose of generating
fee-based compensation rather than solely based on the client’s needs. Clients are under
no obligation, contractually
or otherwise, to complete the rollover. Moreover, if the client
decides to complete the rollover, that client is under no obligation to have the assets in
an IRA managed by FWM.
Many employers permit former employees to keep their retirement assets in their
company plan. Also, current employees can sometimes move assets out of their company
plan before they retire or change jobs. In determining whether to complete the rollover
to an IRA, and to the extent the following options are available, clients should consider
the costs and benefits of each option:
An employee will typically have four options:
1. Leaving the funds in the employer's (former employer's) plan.
2. Moving the funds to a new employer's retirement plan.
3. Cashing out and taking a taxable distribution from the plan.
4. Rolling the funds into an IRA rollover account.
Each of these options has advantages and disadvantages and before making a change
FWM encourages clients to speak with their CPA and/or tax attorney.
Clients who are considering rolling over retirement funds to an IRA for FWM to manage,
here are a few points to consider beforehand:
1. Determine whether the investment options in the employer's retirement plan address
your needs or whether you might want to consider other types of investments.
a. Employer retirement plans generally have a more limited investment menu
than IRAs.
b. Employer retirement plans may have unique investment options not available
to the public such as employer securities, or previously closed funds.
2. Your current plan may have lower fees than FWM’s fees.
a. If you are interested in investing only in mutual funds, you should understand
the cost structure of the share classes available in your employer's retirement
plan and how the costs of those share classes compare with those available in
an IRA.
b. You should understand the various products and services you might take
advantage of at an IRA provider and the potential costs of those products and
services.
3. FWM’s strategy may have higher risk than the option(s) provided to you in your plan.
4. Consider whether your current plan also offers financial advice.
5. If you keep your assets titled in a 401k or retirement account, you could potentially
delay your required minimum distribution beyond age 72.
6. Your 401k may offer more liability protection than a rollover IRA; each state may vary.
Generally, federal law protects assets in qualified plans from creditors. Since 2005,
IRA assets have been generally protected from creditors in bankruptcies. However,
there can be some exceptions to the general rules so you should consult with an
attorney if you are concerned about protecting your retirement plan assets from
creditors.
7. You may be able to take out a loan on your 401k, but not from an IRA.
8. IRA assets can be accessed any time; however, distributions are subject to ordinary
income tax and may also be subject to a 10% early distribution penalty unless they
qualify for an exception such as disability, higher education expenses or the purchase
of a home.
9. If you own company stock in your plan, you may be able to liquidate those shares at a
lower capital gains tax rate.
10. Your plan may allow you to hire us as the manager and keep the assets titled in the
plan name.
It is important that you understand the differences between these types of accounts and
to decide whether a rollover is best for you. Prior to proceeding, if you have questions
contact your investment adviser representative, or call our main number as listed on the
cover page of this brochure.
IRA Rollover Recommendations
Effective December 20, 2021 (or such later date as the US Department of Labor (“DOL”)
Field Assistance Bulletin 2018-02 ceases to be in effect), for purposes of complying with
the DOL’s Prohibited Transaction Exemption 2020-02 (“PTE 2020-02”) where applicable,
we are providing the following acknowledgment to you.
When we provide investment advice to you regarding your retirement plan account or
individual retirement account, we are fiduciaries within the meaning of Title I of the
Employee Retirement Income Security Act and/or the Internal Revenue Code, as
applicable, which are laws governing retirement accounts. The way we make money
creates some conflicts with your interests, so we operate under a special rule that
requires us to act in your best interest and not put our interest ahead of yours. Under this
special rule’s provisions, we must:
• Meet a professional standard of care when making investment recommendations
(give prudent advice);
• Never put our financial interests ahead of yours when making recommendations
(give loyal advice);
• Avoid misleading statements about conflicts of interest, fees, and investments;
• Follow policies and procedures designed to ensure that we give advice that is in
your best interest;
• Charge no more than is reasonable for our services; and
• Give you basic information about conflicts of interest.
Financial Planning/Consulting:
In certain circumstances, FWM can provide additional financial planning and consulting
services. For these types of arrangements, clients are required to enter into a separate
written agreement with FWM which sets forth the terms and conditions of the engagement.
At the start of the financial planning process, FWM gathers information from the client
regarding his or her personal financial goals, objectives and risk tolerance. Investment
Advisor Representatives of FWM then create a Financial Plan to present to the client. Client
can engage FWM to implement the recommendations contained in the Financial Plan,
however, the decision to engage FWM for such services is at the sole discretion of the client.
Our Business Continuity Plan
FWM’s business continuity plan is designed to meet the needs of our clients and minimize
potential disruption in services during an emergency or disaster. The protocols and
capabilities within the plan include:
• Sufficient technical infrastructure and network capacity to support employees
working from home in specific areas, or companywide
• Secure, remote access for all employees
• Videoconference capability in place for employees
• Redundancy capabilities within each of our business units
