A. Firm Information
Hendershot Investments, Inc. (also referred to as “Hendershot Investments” or the “firm”) offers
personalized investment advisory services to individuals, pension and profit-sharing plans, trusts,
estates, charitable organizations and corporations or other business entities. Hendershot
Investments is strictly a fee-only investment management firm. The firm does not sell annuities,
insurance, stocks, bonds, mutual funds, limited partnerships or other commissioned products. No
commissions or finder’s fee in any form are accepted.
Hendershot Investments is subject to a stringent overarching fiduciary duty that requires
investment advisers to act in the best interests of their clients and to place the interests of clients
before their own. “Best interest” is defined as acting with the care, skill, prudence, and diligence
of a prudent person acting in a like capacity, and considering the aims, investment objectives, risk
tolerance, financial circumstances and needs of the investor without regard to the financial interest
or other interest of the individual financial adviser or their firm.
Hendershot Investments is a corporation formed under the laws of the Commonwealth of Virginia
and is registered with the Securities and Exchange Commission as an investment adviser. Ingrid
R. Hendershot, CFA and Charles L. Hendershot are the sole owners of Hendershot Investments.
Ingrid holds 55% of the outstanding shares and Charles holds the remaining 45% of the shares.
Hendershot Investments has been in continuous operations since June 1994.
B. Advisory Services Offered
Portfolio Management Services
Hendershot Investments provides discretionary portfolio management services where the
investment advice provided is custom tailored to meet the needs and investment objectives of the
client. Subject to any written guidelines or restrictions, which the client may provide, the firm is
granted discretion and authority to manage the account. Accordingly, Hendershot Investments is
authorized to perform various functions without further approval from the client. Such functions
include the determination of securities to be purchased/sold, the amount of securities to be
purchased/sold and the commission rates, if any, to be paid. Once the portfolio is constructed,
Hendershot Investments provides continuous supervision and re-optimization of the portfolio as
changes in market conditions and client circumstances may require.
Hendershot Investments shall never have custody of any client funds or securities, as the services
of a qualified independent custodian will be used for these asset management services. The client
always maintains asset control. Hendershot Investments places trades for clients under a limited
power of attorney.
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Hendershot Investments does not represent, warranty, or imply that the services or methods of
analysis employed by the firm can or will predict future results, successfully identify market tops
or bottoms, or insulate clients from losses due to market corrections or declines.
Financial Planning Services
Hendershot Investments offers financial planning services to clients in conjunction with the
portfolio management services. A financial plan may include a review of a client’s net worth
(including assets and liabilities), objectives, risk tolerance, risk capacity, cash flow and expenses,
income tax projections, review and analysis of fringe benefits, retirement forecast and probability
analysis, educational funding analysis, and estate planning analysis. At the end of the process,
the client will receive a report summarizing the plan and the various scenarios discussed with the
client. Additionally, the report will include recommendations for actions to be taken to improve
the probability of the plan’s successful achievement of the client’s objectives. The client decides
which plan scenario and recommendations to implement in the final plan and may utilize
Hendershot Investments to implement the plan. Hendershot Investments does not receive a
separate fee for this service for existing clients. Non-clients may request the service and will be
charged a fee as part of the Advisory Consulting Services described below. If the non-client
subsequently becomes a client within three months, the fee will be waived or refunded through a
credit on the first billing statement.
In performing its services, Hendershot Investments entrusts that the client will provide accurate
information, and Hendershot Investments will not be obligated to verify any information received
from the client or from the client’s other professionals. The client retains absolute discretion over
all implementation decisions and is free to accept or reject any recommendations from
Hendershot Investments. Clients are advised that changes in their financial situation or events
not projected in the Plan may have a significant impact on the Plan’s projected results. Therefore,
clients are advised to notify Hendershot Investments of any such change so that the impact on
the Plan can be evaluated. It remains the client’s responsibility to notify Hendershot Investments
of any change in their financial situation or investment objectives for the purpose of reviewing,
evaluating and revising previous plans and recommendations. Financial and retirement plans
should be updated regularly to reflect changes in the client’s goals or financial circumstances.
Advisory Consulting Services
Hendershot Investments offers consulting and research services, based on either a negotiated
fixed fee or the firm’s non-negotiable hourly rate of $200, where the firm will provide a professional
opinion on specific financial related areas. Clients will be invoiced for the time spent upon
completion of the services and the consulting fees will be due and payable by the client at that
time.
Under this arrangement, the client acknowledges that they only desire advice on the specific
financial area agreed upon to be reviewed and/or analyzed. Furthermore, client agrees to hold
Hendershot Investments harmless from any liability arising
out of any areas that Hendershot
Investments has not reviewed.
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Publication of a Newsletter
The firm offers an investment-related newsletter called “Hendershot Investments” to subscribers
on a quarterly basis. The information contained in the publication can include, but is not limited
to, investment strategies and/or information regarding investments. The subscriber is not
expected to act on any of the information made available in the newsletter. Subscribers should
contact their investment adviser representative or other financial services professional to discuss
the suitability of instituting any of the strategies and/or the inclusion of any investment in their
portfolio prior to implementation.
The newsletter is made available for a nonrefundable annual subscription fee of $50. However,
the firm will supply the newsletter at no additional charge to clients for whom it is providing portfolio
management services to provide them with a better understanding of the investments made for
their account. Transactions for clients occur prior to the publication of the newsletter. Subscribers
pay in advance of receiving the first issue. Payment may be made by check at either the time of
the subscription request or upon being invoiced by Hendershot Investments. The subscriber may
cancel the subscription at any time upon delivery of written notice to the firm. After the first year,
the subscriber will be sent a renewal notice at the end of their subscription period.
Retirement Plan Rollovers
Individual Retirement accounts, (401(K), 403(B), SEP-IRA, Roth IRA, or Traditional IRA)
represent significant investment assets for most clients or prospective clients and in the course
of providing services to you, you may ask us to review these accounts and give you
recommendations as to their management. When we review the accounts, 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. As a fiduciary, we
are required to act in your best interest and to put your interest above the interests of the firm or
any of its investment representatives.
When a client or prospective client leaves an employer, they typically have four options regarding
an existing retirement plan and may engage in one or a combination of these options. Typically,
the four options include:
1. Leaving the funds in your former employer’s plan, if permitted.
2. Moving the funds to a new employer’s plan, if permitted.
3. Cashing out and taking a taxable distribution from the plan, which could result in adverse
tax consequences.
4. Rolling the funds into an IRA rollover account.
Each of these options has advantages and disadvantages that we will consider in our review. In
addition to our review and recommendation, we encourage you to speak to your CPA or tax
attorney.
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Completing the review and recommendation creates a conflict of interest for Hendershot
Investments as recommending that you roll the assets over to an IRA account managed by the
firm would increase the assets in your account and the fees charged to you each quarter creating
an incentive to encourage the rollover of assets to an account managed by the firm. However,
as stated above, Hendershot Investments is acting as a fiduciary and required to put your best
interests first. Whether we recommend the rollover of the assets to an account managed by
Hendershot Investments or one of your other options, you are under no obligation to roll over any
retirement account to an account managed by Hendershot Investments, and you should make
the final decision concerning the account on the information presented and what is best for you
and your family.
C. Client Account Management
An initial meeting, which may be by telephone, is free of charge and is considered an exploratory
interview to determine the extent to which investment management may be beneficial to the client.
Prior to engaging Hendershot Investments to provide investment advisory services, the client is
required to complete a Confidential Client Information form. Based upon the input regarding the
client’s personal profile, investment goals and objectives, risk-tolerance, tax profile, liquidity needs
and financial position, Hendershot Investments will formulate a long-term asset allocation strategy
tailored to the client’s specific needs.
The asset allocation strategy will specify the percentage of assets to be invested between equity,
fixed-income securities and money market funds. Equities will generally be invested in a
diversified portfolio of high-quality companies and/or mutual funds and exchange-traded funds to
provide long-term growth while fixed-income investments will generally be laddered by maturity
in high-quality corporate or municipal bonds, FDIC-insured CD’s and/or U.S. Treasuries and/or
invested in bond mutual funds or exchange-traded funds to provide steady income and overall
diversification for the client’s account. Money market funds may be used to meet the client’s
liquidity needs. The client may impose restrictions on investing in certain securities or types of
securities.
Hendershot Investments provides continuous oversight of the client’s investments with all
investments monitored for performance relative to certain benchmarks.
D. Wrap Fee Programs
Hendershot Investments does not place client assets within any wrap fee programs. All
management services are performed by Hendershot Investments on behalf of clients.
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E. Regulatory Assets Under Management
As of December 31, 2023, Hendershot Investments managed the following assets:
Discretionary Assets $ 883,327,423
Non-Discretionary Assets $ 0
Total $ 883,327,423