Total Clarity Wealth Management, Inc. (hereinafter referred to as "Total Clarity") is a financial planning and investment advisory firm offering wealth management services customized to your individual needs.
4 A. Total Clarity is a corporation formed under the laws of the State of Illinois in 2006 and filed for investment adviser registration with the Securities and Exchange Commission in April of 2007. On March 1, 2015, David J. Hubbard (CRD number 1122248) became the majority shareholder of Total Clarity. Terrance (Terry) Murphy (CRD number 2191779) remains as President and Jeanne Tackett (CRD number 5257777) is the Chief Compliance Officer and the Vice President of Operations. Terry, Jeanne, and David are the principal owners of Total Clarity Wealth Management. David Hubbard entered the financial services industry in 1980. Terry has been in the financial services industry since 1991, and Jeanne became involved in the financial services industry beginning in 2006. Additional business information about Dave, Terry, Jeanne and the other Advisory Representatives who work with clients is disclosed on the Supplemental Brochures ADV Part 2B for each Advisory Representative.
4 B. Total Clarity offers the following advisory services, a complete description of each is described below:
•Asset Allocation and Management/Portfolio Monitoring Services
•Advisory Services to ERISA Account Plan Sponsors (Employer 401K programs)
•Financial Planning
•Special Projects and Retainer Programs Total Clarity's Advisory Representatives are independent contractors and engage in other financial businesses as further disclosed under Item 10, resulting in additional forms of compensation. Each Advisory Representative determines the advisory services and fees based on Total Clarity's fee structure disclosed in Item 5 below. Therefore, your Advisory Representative could charge more or less than another Total Clarity Advisory Representative for similar services. The fees charged are not correlated to education or experience.
Since our advisors are independent contractors with Total Clarity, they are able to retain your personal private information, such as your name, contact information, account registration and account numbers, even if they are no longer associated with us. Total Clarity also retains this information.
Asset Allocation and Management/Portfolio Monitoring Services When Total Clarity completes its analysis of your existing investments and overall financial circumstances, our Advisory Representative will determine an asset allocation customized to your financial goals, objectives and risk tolerance. One of the tools available for use by our Advisory Representatives are portfolio models provided by a third party through Schwab at no charge to Total Clarity or the client, although the third party could benefit from internal expenses charged by the holdings. Your Advisory Representative can use these models as a guide in managing your account, but he is responsible to make all decisions and complete all trades himself. Since our investment strategies and advice are based on each client's specific financial situation, the investment advice we provide to you may be different or conflicting with the advice we give to other clients regarding the same security or investment. No other party outside of Total Clarity will have the ability to trade assets within your account. We customize your portfolio allocation taking into consideration your limitations or restrictions, the market and economy at the time, your current financial status, and future goals and objectives. We offer five managed account programs: the Total Clarity Vision Account, which is a wrap fee program, the Total Clarity Value Account, the Total Clarity PreActive account, and the Total Clarity 4 Vision CB account, another wrap program, and the Value CB account. Both the Vision CB and the Value CB accounts have billing adjustments for all client cash deposits or withdrawals and limited reporting. The Total Clarity Vision and Vision CB Accounts wrap all of the transaction charges in with the advisory fee, whereas the Value, Value CB and PreActive Accounts charge an advisory fee and transaction charges are billed directly to the account. Please refer to the Total Clarity PreActive Brochure for additional information on these accounts which are only available to sophisticated investors and have higher risk and volatility than the Vision, Value, Vision CB and Value CB Accounts.
Your Advisory Representative will schedule a meeting with you and present the recommended portfolio allocation. Upon your approval, we will implement the initial portfolio allocation. After we implement the initial portfolio allocation, with your written approval as indicated in the Vision, Vision CB and Value CB, Value or PreActive Account Agreement, we will provide continuous and ongoing management of your account. By signing the custodian's Account Application you provide your Advisory Representative with discretionary approval for your account, he will determine the securities to be purchased and sold in the account and will alter the securities holdings from time to time, without prior consultation with you. Unless otherwise expressly requested by you, Total Clarity will manage the account and will make changes to the allocation as deemed appropriate by the firm and your Advisory Representative. You can discuss with your Advisory Representative your desire to be notified of any recommendations before buying or selling any securities in your account, but in order to trade at our custodians, the Advisory Representative must be given discretion on all accounts. All clients will be sent, by the custodian of your account, either by mail or electronically, confirmations of any trades done in your account. Depending on your specific goals, objectives and market circumstances, we will generally hold positions in your account for a long term, even more than a year, or actively trade some securities held in your account for periods of 30 days or less.
Our Advisory Representatives primarily use open-ended mutual funds, exchange traded funds (ETFs) and stocks, including no-load and load waived mutual funds purchased at net asset value (NAV). Registered investment company securities such as mutual funds, and variable products offer the securities in various share classes. Different share classes are priced differently and share classes other than institutional share classes will involve higher internal costs that over time will cost you more.
Institutional share classes often have higher trading costs though the internal expenses are lower. An Advisory Representative needs to consider the amount being invested and the length of anticipated holding to make a decision as to the share class most suitable to the client. Please read the disclosures under Item 10 below for important information about the advice and recommendations offered by advisory representatives and registered representatives. Representatives will select the lowest share class funds available and appropriate to the situation. However, in selecting the lowest share class, trading costs are sometimes higher. Selecting the lowest share class appropriate to the situation does not imply the lowest cost share class but means what the Representative deems lowest cost for the situation. Representatives consider the anticipated holding period, cost structure, and administrative and transaction costs associated with selecting a share class. However, there is no way to predict the future and there could be occasions where a holding is liquidated sooner or held longer resulting in higher costs to the client. Additional information about share classes can be found in an Investor Alert issued by the Securities and Exchange Commission at https://www.investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-bulletin-mutual-fund- classes and https://www.investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-bulletin- mutual-fund-classes. Additionally, the SEC and FINRA provides investor information at www.sec.gov and www.finra.org. However, managed accounts are not exclusively limited to mutual funds and stocks and your account could include one or more of the following types of securities - bonds, certificates of deposits, government securities, stock options (such as covered calls and long puts), Unit Investments Trusts (UITs), money markets and variable annuities. In the case of UITs, many are not purchased into the 5 account at NAV; they are purchased at the public offering price (NAV plus maximum sales charge). Therefore, these products will have higher internal expenses. PreActive accounts at times will also hold leveraged and inverse ETFs and margin accounts will give the Advisory Representative the ability to short stocks. Please refer to disclosures in Item 8 regarding risks associated with leveraged and inverse ETFs. Some Advisory Representatives also invest in "Alternative Investment" products, such as Real Estate Investment Trusts (REITs) and private equities. These are held in the Account as a courtesy to the client(s) and are not part of any wrap fee program. Refer to additional disclosure about alternative investments and the cost and compensation structure and conflicts of interest in Item 5 below.
Transactions in the account, account reallocations and rebalancing may trigger a taxable event, with the exception of IRA accounts, 403(b) accounts and other qualified retirement accounts.
After making the initial asset allocation recommendation, we will monitor your account on a periodic basis and make investment recommendations, and will provide continuous and ongoing management of the assets.
As further described below, Total Clarity has entered into relationships to offer you brokerage and custodial services through LPL Financial (LPL) an unaffiliated SEC registered Broker/Dealer and Member FINRA/SIPC as well as with Schwab Institutional, a division of Charles Schwab & Co., Inc. ("Schwab") an unaffiliated SEC registered Broker/Dealer and FINRA member. For accounts held at Schwab, LPL does not provide brokerage services. Additionally, 529 type accounts with Total Clarity are held directly at the mutual fund company and variable annuities are held at the annuity company. There is no affiliation between Total Clarity and LPL or Schwab.
If you select another brokerage firm for custodial and/or brokerage services you will not be able to receive on-going asset management services from Total Clarity. Many of our Advisory Representatives are also registered representatives with LPL. These Advisory Representatives must adhere to FINRA rules and regulations and the policies and procedures of LPL Financial. FINRA rules prohibit our Advisory Representatives from conducting transactions at a broker/dealer for which approval has not been obtained from LPL. Additionally, certain of our Advisory Representatives are also Advisory Representatives with LPL, but being registered with two RIAs is only allowed under limited exceptions.Schwab has been approved to offer services which include custody of securities, trade execution, and clearance and settlement of transactions to Total Clarity. Total Clarity receives some benefits from Schwab through its participation in the Schwab programs but there is no direct link between Total Clarity's participation in the program and the advice it gives to its clients.
You can deposit assets on which a commission was previously paid, including mutual funds on which a sales charge was paid, to a fee-based account. However, Total Clarity generally does not permit securities purchased on a commission basis to be transferred into a fee-based account for a minimum 2 year period for A shares and 4 years for B shares after the securities were purchased if your Total Clarity Advisory Representative received the commission on these mutual funds. These restrictions are not required if the securities were originally purchased by an outside firm and representative, and are being transferred into a Total Clarity Vision, Vision CB, Value CB, Value Account or PreActive Account under the management of our Advisory Representative. A shares or other 12b-1 paying share classes will be converted to advisory share classes within 30 days of transfer into a Total Clarity account held at Schwab or LPL Financial unless a comparable advisory share class is not available.
Total Clarity does not allow 'C' shares to be held within any of its programs. If they are transferred in from another account, they will be sold without a commission, if possible, as soon as they are brought into the Total Clarity account. The purpose of this prohibition is to prevent you from paying duplicative or extra charges. If the account would be charged a Contingent Deferred Sales Charge (CDSC) when 6 the C shares were sold, the Advisory Representative must disclose this to you and receive your permission to complete the sale or he will cover this charge. If necessary, the C shares will be held in the account until the surrender period has passed and they can be sold without this charge. These C shares will not be included in the account value for fee calculation purposes.
Advisory Services to Employer 401(k) Plan Sponsors Total Clarity offers on-going advisory services for Employer 401(k) Plan Sponsors. These services include providing recommendations of the asset classes and investment choices to be offered within the 401(k) plan and a review of the investment choices at least once a year or when requested by the Plan Sponsor. Total Clarity will also provide non-fiduciary services for these programs including working with the TPA of the plan, assisting with rollovers due to termination or retirement of Plan participants and for new participants and providing educational seminars to the plan participants at least once a year if requested by the plan sponsor(s) (educational seminars will be of general topics such as how the Plan works, Roth conversions, 529s and economic updates, but we will not be providing any specific investment advice at these seminars).
Neither Total Clarity nor the IAR will initiate trades, have custody of any Plan assets, recommend individual stocks, bonds, or mutual funds within the Plan to the Plan Participants, nor design or write Plan Documents. Please see form TCWM_348, ERISA Advisory Services Agreement for more information.
LPL's Strategic Market Solution Program Clients in the Strategic Market Solution Program (SMS) may select Total Clarity to provide the advisory and consulting services described below through one of their Advisory Representatives. Please refer to LPL's Retirement Plan Programs Brochure for complete details about the SMS program If the Plan is subject to ERISA, LPL will be a "fiduciary" and serve as "investment manager" (as that term is defined in Section 3(38) of ERISA) in connection with the Fiduciary Selection Services. None of the services offered under SMS other than the Fiduciary Selection Services will constitute "investment advice" under 3(21)(A)(ii) of ERISA, or otherwise cause LPL or Advisory Representatives or Total Clarity, as applicable, to be deemed a fiduciary. In addition to the Fiduciary Selection Services, the Plan Sponsor may

also select from a number of non-fiduciary consulting services available under SMS that are provided by the Advisory Representatives or Total Clarity, as applicable. These consulting services may include, but are not limited to: general education, and support regarding the Plan and the investment options selected by Plan Sponsor; assistance regarding the selection of, and ongoing relationship management for, record keepers and other third-party vendors; Plan participant enrollment support; and participant-level education regarding investment in the Plan. These consulting services do not include any individualized investment advice to the Plan Sponsor or Plan participants with respect to Plan assets, and LPL and the Advisory Representatives or Total Clarity, as applicable, do not act as fiduciaries under ERISA in providing such consulting services. Retirement Plan Participant Account Management with Discretion We use a third-party platform to facilitate management of held-away assets such as 401(k) participant accounts with discretion. These held-away assets are not maintained at one of our approved custodians but rather the accounts are held at the custodian selected by the Plan trustees. The platform allows us to avoid having 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 their account(s) to the platform. Once Client account(s) are connected to the platform, Total Clarity will review the current account allocations. When deemed necessary, Adviser will rebalance the 7 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, reduce loss during difficult markets, and manage internal fees that harm account performance. Client accounts will be reviewed at least quarterly and allocation changes will be made as deemed necessary by Total Clarity.
For held-away acounts, Client agrees to the Pontera End User Terms and Conditions and Privacy Policy. Client agrees to promptly address any requests to update its login credentials when requested by the Pontera system. In the event of any delay by the Client to update its login credentials, Client acknowledges that the Adviser will not have access to view or manage the Client's Held Away Account(s), which may result in investment losses or inadvertently incorrect valuations being used in the billing process. Client acknowledges and agrees that Total Clarity and the IAR are not responsible for any losses arising from the Client's delays in updating its login credentials through the Pontera system and agrees that Total Clarity and the IAR are under no obligation to credit any fees for valuations made in good faith during periods when they did not have access to any held-away account in calculating its fees. Third-Party Created Model Portfolios Total Clarity has entered into an agreement with a service provider which provides us with access to certain model portfolios as well as trading instructions. These services allow us to provide model portfolios comprised of stocks and exchange-traded fund products but other products such as mutual funds are also available to us. Total Clarity does not pay the provider for these services and the advisory fees you pay are not increased because we use these services. These services allow us to provide our clients with operational and advisory efficiencies which may create a conflict of interest since the models use mutual funds and exchange-traded funds that may pay fees to the service provider. It is possible that there are other exchange-traded funds and mutual funds not included in these models that may be in our clients' best interest. In all cases we strive to recommend only products and services that we believe are in your best interest and have the lowest cost share class. We have the ability to make substitutions to the investment selections listed in the models and to deviate from the trading instructions provided to us. Accounts invested in these investment models that include mutual funds may be subject to short-term redemption fees imposed by custodians and/or the mutual fund sponsor. Total Clarity is not responsible for these short-term redemption fees. They are the responsibility of the client. These models are available for use with qualified and non-qualified accounts. Advisory Representatives will pay approximately 18 to 22 basis points (0.18% to 0.22%) to Total Clarity from their portion of the advisory fee you pay to cover our administration and operational costs. Clients are not billed directly for the use of these models. Financial Planning Services Total Clarity offers financial, insurance, and retirement planning services and renders advice on estate and tax matters within the context of the financial planning process. Our Advisory Representative will schedule a meeting with you to gather your financial information and history and to discuss your retirement and financial goals, investment objectives, investment horizon, financial needs, cash flow analysis, cost of living needs, education needs, savings tendencies, and other applicable financial information in order to provide the planning services you request. Total Clarity will prepare a written financial plan and present the analysis of your financial circumstances along with our recommendations for steps to be taken to assist you as you work toward your financial goals.
8 The Plan is based on your financial situation at the time and on the financial information you disclosed to our Advisory Representative. You need to be aware that certain assumptions will be made with respect to interest and inflation rates, as well as the use of past trends and performance of the market and economy. However, past performance is in no way an indication of future performance. Total Clarity cannot offer any guarantees or promises that your financial goals and objectives will be met. Further, you must continue to review the plan and update the plan based upon changes in your financial situation, goals, or objectives or changes in the economy. If your financial status, investment goals or objectives change, you must notify Total Clarity promptly of the changes. Depending on the services you request, the advice offered by Total Clarity is limited and is not comprehensive in nature. Based on your specific needs or situation, you should seek the services of o anning services if insurance products are purchased, you open an advisory account with Total Clarity or implementation occurs through LPL Financial.
Donor Advised Funds A Schwab Charitable™ donor-advised fund account is a simple, tax-smart investment solution for charitable giving. You just set up an account with Schwab Charitable and contribute cash, securities, or appreciated assets. You'll be eligible for a current-year tax deduction and can be more strategic about your giving decisions. As a tax-smart way to manage giving, you'll be able to contribute cash, appreciated assets, or investments that have been held for more than a year without paying capital gains taxes and contribute to your account and grant to charity at any time, not just at year-end.
Administrative fees, investment fees, and account minimums vary depending on the account and how it's invested. First, choose which type of account best supports your philanthropic goals and needs:
•There is no minimum contribution requirement to open a Schwab Charitable core account.
•Once you make an irrevocable contribution, you can give to charities immediately or you may invest your charitable assets for potential tax-free growth.
•A professionally managed account allows investors with $100,000 or more to work with Total Clarity to manage the investments. Additional details about the program, including the options, requirements, fees and costs are included in the Schwab Charitable account agreement and other documents provided by Schwab. Information on the fees charged by Total Clarity are included under Item 5, Fees and Compensation.
Special Projects & Retainer Programs In addition to the financial planning services indicated above, Total Clarity can provide guidance and assistance for special projects as a one time project or on an on-going basis. If it is on an on-going basis it is a Total Clarity Retainer Program. These projects include services such as providing advice on assets held outside of Total Clarity or doing an Asset Review, which is a review of all of your assets including corporate retirement plans, family trusts, etc. They can also include a review of all of your estate planning, such as beneficiaries on all of your accounts wherever they are held, or a review of your Social Security benefits and timing. These projects are dependent on the needs of each client.
A special project can be a one-time service, or be provided on an ongoing basis. If it is on an ongoing basis, it will be a retainer program and your fee will be invoiced monthly or quarterly. It can be invoiced with your other Total Clarity advisory accounts and be deducted from an existing account you have with Total Clarity (upon your written authorization) or it can be invoiced separately and paid by ACH, credit card or check. 4 C. We tailor the advisory services we offer to your individual needs. You are able to request that your Advisory Representative add reasonable trading restrictions ("Reasonable Restrictions") to your advisory account at any time during the management of your account. Your Advisory Representative or Total Clarity has the option to decline or terminate the account if we feel your elected Reasonable 9 Restrictions are too prohibitive, and we do not feel the account can be managed within our program. Restrictions imposed on management of an account, even those considered reasonable, will affect your account performance and may mean the performance in the account is different than the performance of other similarly managed accounts.
We will ask you to complete an Account Application, Investment Profile Questionnaire and a Risk Profile Questionnaire to assist us with obtaining information about your financial situation and history. Additionally, one or more of our Advisory Representatives will meet with you and conduct an interview and data gathering session to continue the due diligence process. The information gathered by Total Clarity will assist the firm in providing you with the requested services and customize the services to your financial situation.
Depending on the services you have requested, we will gather various financial information and history from you including, but not limited to:
•Retirement and financial goals
•Investment objectives
•Investment time horizon
•Existing portfolio statements, including retirement account information
•Financial needs
•Education savings needs
•Cash flow analysis
•Cost of living needs
•Savings tendencies
•Other applicable financial information required by our Advisory Representative in order to provide the investment advisory services you have requested. 4 D. Total Clarity's Vision and Vision CB Accounts are wrap fee programs. Our Advisory Representatives do not manage the assets in these programs any differently than the assets in the Total Clarity Value and Value CB accounts. PreActive accounts are managed using a much more active trading strategy and at times using leverage and inverse ETFs which are not allowed in Vision, Vision CB ,Value CB and Value accounts. An additional strategy in the PreActive accounts includes using options and shorting stocks, when appropriate and suitable, for clients.
Total Clarity will receive a portion of the advisory/wrap fee for our services. For some of our Advisory Representatives, an additional portion of the net advisory fee is paid to the Advisory Representative's supervisor and/or branch manager, and the remainder of the fee is paid to your Advisory Representative.
The Vision, Vision CB, Value CB, Value and PreActive Account Agreements may be terminated by either party upon receipt of a written notice of termination. Termination by a Client is effective upon receipt of the notice by Total Clarity unless a specific date is requested in the notice. You may terminate the agreement without penalty within 5 days of signing the account agreement. If you terminate an account(s) within the first calendar year after opening the account(s), you will be charged a $200 administrative fee which will be deducted from any refund of fees. This fee can be waived at Total Clarity's sole discretion. This fee is not charged on accounts that are closed due to a transfer of the assets to another Total Clarity account. After one calendar year, if an account is terminated, Total Clarity will refund any advisory fees charged in advanced based on a pro-rata calculation based on the value of the account at the beginning of the quarter and the number of days the account was open during the quarter. If a flat fee has been negotiated (see Item 5), we will also refund any of those fees, paid in advance, on a pro-rated basis. Upon termination, early redemption fees or similar fees for mutual funds or other products held in the account are applicable as described in the fund's 10 prospectus. Some broker-dealers will not accept certain assets that are held in your account. Total Clarity will use reasonable efforts to follow your instructions regarding the disposition of the assets in your account to the extent permitted by law and policies of the firm.
Please Note: Total Clarity will discontinue billing after the date specified in the termination notice even if the assets are still in the account, but Total Clarity and our Advisory Representatives have no fiduciary responsibilities once the Total Clarity Agreement has been terminated. 4 E. As of December 31, 2023, we have approximately $454,7000,000 of client assets under our discretionary management and approximately $2,300,000 of non-discretionary client assets under management. IRA Rollover Recommendations 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. We benefit financially from the rollover of your assets from a retirement account to an account that we manage or provide investment advice, because the assets increase our assets under management and, in turn, our advisory fees. As a fiduciary, we only recommend a rollover when we believe it is in your best interest. General Information The investment recommendations and advice offered by Total Clarity and your Advisory Representative are not legal advice or accounting advice. You should coordinate and discuss the impact of the financial advice we provide with your attorney and/or accountant. Total Clarity's primary goal is to help our clients identify and pursue their financial goals, thereby enhancing the overall quality of their lives.
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