IFP Advisors, LLC, doing business as Independent Financial Partners (“IFP”), has been a Registered Investment Adviser (“RIA”) with the Securities and Exchange Commission (“SEC”) since 2008. IFP’s direct, majority owner is IFP Group, LLC, and indirect owner, through IFP Group, is WKW Enterprises. Generally In general terms, IFP’s service models can be depicted as follows: IFP conducts its investment advisory business through a network of independent Investment Adviser Representatives (“IARs”) who operate offices located throughout the United States. While we oversee the way your accounts are established and the transactions in them, we do not dictate the products, platforms, or services your IAR recommends to you within the scope of available options IFP makes available to your IAR. Some IARs will operate under their own business name(s) or Doing/Business/As (“DBA”) name(s). Such DBA names may be registered companies or registered trades names in their respective States, but such entities are not registered to conduct investment advisory services themselves; investment advisory services are provided through IFP. The business name(s) and DBA name(s) used by the IARs are separate from IFP. The purpose of using a name other than IFP is for your IAR to create a brand that is specific to the IAR and/or office from which the IAR or group of IARs operate. Such IARs also offer and provide other services through their DBA name(s), which are outside the scope of services provided by IFP. However, as stated above, all investment advisory services conducted by IARs are provided through IFP. IFP offers a variety of investment advisory platforms, custodians, and brokers, including our own affiliated broker-dealer, IFP Securities, LLC, Member FINRA/SIPC/MSRB, doing business as Independent Financial Partners. Many of our IARs are also dually registered as Registered Representatives (“RRs”) and solicit, offer and sell securities through IFP Securities, an affiliated, introducing broker-dealer whose accounts are held at Pershing, LLC (“Pershing”). Please refer to the Brokerage Practices section for additional information regarding our broker-dealer affiliate. If you wish to contract with IFP and IAR for asset management services, you are required to use only those broker-dealers and custodians approved by IFP. IFP recommends broker-dealers and custodians based on relationships that have been established. As stated elsewhere herein, IFP has an affiliated broker-dealer, IFP Securities. As such, IFP uses IFP Securities for broker-dealer services, which uses Pershing, LLC (“Pershing”) to clear and settle transactions, hold such securities positions in custody and other account assets, including cash. For accounts networked by IFP apart from those of its Rep as Portfolio Manager Rep as Non-Discretionary Advisor IFP Centralized Asset Management/Models IFP as Sub-Advisor & Co-Advisor Third Party Asset Managers ("TPAMs") Financial Planning, Generally Pension and Retirement Planning & Consultancy 5 | P a g e affiliated broker/dealer, IFP has direct relationships with Qualified Custodians, consisting of Schwab, Pershing Advisory Services (“PAS”), Fidelity Institutional Wealth Services (“FIWS”), TD Ameritrade Institutional (“TD”) and SEI1, which provide brokerage execution through their own broker/dealer(s). IFP enables its IARs to utilize many different avenues to provide personalized investment advisory services to you. These services include financial planning and consulting services, referrals to third-party asset managers, investment advice/management by the IAR and investment advice/management by IFP personnel in the Home Office. IFP’s recommendations and services are provided based on your specific needs. Investment strategies and philosophies differ among IARs who are responsible for determining and implementing their own investment advice under the supervisory controls of IFP. You and your IAR will discuss your financial goals, investment objectives, investment experience and time horizon, among other factors specific to your financial situation. You are given the ability to impose written restrictions on your accounts, including specific investment selections and sectors. When you impose these restrictions, IFP will make best efforts to honor those restrictions. For this reason, it is important you understand that IFP performs advisory and/or brokerage services including investment reporting for various clients, and that we give advice or take actions for clients other than you that differ from the advice given to you. Conflicts of Interest Regarding Certain Compensation Methodologies, Multiple Services and Platform Decisions IARs can potentially be acting in all three capacities when soliciting, offering, buying, selling and exchanging investment products, investment advisory services and/or insurance products. For avoidance of doubt, those three capacities are as a registered representative of a securities broker (also known as an RR), an investment adviser representative of a registered investment adviser (also known as an IAR), and an agent of an insurance company (also known as an “insurance agent”). There is a conflict of interest when IARs solicit, offer and sell securities and insurance products for which you would pay a commission, while also soliciting, offering and selling investment advisory services and managing the assets in your accounts and charging a separate investment advisory fee. IFP addresses this conflict of interest by requiring the IAR to disclose to you at the time a brokerage account is opened through IFP Securities the nature of the transaction or relationship, his or her role as an IFP Securities RR, and any compensation including commissions that are paid by you and/or received by the IAR. Moreover, it is the general policy of IFP to refrain from a charging a commission on accounts where the IAR is charging an investment advisory fee for the same period of time. In situations where clients want comprehensive financial planning2, or ongoing advice covering securities originally sold in brokerage transactions, IFP's policy, absent a compelling rationale to the contrary, prohibits charging an investment advisory fee for assets sold in a brokerage transactions, unless (i) a period of time passes until the investment advisory fee that would have been charged exceeds the commission actually charged, and there is a sound basis to commence the investment advice/management of such assets at that time (ii) such products are not available on an advisory platform on an commission-free, advisory share class basis, are better for the client's investment objectives and in the client's best interest, are liquid and the client also seeks continuous and regular investment advice/management. Wherever possible, in situations where assets purchased in brokerage transaction for a commission through IFP Securities, such assets should either be excluded from investment advisory billing or the investment advisory fee should be reduced to offset any commission that was otherwise unavoidable for the particular security. You are under no obligation to (i) engage the services of any IAR or other individual investment professional recommended by IFP, (ii) engage the services of any 3rd party investment adviser/manager recommended by IFP or (iii) accept the advice to buy, sell or exchange of any particular product and implementation decisions in situations where 1 SEI Private Trust Company, with its affiliate of SEI Investments (Distribution) Company Co. 2 This reference to comprehensive financial planning may involve ongoing account monitoring services or may simply refer to a discrete, single plan, or a revisitation of a plan periodically (e.g., annually). If ongoing account monitoring services are provided in conjunction with a comprehensive financial plan, then such services should be priced based upon a % of assets under management/AUM, for which ongoing advisory/management services would be provided. Without a specification of ongoing account monitoring services, financial planning services normally are priced based upon a flat fee and for which there would not be ongoing advisory/management services covering the accounts. In other words, financial plans priced based upon a flat fee and for which there would not be continuous and regular advisory/management services could provide such limited advisory services that cover securities (sold by IFP Securities) without having to wait until a commissioned product sold by IFP Securities "ages" for a period of time such that the commission equates to the proposed advisory fee for the same time period, or otherwise have to comply with considerations in point above concerning platform availability. 6 | P a g e the IAR/IFP only has non-discretionary authority over the account. You may vest discretionary authority for trading decisions with your IAR or retain such authority yourself. If you retain discretion over implementation decisions, you will be the one to accept or reject recommendation from IFP or its IAR. In situations where you have provided the IAR/IFP with discretionary investment management authority, you may revoke that authority at any time, but unless or until revoked, your IAR retains the authority to make trading decisions in your account without discussing them with you beforehand. Changes in Your Finances and Investment Objectives It is your responsibility to promptly notify us if there is a change in your financial situation or investment objectives. You are not obligated to use IFP for securities transactions or individual insurance provider products. Other Additional descriptive information is provided under Fees and Compensation so that you and prospective clients can review the services and description of fees more thoroughly. Descriptions for some of our investment advisory and management services is contained in the following pages and section of this document, as well as in the respective program’s Wrap Fee Disclosure Brochure of IFP and its 3rd Party Asset Managers/TPAMs. Some IFP IARs will provide financial planning services or platforms that focus on your specific needs and concerns. These services can be (i) comprehensive in nature and focus on your overall financial situation, risk, goals, and objectives, or (ii) modular in nature, focusing on specific areas of concern that you have such as asset allocation, college planning, estate planning, etc. Financial Planning consists of:
• Helping you determine and set your long-term financial goals, through investments, tax planning, asset allocation, risk management, retirement planning, estate planning and other areas. The role of a financial planner is to identify your investment and planning objectives and to assess and/or provide effective/optimal strategies and recommendations to achieve your objectives.
• In this sense, we offer: o Comprehensive and segmented (modularized) financial plans and also through specific recommendations. Comprehensive planning services focus on a client’s overall financial situation; o Modular planning services and consultations focus on specific areas of client concern, like retirement planning or education planning; and o Recommendations can be for asset allocation advice to specific accounts held away from an IAR (e.g., 401(k). Your IAR will collect a variety of information and documentation from you that is necessary to perform the requested services. Your IAR will gather the information in order to review your current financial condition, to assist you in determining your attitude toward risk, and to identify your financial goals, objectives and challenges. Financial data that is gathered and reviewed include, but is not necessarily limited to, statements and account data from banks, broker- dealers, and mutual funds, as well as tax returns and insurance policies. Depending on the level and the scope of the financial planning engagement, your IAR will also review wills and trusts for financial considerations (IFP may not and does not provide legal services). Your IAR will rely on the information provided by you. Therefore, it is important the information you provide is complete and accurate. Neither IFP nor your IAR are responsible for verifying the information you provide. In addition, if authorized by you, your IAR will gather information or documentation from your other professionals and are expressly authorized to rely on that information provided. We urge you to work closely with your attorney, accountant, or other professionals regarding the tax/financial and legal aspects of your personal situation. FINANCIAL PLANNING SERVICES (PLANS AND CONSULTATIONS) 7 | P a g e Your IAR will discuss his or her recommendations with you as well as steps to be taken in order to implement those recommendations. It is your responsibility to notify your IAR if there are changes in your financial situation or investment objectives. You should notify your IAR of changes so that they can work with you to determine if the changes will affect the advice previously provided. Together, with your IAR, you can determine if you wish to engage him or her to review, evaluate, and revise the previous recommendations provided. Although financial planning services are provided with the intention that you will implement the recommendations, you are not obligated to do so. You retain discretion over implementing decisions relating to financial planning services and are free to accept or reject any recommendation from your IAR. You have the option to purchase investment products that are recommended through other brokers or agents that are not affiliated with IFP. To the extent you would like your IAR to implement transactions on your behalf, you will need to enter into a separate contract with your IAR for the appropriate service, including contracts to establish (i) investment advisory/management services involving discretionary or non-discretionary continuous and regular account oversight and/or implementation services for an investment advisory fee (typically a % of assets in the account subject to advice or “under management”)3 or (ii) a brokerage account to be used to implement transactions in exchange for a commission-based compensation arrangement (without an investment advisory fee). With respect to the latter, a conflict will exist between the interests of IFP, your IAR and your interests because if you choose to implement the advice of your IAR through their separate capacity as a RR, your IAR will earn commissions in their capacity as a RR (or additional advisory fees financial planning engagement that result in entering into an ongoing investment advisory arrangement) in addition to the fees charged for financial planning services. The fees for these types of services are negotiated between you and your IAR and depend on the nature of the financial planning services provided, as well as the time and the complexity of your circumstances and our services. All fees are agreed upon prior to entering into the Financial Planning and Consultancy Agreement signed by you. Fee arrangements are documented on the Financial Planning and Consultancy Agreement (see Item 5 – Fees below for a specification of the ranges of fees4. These services do not involve actively managing your accounts. Depending on the specific planning service, if other than comprehensive financial planning, such plans may not consider all important financial issues of the client; clients and FP will agree of the scope of each financial plan. ADVISOR MANAGED Within IFP, portfolio management is handled in one of two ways. First, FP serves as the portfolio manager. Second, IFPAM serves as the portfolio manager. To cover transactions occurring within accounts, each custodian has asset-based pricing as an alternative, and some of them have both asset-based pricing and transaction-based pricing. In situations where the custodian offers asset-based pricing, then the IAR has the ability to select asset-based pricing in order to pay for the services provided by the custodian, including account and transaction fees. Whether IFPAM or the IAR outside of our Home Office serves as the portfolio manager, then the IAR decides whether the client account should be priced whereby ticket fees and other transaction costs are borne by the Client or wrapped into 1 fee, inclusive of IFP’s fee, which would result in the IAR absorbing any transaction costs incurred. In the case where 3 The scope of the financial planning services is defined in the Financial Planning & Consultancy Agreement. Unless the Financial Planning & Consultancy Agreement specifies that the planning and investment advisory services are continuous and regular, ongoing account-related services, any duties, fiduciary other otherwise, shall terminate with the delivery or completion of the financial plan, unless a separate investment advisory contract is signed that specifies such ongoing services shall commence or remain in the scope of services provided by IFP/IAR. Also, comprehensive financial planning may involve ongoing account monitoring services or may simply refer to a discrete, single plan, or a revisitation of a plan periodically (e.g., annually). If ongoing account monitoring services are provided in conjunction with a comprehensive financial plan, then such services should be priced based upon a % of assets under management/AUM, for which ongoing advisory/management services would be provided. Without a specification of ongoing account monitoring services, financial planning services normally are priced based upon a flat fee and for which there would not be ongoing advisory/management services covering the accounts. 4 ITEM 5, Fees and Compensation, "Financial Planning and Consulting Fees." INVESTMENT MANAGEMENT 8 | P a g e custodians such as Fidelity and Pershing Advisory Solutions utilizes an asset-based pricing model, it may cover only a portion of their securities (e.g., asset-based pricing for stocks and ETFs), but may retain transaction-based pricing for mutual funds, unless the mutual funds are structured as NTFs (non-transaction costs mutual funds). In an Advisor Managed Account, sometimes known as "Rep as Portfolio Manager" ("RPM"), your IAR will be responsible for managing your account consistent with your defined objectives and risk tolerance and will assist you to develop a personalized asset allocation program and customized portfolio. IFP does not offer proprietary products. IFP’s investment recommendations are not limited to any specific product or service offered through a broker/dealer or insurance company. Your portfolio holdings can include, but are not limited to, securities listed on the stock market exchanges; corporate and municipal bonds; Mutual Funds; Unit Investment Trusts (“UITs”); Exchange Traded Funds (“ETFs”); Variable Annuities (“VAs”) and/or the sub-accounts within a VA; Variable Universal Life insurance (“VUL”); alternative products, including project-specified private placements, Real Estate Investment Trusts ("REITs”), Direct Participation Programs (“DPPs”) or Business Development Companies (“BDCs”); equity options; warrants; United States government and government agency securities; certificates of deposit and commercial paper. Depending upon the issuer and how it structures the product, some investment products, (e.g., REITs, DPPs and BDCs) historically have been more often designed for the brokerage versus investment advisory channel, although platform availability for these products is expanding. If the product was structured and sold as a brokerage product, which means a commission was charged, it generally is not eligible to be held in an Advisor Managed Account, unless it is excluded from billing. In an Advisor Managed Account, your IAR typically will diversify your holdings across various asset classes unless your objective is to invest in specific assets. The percentage weightings within the asset classes will be based on your risk profile, investment objectives, individual preferences and availability. You will have the opportunity to meet with your IAR to periodically review the assets in your Advisor Managed Account. We recommend you and your IAR meet on a regular basis to review your financial situation, investment objectives and current holdings, and you should let your IAR know about any changes in your circumstances in the meantime. IFP does not pool your assets with those of other customers. Models are managed as SMAs, and IAR manage accounts individually, not as a pool of investor capital. IFP provides continuous and regular supervisory services over what are known as separately managed account. Among other things, the advice and management of your account are tailored to your individual and specific needs and objectives. Also, you retain the right to add or withdraw securities or cash, pledge securities, and vote securities. You will receive periodic statements directly from the qualified custodian. We offer both discretionary and non-discretionary portfolio management and advisory services. Thus, the underlying accounts subject to ongoing account monitoring and supervisory services are handled on either a discretionary trading basis or non-discretionary trading basis as agreed upon between you and your IAR. In order to have trading authorization on your account, you must grant your IAR limited power of attorney over your account. This can be done through the standard IFP investment advisory agreement. If you want your IAR to have discretion over the timing and amount of securities purchased or sold in your account ("Limited Trading Authorization"), you will be asked to sign an agreement providing such authorization. Such an agreement is referred to several ways, including Limited Power of Attorney, Letter of Authorization or with the investment advisory agreement itself, with specific language to refer to authorizing your IAR to place orders for your account without contacting you in advance. Such Limited Trading Authorization places more power and trust with your IAR, and if you proceed in that way, you should be comfortable with the investment management approach and plan, and understand that the implementation of that approach/plan is within the control of your IAR. If you do not want your IAR to have discretion, your account will be non-discretionary and your IAR will need to speak with you directly to obtain authorization before placing trades. You should understand that any delay in obtaining your authorization to execute a recommendation could result in less favorable transaction terms, including a higher security transaction execution price depending on prevailing market conditions. Some IARs will utilize an automated investment program through which you are invested in a range of investment strategies constructed by your IAR. These types of programs assist your IAR in determining your investment objectives and risk tolerances in order to select an appropriate investment strategy and portfolio. Additionally, these programs 9 | P a g e assist your IAR in managing your portfolio on an ongoing basis through automatic rebalancing and tax-loss harvesting (if applicable). However, this could lead to less frequent contact with your IAR. IFP ASSET MANAGEMENT IFP Asset Management ("IFPAM") offers a variety of model portfolios from which investors choose. IFPAM model portfolios, which are created and managed on a discretionary basis by IFP’s Investment Management team. In instances where your IAR uses IFPAM, your IAR will help you determine which IFP models are best suited for you based on your risk profile, investment objectives, and preferences, leaving the actual trading decisions to IFP’s Investment Management team. IFPAM offers a variety of model portfolios with varying investment product types, including mutual fund and ETF portfolios, equity portfolios and fixed income portfolios. On a case-by-case basis, IFPAM also offers to manage portfolios according to models that an IAR may provide. The IFPAM enables its IARs who do not want to serve as RPM to have IFPAM manage the client’s portfolio. The IFPAM service model for its IARs is as follows: PROCESS ANALYZE Analyze how the IAR is currently handling the asset management portion of the IAR's business and whether the IAR thinks IFPAM could provide value. DISCUSS Schedule a consultative call to review the IFPAM team, services, and model portfolios so the IAR can better understand how IFPAM can increase the enterprise value of the IAR's practice. IMPLEMENT Once the IAR is confident IFPAM is a good fit for the IAR, IFPAM will work with the IAR to devise an implementation strategy to move over any accounts that the IAR may wish to have IFPAM manage. GROW After implementation, IAR can go back to focusing on the IAR's clients, serving as the relationship manager, but teaming up with IFPAM to manage the client's money. SERVICE ACCESS IFPAM’S PRE-BUILT MODEL PORTFOLIOS Eliminates the need to evaluate securities, analyze mutual funds and ETFs, and construct asset allocation strategies. IFPAM CAN CUSTOMIZE STRATEGIES FOR HIGH-NET-WORTH CLIENTS Eliminates the need to research positions, understand portfolio construction, and continually monitor custom strategies. IFPAM WILL TRADE AND REBALANCE YOUR ACCOUNTS AND HANDLE OPERATIONAL TASKS SUCH AS INVESTING CONTRIBUTIONS AND FREEING UP CASH FOR WITHDRAWALS Eliminates the need to learn new trading software and stop other tasks to execute trade orders. 10 | P a g e ACCESS INVESTMENT RESEARCH Eliminates the need to meet with wholesalers, perform extensive due diligence, and write trade rationales. MODEL PORTFOLIO OFFERINGS BROAD MODEL STRATEGIES PASSIVE Seeks to provide a low-cost, tax-efficient portfolio with minimal tracking error to its designated benchmark. STRATEGIC Built for long-term investors who desire an asset allocation model that is always fully invested. TACTICAL Actively managed and designed to incorporate IFPAM’s best ideas. The portfolios are traded more frequently than the strategic models and can go to cash when market conditions warrant. INCOME ORIENTED Designed to provide investors with current income, either through interest payments or dividends. THIRD PARTY MODELS Such 3rd Party models are designed to provide investors with access to 3rd party money managers and their model portfolios. IFPAM currently has relationships with Dimensional Fund Advisors (“DFA”) and Capital Group/American Funds. QUANTITATIVE Asset allocation decisions are driven entirely by pre-defined rules that are algorithmic in nature. The models are designed to provide a level of risk management and can hold elevated cash. FOCUSED STOCK / INDIVIDUAL EQUITY Built for investors who want to gain exposure to domestic companies through individual stocks. These models are designed to capture certain market factors, such as quality, minimum volatility, and momentum. SPECIFIC MODELS PASSIVE MODELS: ETP Passive – Aggressive Growth Seeks to provide a low-cost, tax-efficient portfolio with minimal tracking error to its designated benchmark. This is the aggressive growth version of the model. ETP Passive – Growth is the growth version of the model. ETP Passive – Growth with Income is the growth with income version of the model. 11 | P a g e ETP Passive – Income with Moderate Growth is the income with moderate growth version of the model. ETP Passive – Income with Capital Preservation is the income with capital preservation version of the model. STRATEGIC MODELS: MF Strategic – Aggressive Growth Built for long-term investors who desire an asset allocation model that is always fully invested. This is the aggressive growth version of the model. MF Strategic – Growth Built for long-term investors who desire an asset allocation model that is always fully invested. This is the growth version of the model. MF Strategic – Growth with Income Built for long-term investors who desire an asset allocation model that is always fully invested. This is the growth with income version of the model. MF Strategic – Income with Moderate Growth Built for long-term investors who desire an asset allocation model that is always fully invested. This is the income with moderate growth version of the model. MF Strategic – Income with Capital Preservation Built for long-term investors who desire an asset allocation model that is always fully invested. This is the income with capital preservation version of the model. ETP Strategic – Aggressive Growth Built for long-term investors who desire an asset allocation model that is always fully invested. This is the aggressive growth version of the model. ETP Strategic – Growth Built for long-term investors who desire an asset allocation model that is always fully invested. This is the growth version of the model. ETP Strategic – Growth with Income Built for long-term investors who desire an asset allocation model that is always fully invested. This is the growth with income version of the model. ETP Strategic – Income with Moderate Growth Built for long-term investors who desire an asset allocation model that is always fully invested. This is the income with moderate growth version of the model. ETP Strategic – Income with Capital Preservation 12 | P a g e Built for long-term investors who desire an asset allocation model that is always fully invested. This is the income with capital preservation version of the model. Alpha & Beta (Hybrid) Strategic – Aggressive Growth Built for long-term investors who desire an asset allocation model that is always fully invested. This is the aggressive growth version of the model. Alpha & Beta (Hybrid) Strategic – Growth Built for long-term investors who desire an asset allocation model that is always fully invested. This is the growth version of the model. Alpha & Beta (Hybrid) Strategic – Growth with Income Built for long-term investors who desire an asset allocation model that is always fully invested. This is the growth with income version of the model. Alpha & Beta (Hybrid) Strategic – Income with Moderate Growth Built for long-term investors who desire an asset allocation model that is always fully invested. This is the income with moderate growth version of the model. Alpha & Beta (Hybrid) Strategic – Income with Capital Preservation Built for long-term investors who desire an asset allocation model that is always fully invested. This is the income with capital preservation version of the model. Socially Responsible Investing (SRI) Strategic – Aggressive Growth Built for long-term investors who desire an asset allocation model that is always fully invested. This is the aggressive growth version of the model. Socially Responsible Investing (SRI) Strategic – Growth Built for long-term investors who desire an asset allocation model that is always fully invested. This is the growth version of the model. Socially Responsible Investing (SRI) Strategic – Growth with Income Built for long-term investors who desire an asset allocation model that is always fully invested. This is the growth with income version of the model. Socially Responsible Investing (SRI) Strategic – Income with Moderate Growth Built for long-term investors who desire an asset allocation model that is always fully invested. This is the income with moderate growth version of the model. Socially Responsible Investing (SRI) Strategic – Income with Capital Preservation Built for long-term investors who desire an asset allocation model that is always fully invested. This is the income with capital preservation version of the model. Wealth Accumulation Strategic – Aggressive Growth Seeks to provide a well-diversified, cost-effective solution for clients that are in the accumulation phase of their investing life cycle. Built for long-term investors who desire an asset allocation model that is always fully invested. This is the aggressive growth version of the model. 13 | P a g e Wealth Accumulation Strategic – Growth Seeks to provide a well-diversified, cost-effective solution for clients that are in the accumulation phase of their investing life cycle. Built for long-term investors who desire an asset allocation model that is always fully invested. This is the growth version of the model. Wealth Accumulation Strategic – Growth with Income Seeks to provide a well-diversified, cost-effective solution for clients that are in the accumulation phase of their investing life cycle. Built for long-term investors who desire an asset allocation model that is always fully invested. This is the growth with income version of the model. Wealth Accumulation Strategic – Income with Moderate Growth Seeks to provide a well-diversified, cost-effective solution for clients that are in the accumulation phase of their investing life cycle. Built for long-term investors who desire an asset allocation model that is always fully invested. This is the income with moderate growth version of the model. Wealth Accumulation Strategic – Income with Capital Preservation Seeks to provide a well-diversified, cost-effective solution for clients that are in the accumulation phase of their investing life cycle. Built for long-term investors who desire an asset allocation model that is always fully invested. This is the income with capital preservation version of the model. TACTICAL MODELS: ETP Tactical – Growth with Income Actively managed and designed to incorporate IFPAM’s best ideas. The portfolios are traded more frequently than the strategic models and can go to cash when market conditions warrant. INCOME ORIENTED MODELS: Diversified Income - ETP Taxable The strategy is best suited for clients whose focus is on generating income. The strategy seeks to invest in exchange traded products that are distributing current income. The goal of the strategy is to provide higher levels of income than IFPAM’s investment objective benchmark. The strategy is only offered in one investment objective, although IFP offers both a taxable and a non-taxable version, depending on the tax status of the account. This is the taxable version of the model, intended for use with taxable/non-qualified accounts. Diversified Income - ETP Non-Taxable The strategy is best suited for clients whose focus is on generating income. The strategy seeks to invest in exchange traded products that are distributing current income. The goal of the strategy is to provide higher levels of income than IFPAM’s investment objective benchmark. The strategy is only offered in one investment objective, although IFP offers both a taxable and a non-taxable version, depending on the tax status of the account. This is the taxable version of the model, intended for use with non-taxable/qualified accounts. Diversified Income – Mutual Fund Taxable The strategy is best suited for clients whose focus is on generating income. The strategy seeks to invest in mutual funds that are distributing current income. The goal of the strategy is to provide higher levels of income than IFPAM’s investment objective benchmark. The strategy is only offered in one investment objective, although IFP offers both a taxable and a non-taxable version, depending on the tax status of the account. This is the taxable version of the model, intended for use with taxable/non-qualified accounts. 14 | P a g e Diversified Income – Mutual Fund Non-Taxable The strategy is best suited for clients whose focus is on generating income. The strategy seeks to invest in mutual funds that are distributing current income. The goal of the strategy is to provide higher levels of income than IFPAM’s investment objective benchmark. The strategy is only offered in one investment objective, although IFP offers both a taxable and a non-taxable version, depending on the tax status of the account. This is the taxable version of the model, intended for use with non-taxable/qualified accounts. THIRD PARTY MODELS: DFA Market Plus ETF – Aggressive Growth ETF The Dimension models were developed to provide clients of IFP with an opportunity to access the Dimensional investment style. IFP Asset Management constructed the Dimension models based on the Dimensional asset allocation philosophy using Dimensional Funds and ETFs. These portfolios are strategically managed by IFPAM. The model benefits from an ability to utilize both the insight and track record of Dimensional and the portfolio construction experience of IFPAM. This is the aggressive growth version of the model. DFA Market Plus ETF – Growth The Dimension models were developed to provide clients of IFP with an opportunity to access the Dimensional investment style. IFP Asset Management constructed the Dimension models based on the Dimensional asset allocation philosophy using Dimensional Funds and ETFs. These portfolios are strategically managed by IFPAM. The model benefits from an ability to utilize both the insight and track record of Dimensional and the portfolio construction experience of IFPAM. This is the growth version of the model. DFA Market Plus ETF – Growth with Income The Dimension models were developed to provide clients of IFP with an opportunity to access the Dimensional investment style. IFP Asset Management constructed the Dimension models based on the Dimensional asset allocation philosophy using Dimensional Funds and ETFs. These portfolios are strategically managed by IFPAM. The model benefits from an ability to utilize both the insight and track record of Dimensional and the portfolio construction experience of IFPAM. This is the growth with income version of the model. DFA Market Plus ETF – Income with Moderate Growth The Dimension models were developed to provide clients of IFP with an opportunity to access the Dimensional investment style. IFP Asset Management constructed the Dimension models based on the Dimensional asset allocation philosophy using Dimensional Funds and ETFs. These portfolios are strategically managed by IFPAM. The model benefits from an ability to utilize both the insight and track record of Dimensional and the portfolio construction experience of IFPAM. This is the income with moderate growth version of the model. DFA Market Plus ETF – Income with Capital Preservation The Dimension models were developed to provide clients of IFP with an opportunity to access the Dimensional investment style. IFP Asset Management constructed the Dimension models based on the Dimensional asset allocation philosophy using Dimensional Funds and ETFs. These portfolios are strategically managed by IFPAM. The model benefits from an ability to utilize both the insight and track record of Dimensional and the portfolio construction experience of IFPAM. This is the income with capital preservation version of the model. DFA Dimensional Core ETF Wealth Model – Aggressive Growth The Dimension models were developed to provide clients of IFP with an opportunity to access the Dimensional investment style. IFP Asset Management constructed the Dimension models based on the Dimensional asset 15 | P a g e allocation philosophy using Dimensional Funds and ETFs. These portfolios are strategically managed by IFPAM. The model benefits from an ability to utilize both the insight and track record of Dimensional and the portfolio construction experience of IFPAM. This is the aggressive growth version of the model. DFA Dimensional Core ETF Wealth Model – Growth The Dimension models were developed to provide clients of IFP with an opportunity to access the Dimensional investment style. IFP Asset Management constructed the Dimension models based on the Dimensional asset allocation philosophy using Dimensional Funds and ETFs. These portfolios are strategically managed by IFPAM. The model benefits from an ability to utilize both the insight and track record of Dimensional and the portfolio construction experience of IFPAM. This is the growth version of the model. DFA Dimensional Core ETF Wealth Model – Growth with Income The Dimension models were developed to provide clients of IFP with an opportunity to access the Dimensional investment style. IFP Asset Management constructed the Dimension models based on the Dimensional asset allocation philosophy using Dimensional Funds and ETFs. These portfolios are strategically managed by IFPAM. The model benefits from an ability to utilize both the insight and track record of Dimensional and the portfolio construction experience of IFPAM. This is the growth with income version of the model. DFA Dimensional Core ETF Wealth Model – Income with Moderate Growth The Dimension models were developed to provide clients of IFP with an opportunity to access the Dimensional investment style. IFP Asset Management constructed the Dimension models based on the Dimensional asset allocation philosophy using Dimensional Funds and ETFs. These portfolios are strategically managed by IFPAM. The model benefits from an ability to utilize both the insight and track record of Dimensional and the portfolio construction experience of IFPAM. This is the income with moderate growth version of the model. DFA Dimensional Core ETF Wealth Model – Income with Capital Preservation The Dimension models were developed to provide clients of IFP with an opportunity to access the Dimensional investment style. IFP Asset Management constructed the Dimension models based on the Dimensional asset allocation philosophy using Dimensional Funds and ETFs. These portfolios are strategically managed by IFPAM. The model benefits from an ability to utilize both the insight and track record of Dimensional and the portfolio construction experience of IFPAM. This is the income with capital preservation version of the model. First Trust Strategic Risk Models - Aggressive Growth The First Trust Strategic Risk Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are aimed at total return while diversifying the risk exposure of various asset classes over the long-term and are designed to provide IARs with a foundation to build scalable asset allocation solutions for their clients. This is the aggressive growth version of the model. First Trust Strategic Risk Models - Growth The First Trust Strategic Risk Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are aimed at total return while diversifying the risk exposure of various asset classes over the long-term and are designed to provide IARs with a foundation to build scalable asset allocation solutions for their clients. This is the growth version of the model. First Trust Strategic Risk Models - Growth with Income The First Trust Strategic Risk Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are aimed at total return while diversifying the risk exposure of various asset classes over the long-term and are designed to provide IARs with a foundation to build scalable asset allocation solutions for their clients. This is the growth with income version of the model. 16 | P a g e First Trust Strategic Risk Models – Income with Moderate Growth The First Trust Strategic Risk Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are aimed at total return while diversifying the risk exposure of various asset classes over the long-term and are designed to provide IARs with a foundation to build scalable asset allocation solutions for their clients. This is the income with moderate growth version of the model. First Trust Strategic Risk Models – Income with Capital Preservation The First Trust Strategic Risk Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are aimed at total return while diversifying the risk exposure of various asset classes over the long-term and are designed to provide IARs with a foundation to build scalable asset allocation solutions for their clients. This is the income with capital preservation version of the model. First Trust Strategic Focus Models – All Equity Model The First Trust Strategic Focus Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are designed to provide IARs with core equity, core fixed income and core alternatives foundations to build scalable asset allocation solutions for their clients. This is the “all equity” version of the model. First Trust Strategic Focus Models – Alternatives Model The First Trust Strategic Focus Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are designed to provide IARs with core equity, core fixed income and core alternatives foundations to build scalable asset allocation solutions for their clients. This is the alternatives version of the model. First Trust Strategic Focus Models – Core Plus Fixed Income Model The First Trust Strategic Focus Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are designed to provide IARs with core equity, core fixed income and core alternatives foundations to build scalable asset allocation solutions for their clients. This is the core-plus fixed income version of the model. First Trust Strategic Focus Models – Defensive Equity Model The First Trust Strategic Focus Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are designed to provide IARs with core equity, core fixed income and core alternatives foundations to build scalable asset allocation solutions for their clients. This is the defensive equity version of the model. First Trust Strategic Focus Models – Diversified Low Duration Fixed Income Model The First Trust Strategic Focus Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are designed to provide IARs with core equity, core fixed income and core alternatives foundations to build scalable asset allocation solutions for their clients. This is the diversified low duration fixed income version of the model. First Trust Strategic Focus Models – Domestic Equity Model The First Trust Strategic Focus Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are designed to provide IARs with core equity, core fixed income and core alternatives foundations to build scalable asset allocation solutions for their clients. This is the domestic equity version of the model. First Trust Strategic Focus Models – Equity Income Model 17 | P a g e The First Trust Strategic Focus Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are designed to provide IARs with core equity, core fixed income and core alternatives foundations to build scalable asset allocation solutions for their clients. This is the equity income version of the model. First Trust Strategic Focus Models – High Income Model The First Trust Strategic Focus Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are designed to provide IARs with core equity, core fixed income and core alternatives foundations to build scalable asset allocation solutions for their clients. This is the high-income version of the model. First Trust Strategic Focus Models – High Income Municipal Model The First Trust Strategic Focus Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are designed to provide IARs with core equity, core fixed income and core alternatives foundations to build scalable asset allocation solutions for their clients. This is the

high-income municipal version of the model. First Trust Strategic Focus Models – International Equity Model The First Trust Strategic Focus Model Portfolios consist of ETFs and were created by the First Trust Advisors Model Investment Committee. These models are designed to provide IARs with core equity, core fixed income and core alternatives foundations to build scalable asset allocation solutions for their clients. This is the international equity version of the model. First Trust Strategic Focus Models – Limited Duration Municipal Model The First Trust Strategic Focus Model Portfolios consist of ETFs and are created by the First Trust Advisors Model Investment Committee. These models are designed to provide IARs with core equity, core fixed income and core alternatives foundations to build scalable asset allocation solutions for their clients. This is the limited duration municipal version of the model. Pure American Funds – Conservative Growth & Income Model The Pure American Funds Portfolios consist of mutual funds from the Capital Group (also known as American Funds). The allocations for the models are created by Capital Group/American Funds. These models are designed to offer investors with a wide variety of different investment styles that are managed strategically. This version of the model seeks primarily to provide high current income, with a secondary goal of long-term growth of capital, through dividend-paying equities and fixed income securities. Pure American Funds – Conservative Income Model The Pure American Funds Portfolios consist of mutual funds from the Capital Group. The allocations for the models are created by Capital Group/American Funds. These models are designed to offer investors with a wide variety of different investment styles that are managed strategically. This version of the model seeks current income and preservation of capital primarily through a diversified portfolio of quality fixed income securities and dividend-paying equities Pure American Funds – Global Growth Model variety of different investment styles, all managed strategically. This version of the model seeks long-term growth of capital through exposure to global companies with strong growth potential. Pure American Funds – Growth Model 18 | P a g e variety of different investment styles that are managed strategically. This version of the model seeks long-term growth of capital through exposure to companies primarily in the U.S. with strong growth potential. Pure American Funds – Growth with Income Model variety of different investment styles that are managed strategically. This version of the model seeks long-term growth of capital through exposure to equities, with a secondary goal of current income via dividend-paying equities and fixed income securities. Pure American Funds – Moderate Growth & Income Model The Pure American Funds Portfolios consist of mutual funds from the Capital Group. The allocations for the models are created by Capital Group/American Funds. These models are designed to offer investors with a wide variety of different investment styles that are managed strategically. This version of the model seeks a combination of long-term growth of capital and income as well as current income primarily through a balanced exposure to growth- and income-oriented equities and fixed income securities. Pure American Funds – Preservation Model The Pure American Funds Portfolios consist of mutual funds from the Capital Group. The allocations for the models are created by Capital Group/American Funds. These models are designed to offer investors with a wide variety of different investment styles that are managed strategically. This version of the model primarily seeks preservation of capital, with a secondary goal of current income, through a diversified portfolio of high-quality fixed income securities. Pure American Funds – Retirement Income – Conservative Model The Pure American Funds Portfolios consist of mutual funds from the Capital Group. The allocations for the models are created by Capital Group/American Funds. These models are designed to offer investors with a wide variety of different investment styles that are managed strategically. This version of the model primarily seeks current income, long-term growth of capital and conservation of capital, with an emphasis on income and conservation of capital to support sustained, inflation-adjusted withdrawals. Pure American Funds – Retirement Income – Enhanced Model The Pure American Funds Portfolios consist of mutual funds from the Capital Group. The allocations for the models are created by Capital Group/American Funds. These models are designed to offer investors with a wide variety of different investment styles that are managed strategically. This version of the model primarily seeks current income, long-term growth of capital and conservation of capital, with an emphasis on income and growth of capital to support sustained, inflation-adjusted withdrawals. Pure American Funds – Retirement Income – Moderate Model The Pure American Funds Portfolios consist of mutual funds from the Capital Group. The allocations for the variety of different investment styles that are managed strategically. This version of the model primarily seeks current income, long-term growth of capital and conservation of capital, to support sustained, inflation-adjusted withdrawals. Pure American Funds – Tax Aware Conservative Growth & Income Model variety of different investment styles that are managed strategically. This version of the model primarily seeks 19 | P a g e primarily to provide high current income and secondarily long-term growth of capital through dividend-paying equities and tax-exempt fixed income securities. Pure American Funds – Tax Aware Conservative Income Model variety of different investment styles that are managed strategically. This version of the model primarily seeks current income and preservation of capital primarily through a diversified portfolio of quality tax exempt fixed income securities and dividend-paying equities. Pure American Funds – Tax Aware Growth & Income Model The Pure American Funds Portfolios consist of mutual funds from the Capital Group. The allocations for the models are created by Capital Group/American Funds. These models are designed to offer investors with a wide variety of different investment styles that are managed strategically. This version of the model primarily seeks long-term growth of capital through exposure to equities with a secondary objective of current income through dividend-paying equities and tax-exempt fixed income securities. Pure American Funds – Tax Aware Moderate Growth & Income Model The Pure American Funds Portfolios consist of mutual funds from the Capital Group. The allocations for the models are created by Capital Group/American Funds. These models are designed to offer investors with a wide variety of different investment styles that are managed strategically. This version of the model primarily seeks a combination of long-term growth of capital and income and current income primarily through a balanced exposure to growth- and income-oriented equities, and tax-exempt fixed income securities. Pure American Funds – Tax Aware Moderate Income Model The Pure American Funds Portfolios consist of mutual funds from the Capital Group. The allocations for the models are created by Capital Group/American Funds. These models are designed to offer investors with a wide variety of different investment styles that are managed strategically. This version of the model primarily seeks current income and long-term growth of capital, with a secondary objective of capital conservation, primarily through exposure to dividend-paying equities and generally higher-quality tax-exempt fixed income securities. Pure American Funds – Tax-Exempt Preservation Model The Pure American Funds Portfolios consist of mutual funds from the Capital Group. The allocations for the models are created by Capital Group/American Funds. These models are designed to offer investors with a wide variety of different investment styles that are managed strategically. This version of the model primarily seeks preservation of capital primarily and current income secondarily through a diversified portfolio of high-quality tax-exempt fixed income securities. QUANTITATIVE MODELS: Risk Managed Quant Blend – Aggressive Growth Seeks to blend four of IFPAM’s investment strategies to create a core portfolio that seeks to add a quantitative risk management overlay. The underlying IFPAM strategies are subject to change, but currently include IFPAM’s ETP Passive – Aggressive Growth strategy, IFPAM’s Protective Asset Allocation Strategy, IFPAM’s Vigilant Asset Allocation strategy and IFPAM’s Tactical Bond Strategy. This is the aggressive growth version of the model. Risk Managed Quant Blend – Growth Seeks to blend four of IFPAM’s investment strategies to create a core portfolio that seeks to add a quantitative risk management overlay. The underlying IFPAM strategies are subject to change, but currently include IFPAM’s ETP Passive – Aggressive Growth strategy, IFPAM’s Protective Asset Allocation Strategy, IFPAM’s Vigilant Asset 20 | P a g e Allocation strategy and IFPAM’s Tactical Bond Strategy. This is the growth version of the model. Risk Managed Quant Blend – Growth with Income Seeks to blend four of IFPAM’s investment strategies to create a core portfolio that seeks to add a quantitative risk management overlay. The underlying IFPAM strategies are subject to change, but currently include IFPAM’s ETP Passive – Aggressive Growth strategy, IFPAM’s Protective Asset Allocation Strategy, IFPAM’s Vigilant Asset Allocation strategy and IFPAM’s Tactical Bond Strategy. This is the growth with income version of the model. Risk Managed Quant Blend – Income with Moderate Growth Seeks to blend four of IFPAM’s investment strategies to create a core portfolio that seeks to add a quantitative risk management overlay. The underlying IFPAM strategies are subject to change, but currently include IFPAM’s ETP Passive – Aggressive Growth strategy, IFPAM’s Protective Asset Allocation Strategy, IFPAM’s Vigilant Asset Allocation strategy and IFPAM’s Tactical Bond Strategy. This is the income with moderate growth version of the model. Risk Managed Quant Blend – Income with Capital Preservation Seeks to blend four of IFPAM’s investment strategies to create a core portfolio that seeks to add a quantitative risk management overlay. The underlying IFPAM strategies are subject to change, but currently include IFPAM’s ETP Passive – Aggressive Growth strategy, IFPAM’s Protective Asset Allocation Strategy, IFPAM’s Vigilant Asset Allocation strategy and IFPAM’s Tactical Bond Strategy. This is the income with capital preservation version of the model. Quantitative Composite This is a model of models which blends together four different quant strategies into one. The weight and underlying models are: The Protective Asset Allocation Strategy at 25%, the Vigilant Asset Allocation Strategy at 25%, the Defensive Adaptive Asset Allocation Strategy at 25%, and the Adaptive Asset Allocation Strategy at 25%. The Protective Asset Allocation Strategy The Protective Asset Allocation Strategy is a quantitative, rules-based, momentum strategy that moves to cash quickly when asset classes begin demonstrating negative price momentum. The strategy considers momentum to choose between a global universe of 12 “Risk Assets,” holding up to 6 at any given time (model can hold 7 assets if the crash protection asset is short-term treasuries). Each of the 12 risk assets are first analyzed by looking at their absolute momentum, e.g., return relative to the risk-free rate, and then by comparing the asset's current price to its 13-month, month-end moving average. The model considers the ratio of positive momentum asset classes to the entire 12 Risk Asset universe. Depending on the ratio of positive momentum assets to the universe, the model will deploy a proportionate amount to the positive momentum risk assets and cash. This is the most conservative of our quantitative strategies. The model is traded on the first trading day of each calendar month. The Robust Asset Allocation Strategy The Robust Asset Allocation Strategy divides the portfolio among 7 global asset classes: U.S. Momentum, U.S. Large Cap Value, International Equities, International Value, U.S. Real Estate, Commodities, and Intermediate Term Treasuries. The products used in each asset class causes the portfolio to have a slight tilt towards value and momentum than our other quantitative strategies. The Robust Asset Allocation model allocates positions by first analyzing each asset class’12-month return compared to the risk-free rate and also its price relative to its 12-month moving average. If the asset class ‘price is above its 12-month moving average and also its 12-month return is positive, the portfolio will take a full position in the asset class, and if only one of the conditions is true, the portfolio will take a half position in the 21 | P a g e asset class, and if neither condition is true, that portion of the portfolio is left in cash. When fully allocated (e.g., both conditions are true for each asset class), the model will consist of 20% US Momentum, 20% US Large Cap Value, 20% International Equities, 20% International Value Equities, 5% US Real Estate, 5% Commodities, and 10% Int-Term U.S. Treasuries. The model is traded on the first trading day of each calendar month. The Elastic Asset Allocation Strategy The Elastic Asset Allocation Strategy considers momentum measured over multiple time frames, as well as correlation between assets, to allocate across both a global universe of risk assets and cash. The assets traded in this strategy include the U.S. equities (“SPLG”), the NASDAQ 100 (“QQQ”), international equities (“SPDW”), emerging markets (“SPEM”), Japan Equities (“FLJP”), intermediate term U.S. Treasuries (“IEF”), and high yield bonds (“JNK”). The model’s positions are weighted based on the geometrical weighted average of the historical returns, volatilities, and correlations. The model is flexible, or “elastic” in the sense that positions don’t have pre- defined weights, but are instead weighted based on their cardinal ranking of the above factors. The model is designed for tactical asset allocation and is traded on the first trading day of each calendar month. The Defensive Adaptive Asset Allocation Strategy The Defensive Adaptive Asset Allocation Strategy is a "meta" model of sorts, combining successful elements from multiple other quantitative strategies:
• Vigilant Asset Allocation: The strategy measures momentum across multiple timeframes from 1 to 12 months, with more recent momentum given more weight.
• Dual Momentum: Each asset traded must exhibit both positive momentum and stronger momentum than competing assets.
• Adaptive Asset Allocation: Minimum variance optimization with a "weighted" covariance matrix is used to determine how much of the portfolio to allocate to each asset.
• Defensive Asset Allocation: The strategy uses the same "canary universe" concept to know when to "turn off" the strategy and move to defensive assets. Assets traded in the model include US Equities (“SPLG”), Europe Equities (“SPDW”), Japan Equities (“FLJP”), Emerging Market Equities (“SPEM”), US REITS (“RWR”), International REITS (“RWX”), Intermediate-Term Treasuries (“IEF”), Long-Term Treasuries (“SPTL”), Commodities (“PDBC”), and Gold (“SGOL”). The portfolio is traded on the first trading day of the month. This is one of the more actively traded quantitative strategies. The Adaptive Asset Allocation Strategy The Adaptive Asset Allocation Strategy combines momentum with a minimum variance portfolio to trade a diverse array of global asset classes. The strategy rules are as follows:
• At the close on the last trading day of the month, calculate the 6-month (approximately 126 trading days) return for each of the following 10 asset classes: US equities (represented by SPLG), European equities (“SPDW”), Japanese equities (“FLJP”), emerging market equities (“SPEM”), US REITs (“RWR”), international REITs (“RWX”), interim US Treasuries (“IEF”), long-term US Treasuries (“SPTL”), commodities (“PDBC”) and gold (“SGOL”).
• Go long at the close the five assets (e.g., half of the portfolio) with the highest 6-month return. Weight the five assets according to minimum variance optimization, using a “weighted”covariance matrix calculated based on 126-day correlation and 20-day volatility.
• Hold positions until the first trading day of the following month, at which point the portfolio is rebalanced based on the new signals. 22 | P a g e The Vigilant Asset Allocation Strategy The Vigilant Asset Allocation Strategy is an aggressive momentum strategy that allocates 100% of the portfolio each month to a single asset from a small basket of either offensive or defensive assets. The strategy's approach to measuring momentum is heavily biased towards very recent months, with an asset class’ one month momentum determining 40% of the asset class’ momentum score, while the twelve-month momentum only determines 2% of the score. This makes the Vigilant Asset Allocation strategy quicker to respond to market changes, but can also lead to high portfolio turnover. The strategy also makes use of a concept called “breadth momentum”, in which the allocation to defensive assets is determined by the entire universe of risk assets, as opposed to the particular asset class. Put another way, the strategy uses market breadth to determine how much of the portfolio to allocate defensively. If all four of the offensive assets exhibit positive momentum scores, the strategy will allocate 100% of the portfolio to the offensive asset with the highest momentum score. If any of the four offensive assets exhibit negative momentum scores, the strategy will allocate 100% of the portfolio to the defensive asset with the highest score (regardless of whether the score is > 0). The assets traded in this strategy include Offensive and Defensive positions. The Offensive positions consist of U.S. equities (“SPLG”), international equities (“SPDW”), emerging markets (“SPEM”), and US aggregate bonds (“SPAB”). The Defensive positions consist of US corporate bonds (SPIB), intermediate term U.S. Treasuries (“IEF”), and cash. The model is traded on the first trading day of each calendar month. The Tactical Bond Strategy The Tactical Bond Strategy trades a broad basket of bond assets based on “dual momentum”. The strategy trades between the following asset classes: intermediate-term US Treasuries, long-term US Treasuries, Treasury Inflation-Protected Securities (“TIPS”), US Corporate Bonds, US High Yield Bonds, International Aggregate Bonds, emerging market bonds, and cash. The strategy rules are as follows:
• At the close on the last trading day of the month, calculate the 6-month return for each of the eligible asset classes.
• Select the 3 assets with the highest 6-month return. For each, if the return is both positive and greater than the 6-month return of BIL (3-month US Treasuries ETF), allocate 1/3 of the portfolio on the first trading day of the next month, otherwise allocate that portion of the portfolio to cash. The strategy is built for investors who want fixed income exposure, but also want a safety valve in place if we enter a new regime of rising interest rates. The model is traded on the first trading day of each calendar month. IFPAM accounts are managed on a discretionary basis. IFP does not pool your assets with those of other customers. IFP provides continuous and regular supervisory services over what are know as separately managed account. Among other things, the advice and management of your account are tailored to your individual and specific needs and objectives. Also, you retain the right to add or withdraw securities or cash, pledge securities, and vote securities. You will receive periodic statements directly from the account custodian. The Sector Rotation Strategy The Sector Rotation Strategy is a momentum strategy that rotates between the various sectors within the U.S. economy. The model selects US stock market sectors displaying relative strength, but includes a safety valve that moves the entire portfolio to cash when the broader market is showing weakness. The rules of the strategy are as follows: 23 | P a g e
• At the close on the final trading day of the month, calculate the return for each sector over the last 1, 3, 6, 9 and 12 months, and average those results together.
• Go long the top 3 sectors at the open of the next trading day, with 1/3 of the portfolio allocated to each sector, unless the S&P 500 (represented by SPY) closes below its 10-month moving average
• If the S&P 500 closes below its 10-month moving average, move the entire portfolio to cash. FOCUSED STOCK / INDIVIDUAL EQUITY MODELS: Focused Value Factor Strategy The Focused Value Factor Strategy uses a valuation ratio, known as the Acquirer’s Multiple to find attractive takeover candidates. This metric targets undervalued companies that are generating strong operating earnings relative to their enterprise value. This not only helps find companies that are attractive for takeover, but also has proven to be a valuable predictive tool for future stock returns. In addition to finding companies with low acquirer's multiples, this model further examines how persistent each company’s earnings are. Earnings persistence measures how much of a company’s earnings are cash-based versus accrual based (recognizing revenue without a cash transaction). This filter removes companies with high amounts of accrual earnings (low earnings persistence). This model is somewhat contrarian in nature, as it often invests in companies that have fallen out of favor in the public eye, but still are generating ample operating income relative to their enterprise value. Focused Shareholder Yield Strategy The Focused Shareholder Yield Strategy invests in companies demonstrating strong Shareholder Yield. Shareholder Yield is measured by summing a company’s dividend yield, its share buy-backs (the percentage of shares outstanding that have been repurchased or issued over the last year), and its net debt pay down (the amount of debt the company was able to reduce from its balance sheet). Essentially, the model is looking for companies that have been returning capital to shareholders in predictable manner. The model is not solely focused on obtaining dividend income, so should not be used as a substitute for a dividend or income strategy, but instead should be used for total return. The strategy tends to have a value tilt. The Focused Shareholder Yield model is designed to be approximately sector neutral to the S&P 500. Each position receives an equal weight in the portfolio. The constituents are changed once per year based on the model’s screening criteria. Focused Minimum Volatility Strategy The Focused Minimum Volatility Strategy attempts to provide investors with market-like returns with less volatility than the broad market, as measured by the S&P 500. The model aims to smooth out the returns by reducing downside during bear markets, while still participating in up markets, albeit possibly to a lesser extent. By limiting drawdown, the model can help investors avoid emotional reactions to market sell-offs, which can cause them to sell at inopportune times. The model invests in companies that have previously demonstrated lower than average volatility relative to the broader U.S. equity market. The Focused Minimum Volatility model is designed to be approximately sector neutral to the S&P 500. The positions are then weighted based on their inverse volatility. The constituents are changed once per year, based on the model’s screening criteria. Focused Quality Strategy 24 | P a g e Focused Quality Strategy invests in companies with healthy balance sheets, earnings that are persistent in nature, and strong cash flow relative to liabilities. Companies evaluated typically demonstrate financial strength through high capital and sales profitability, high levels of free cash flow, low levels of debt, and low levels of accruals. Companies included in the model also tend to have a history of earnings stability. The Focused Quality model is designed to be approximately sector neutral relative to the S&P 500. Each position receives an equal weight in the portfolio. The constituents are changed once per year, based on the model’s screening criteria. Focused Dividend Strategy Focused Dividend Strategy invests in companies that pay relatively higher levels of dividends. The model screens for companies that not only are paying dividends, but also for those companies that have had a history of consistently paying and/or increasing their dividends. Stocks in the portfolio are also analyzed by their payout ratio and the amount of dividends being paid relative to the amount of earnings a company is generating to ensure that the dividend is sustainable. The weights of each position in the Focused Dividend model are then equally weighted. The constituents are changed once per year, based on the model’s screening criteria. Focused Momentum Strategy Focused Momentum model invests in companies that are experiencing positive price momentum. The philosophy behind the strategy is “the trend is your friend”. The Focused Momentum model takes advantage of the fact that markets tend to continue to trend in the direction they’re going much longer than most people assume possible. Investments that have performed well tend to continue to perform well and investments that have performed poorly tend to continue to perform poorly. However, there is always the risk and the inevitable reality that any trend will reverse, and when it does, clients will lose money. So, the right timing is important. The Focused Momentum model tends to work best in strong upward trending markets. The strategy tends to lag in choppy, sideways markets. The strategy tends to have relatively high turnover as the constituents are reviewed and modified every month. Due to the relatively higher turnover and potential for realizing gains and losses, this strategy works best in qualified accounts, which means it is often not appropriate for non-qualified accounts. Focused GARP Strategy Using Y-charts Growth at a Reasonable Price Strategy, IFP will buy the top 35 stocks on the first trading day of each month and sell anything in the model which is not in the top 35. Growth at a reasonable price (GARP) finds stocks with recent historical growth - in terms of earnings, sales, and assets - that are selling at low prices compared to the earnings and dividends they pay out. Hedge Fund Tracker Top 10 Strategy Stocks come from the quarterly 13F filings, point in time, approximately 45 days after the end of month filing date of each quarter, typically by the middle of February, May, August and November. Thus, the model is reconstituted with an approximate 45-day lag after the quarter-end, with positions occasionally rebalanced to equally weight. Hedge funds considered must have AUM greater than $3.5 billion and must have outperformed the S&P 500 Total Return from 2008, and over the last 3 years. The top 10 picks from the group are selected according to a “Combined Percent of Portfolio” method by summing each securities percent of portfolio for each filer. Stocks with the highest combined percentage count are picked first. ETFs, options and short positions are excluded. Hedge Fund Tracker Top 50 Strategy Stocks come from the quarterly 13F filings, point in time, approximately 45 days after the end of month filing date of each quarter, typically by the middle of February, May, August and November. Thus, the model is reconstituted with an approximate 45-day lag after the quarter-end, with positions occasionally rebalanced to 25 | P a g e equally weight. Hedge funds considered must have AUM greater than $3.5 billion and must have outperformed the S&P 500 Total Return from 2008, and over the last 3 years. The top 50 picks from the group are selected according to a “Combined Percent of Portfolio” method by summing each securities percent of portfolio for each filer. Stocks with the highest combined percentage count are picked first. ETFs, options, and short positions are excluded. WRAP FEE PROGRAM VERSUS PORTFOLIO MANAGEMENT PROGRAM IARs provide asset management services through both Wrap Fee programs and other management programs. Under IFP’s traditional management program, there are two separate types of fees. IFP charges an investment advisory fee for advisory services, and other fees are charged by activity (e.g., a ticket fee), usage, service for each transaction (e.g., buy/sell/exchange) or usage or service by IFP, its custodian and/or our affiliated introducing broker-dealer, IFP Securities, for accounts held at the qualified custodian. Under a Wrap Fee program, advisory services and transaction services are provided for one fee to the client. From a management perspective, there is not a fundamental difference in the way an IFP IAR manages Wrap Fee accounts versus traditional management accounts. However, in a Wrap Program, there is an incentive to trade less. Otherwise, the significant difference is the way in which transaction services are paid. For Wrap Fee program, there is a separate disclosure document that should be provided to you, which is referred to as the Wrap Fee Brochure, and the purpose of the brochure is, among other things, to alert you about the features of the service, conflicts-of-interest and the fact that because the Wrap Fee “bundles” all services and transactions into 1 cost, it could quite possibly result in higher overall fees assuming a certain level of transactions and other services that you may want or experience in your account. The maximum fee for Wrap accounts is 2.0%, which coincides with IFP’s maximum fee if the account is not a TPAM account, but notably, a non-Wrap fee arrangement is more likely to be less than 2.0%, on average, because transaction costs and other service costs are paid in addition to the investment advisory fee. The maximum fee for a TPAM account is 2.5%. You should discuss with your IAR whether a Wrap Fee program would be better or worse for you considering the level of transactions and other service needs you have. See our Wrap Fee Brochure for a description of services, fees and conflicts-of-interest related to our Wrap Fee business. Some IARs will utilize the services of TPAMs to assist in managing your investments. The nature of the advisory and management services are determined between the client and the 3rd party investment adviser, and their services should be explained in their Form ADV 2A, and their Client Relationship Summary (“CRS”). Your IAR can assist you with selecting and monitoring unaffiliated TPAMs offering asset management and other investment advisory services. Such arrangements with TPAMs are structured as either solicitor arrangements, whereby IFP would solicit clients to the TPAMs in exchange for a fee, without any authority to provide ongoing advice or account management, or as co-advisory arrangements, wherein both firms would have authority to provide ongoing advice and/or account management services in exchange for a fee split as negotiated by the respective firms. In situations where IFP/IAR are serving as co-advisors, your IAR is responsible for the initial and ongoing review and is also responsible for maintaining your current information. Generally, such a referral to such a third-party must based upon a fiduciary/”Best Interest” determination, predicated upon reasonable due diligence, which supports the idea that the use of a third party would be in the best interest of you, the client. That being said, if IFP is not serving as a co-advisor, and is merely a solicitor, its scope of services and responsibility is more limited. In co-advisory arrangements, your IAR should assist you with identifying your risk tolerance, investment objectives, implementation strategies, etc. He or she will then recommend asset managers geared toward your stated investment objectives and risk tolerance. You will enter into an agreement directly with the TPAM. Your IAR is available to answer questions you may have regarding your account and act as the communication conduit between you and the TPAM. Your IAR will be available to review the account(s) with you to determine if the TPAM is continuing to meet your investment objectives. Generally, TPAMs will exercise discretionary authority to determine the securities to be purchased and sold for you. In these situations, neither IFP, nor your IAR, has discretionary trading authority with respect to your account with the TPAMs(s) and are not responsible for investment selection or trade implementation in your accounts. USE OF THIRD-PARTY ASSET MANAGERS 26 | P a g e IFP, through its affiliated IARs, provides consulting and advisory services to both ERISA and Non-ERISA employer- sponsored retirement plans, including, but not limited to, 401(k), 457(b), 457(f), 403(b), Simple IRA, SEP IRA, nonqualified, deferred compensation, pension and profit-sharing plans (collectively, “Plans” or individually, “Plan”) on both a one-time and/or ongoing basis. IFP offers a suite of detailed engagement agreements which are customized for each client relationship and executed by the Plan’s designated fiduciary upon conclusion of a careful review, which, at times, includes the client’s independent legal counsel. Through its agreements, IFP is engaged to provide investment advisory services on either a “non- discretionary” basis (serving as a “fiduciary” as defined by §3(21)(A)(ii) of the Employee Retirement Income Security Act of 1974 (“ERISA”)); or on a “discretionary” basis and thus will serve as an “Investment Manager” as defined by §3(38) of ERISA. Certain other additional services available from IFP would be considered non-fiduciary by definition and function and are explicitly detailed within the Plan’s executed agreement. For non-discretionary services, IFP and its IARs will act in a solely advisory capacity and will not have or exercise any discretionary authority or control relative to the management or investment of the assets of the respective Plan. For discretionary services, IFP and its IARs will be designated as the Investment Manager to the Plan and assume responsibility for the investment selection and asset management for the Plan’s master menu made available to the Plan participants from which to choose. In all cases, IFP will not serve as the “named fiduciary” of the Plan. Our agreements offer our clients the opportunity to select one or more of the following services in various engagement categories: ERISA 3(21) Investment Adviser Fiduciary Services (Non-Discretionary):
• Development of an Investment Policy Statement (“IPS”);
• Recommendations for the selection and monitoring of the Plan’s Designated Investment Alternatives (“DIAs”) that meet the standards set forth within the IPS or as established by other stated goals, objectives and restrictions communicated to IFP by the Plan’s fiduciaries that also satisfy ERISA’s §404(c) requirement that participant-directed retirement plans offer a “broad range” of investment options;
• Recommendations for selecting and monitoring the Plan’s Qualified Default Investment Alternatives (“QDIAs”);
• Recommendations for and monitoring of Third-Party Investment Managers, if utilized;
• Investment performance measurement, analysis and reporting;
• Attendance and active participation at Plan Oversight Committee meetings; and
• Individualized investment advice options for Plan Participants; ERISA 3(38) Investment Manager Fiduciary Services (Discretionary):
• Development of an Investment Policy Statement (“IPS”);
• Selection and monitoring of the Plan’s DIAs;
• Selecting and monitoring of the Plan’s QDIAs;
• Investment performance measurement, analysis and reporting; and
• Attendance and active participation at Plan Oversight Committee meetings. ERISA Non-Fiduciary Services:
• Consulting services to assist the Plan Sponsor with plan design (Settlor) decisions;
• Provide the Plan’s Oversight Committee with fiduciary education and “best practices” awareness as well as advice on the development of a Committee Oversight Charter, if so desired;
• Assistance with selecting and monitoring non-fiduciary vendors (e.g., TPA, Recordkeeper, etc.); and PENSION PLAN ADVISORY AND CONSULTING SERVICES 27 | P a g e
• Delivering or coordinating individual and/or group investment and plan provision education, enrollment support and general retirement planning guidance. From time to time with the Plan Sponsor’s permission, IARs can make the Plan or Plan participants aware of and offer services to them available from the IAR that the participant would contract for separate and apart from the retirement plan advisory and consulting services described above specific to Plan assets. In offering or delivering any such additional services, IAR is not providing the services while acting as a fiduciary under ERISA with respect to such offering of services applicability to plan assets. If any such separate services are offered to participants, they will make an independent assessment of the need for or merits of such services without reliance on the advice, judgment or influence of IFP or its IAR. IFP intends to fully adhere to the guidelines and mandates set forth within the DOL’s Prohibited Transaction Exemption (PTE) 2020-02 which became effective February 16th, 2020 specific to rollovers from qualified plans. As such, IFP will require any participant considering a rollover to complete IFP’s Employer Plan Distribution disclosure and acknowledgment document, which details the rationale for the rollover recommendation and discloses important information and considerations in connection with the rollover decision that are acceptable to the client. IFP has a form designed to gather data and serve as a basis to evaluate the appropriateness of any such rollover recommendations. RETIREMENT PLAN INVESTMENTS DISCLOSURE AND FEES Fees for retirement plan services are negotiated prior to the signing of the appropriate IFP Retirement Plan Agreement and includes the negotiated fee to be compliant with ERISA §408(b)(2) mandates. This disclosure is required of all vendors providing services to a retirement plan or its participants and must disclose all direct and indirect compensation they will receive in exchange for the services they provide to a retirement plan. IFP’s agreements with its Plan Sponsor clients disclose the services it will provide and the fee it will charge for those services and serves as its required ERISA §408(b)(2) disclosure. See Item 5 below for a description of fees such services, but they generally do not exceed 2% of the Plan assets when AUM-based, or $250,000 for the large- “mega” Plan market and $50,000 for the micro-small Plan market (e.g., <$10 million) when flat fee-based. TAX EXEMPT ORGANIZATIONS Some IARs of IFP work with tax exempt programs and provides services to employees of public-school systems and tax-exempt organizations that qualify under Section 501(c)(3) of the Internal Revenue Code. Services are usually provided through the organization’s retirement accounts held in an Optional Retirement Plan (“ORP”), also known as a 401(a), 403(b) and 457 accounts. IARs primarily use TIAA or Fidelity to provide these services. Both programs apply a maximum fee allowed to be charged of 2.0% of AUM. 5 Item 5, Fees and Compensation, "Retirement Plan Investment Advisory Fees." 28 | P a g e IRA ROLLOVER/TRANSFER CONSIDERATIONS As part of our investment advisory services, IARs can make recommendations to qualified plan participants and IRA owners regarding the rollover or transfer of their employer sponsored retirement plan account or IRA assets. In the case where an IAR recommends a retirement plan rollover or transfer into an IFP advisory account program, the IAR will earn a portion of the advisory fee. This presents a conflict of interest because IARs may have an economic incentive to recommend a rollover of retirement plan assets into an IFP advisory program account. Plan participants are under no obligation to rollover their retirement plan assets to an IRA with IFP or a 401(k) advised by IFP’s IAR and should carefully consider all relevant factors, such as penalty-free withdrawals, whether loans are permitted, legal protections, required minimum distributions, fees and expenses, service levels, available investment options, employer stock considerations, Federal and State taxes and other competitive alternatives. In these rollover/transfer situations, IFP intends to fully adhere to the guidelines and mandates set forth within the DOL’s Prohibited Transaction Exemption (PTE) 2020-02 that became effective February 16th, 2021 specific to rollovers/transfers to/from qualified plans or between IRAs. We have instituted written policies, procedures and documentation designed to achieve compliance with the impartial conduct standards, mitigate conflicts of interest and does not create incentives that place our interests, or that of our IARs/RRs, ahead of those of the qualified plan participant or IRA account holder involved. By complying with impartial conduct standards, we will ensure:
• The advice to execute the rollover is in the best interest of the participant at the time it is provided;
• We will only receive reasonable compensation and
• No statements are made to the participant that are materially misleading. We will provide certain disclosures in advance, including:
• An acknowledgment of our status as a fiduciary;
• A description or the services to be provided;
• A description of any material conflicts of interest and
• Documentation of the specific reason(s) for the rollover recommendation and why it is in the best interest of the participant/IRA owner. IFP will also require any participant considering a rollover or transfer to complete IFP’s Qualified Plan/IRA Rollover/Transfer Recommendation and Acknowledgement Form, which details the rationale for the rollover recommendation and discloses important information and considerations in connection with the rollover decision that are deemed acceptable to the client as evidenced by their acknowledgement signature. In the event a commissionable annuity product is included in the recommendation, we will also adhere to the requirements of the DOL’s PTE 84-24 by incorporating and executing additional documentation in line with this guidance, including another client acknowledgement signature. 29 | P a g e When IFP hires or associates with an IAR or registered representative (“RR”) of IFP’s affiliated broker/dealer, you are not obligated to transfer your other investments and assets to IFP in order to retain a relationship with your IAR or RR. Any recommendation made by our IARs must be in your best interest, and you should consider the relative fees, platform services, investment options, tax effects, proprietary or company securities held through the other firm, etc. IFP encourages you to ask your IAR why any recommended account or investment transfer is in your best interest. With some exceptions, IFP IARs are available to offer advice on most types of investments owned by client and, at the specific request of a client, will explore investment options not currently owned by a client. However, from the perspective of not being registered to engage in certain business lines, IARs are not permitted to provide advice on futures or commodity contracts. From a business policy perspective, IFP also elects to refrain from knowingly accepting investments in certain industries not covered by its Errors & Omissions insurance policy, including cryptocurrencies, leveraged/inverse ETFs and marijuana-based business securities. If you happen to have such securities in your account, you will be asked to either sell the positions or transfer them to another firm. We also require that TPAMs used by IARs be approved by IFP. Some IARs limit advice to specified product types such mutual funds, whereas others will provide advice on a full range of securities. If an IAR is dually registered as an RR of IFP Securities, IAR will be restricted from providing advice based if the registration types held by the RR is known as a limited registration (e.g., a Series 6 versus 7, which only qualifies to RR to sell mutual funds and insurance securities, assuming in the latter case, the RR is also insurance licensed and appointed by the respective insurance company). For example, if an IAR does not hold a Series 7 license with IFP Securities, but rather and holds only the Series 6 registration, the IAR will be restricted to providing advice on only investment company products such as mutual funds and variable annuity contracts. Some IARs develop models or strategies that are generally applied across all clients while other IARs will develop truly individualized portfolios for each client. You will not be necessarily treated the same as other clients, which in a sense is a limitation of services, and could exist due to the way that IAR or IFP manages accounts due to business reasons. In addition, many of our IARs also act as insurance agents independent from our firm. To the extent your IAR provides fixed insurance products or services to you (other than fixed indexed annuities)6, he or she does so outside of IFP’s supervision. Some of our IARs are also involved in other business activities, such as accounting, legal, tax, and other non- investment services, which are outside the scope of IFP's services, and therefore IFP is not responsible for such non- investment services that may be offered by our IARs, although such activities are subject to preclearance procedures of IFP and some level of supervisory oversight. Some of our IARs are licensed as independent insurance agents through various insurance companies; they solicit, offer and sell fixed and/or property and casualty insurance products where they are duly registered to conduct business. IFP has established a Business Continuity Plan (“BCP”). The BCP describes how IFP would respond to significant business disruptions and provide you with alternative contact information and access in the event of a significant business disruption. It is also available upon written request. It is also available on our Web Site at https://ifpartners.com/business- continuity-plan/. 6 Any insurance securities (variable annuities, variable insurance and other insurance products which are subject to a prospectus filed with the SEC), that fall within the scope of IFP's supervision. ACCOUNT TRANSFERS FROM ANOTHER FIRM TO IFP LIMITS ADVICE TO CERTAIN TYPES OF SERVICES AND LIMITED SCOPE OF OUR INVOLVEMENT AS A FIRM BUSINESS CONTINUITY PLAN 30 | P a g e IFP has established a Privacy Policy, which essentially stipulates that IFP will not share information with unaffiliated 3rd parties not essential to service your investment account in the manner you elect. IFP will not sell you information do marketing organizations. You may find a copy of our privacy policy statement in our Web Site at https://ifpartners.com/disclosures/ - https://ifpartners.com/wp-content/uploads/2021/04/Privacy-Policy-and-Opt-Out- Form-41221.pdf. As of December 31, 2021, IFP had assets under management of $ 8,915,756,449 Assets Under Management/Advisement # of Accounts Discretionary $8,782,284,529 32,586 Non-Discretionary $979,070,820 4,805 Total $9,761,355,350 37,391