Services:
The Sterling Group is an investment advisory firm comprised of a team of professionals who oversee clients’
assets and provide a range of comprehensive wealth management services. Our team has the skill and expertise
to offer quality economic advice and market analysis, as well as a strong network of professionals to refer to for
legal and tax advice, enhancing our ability to guide clients toward achieving their financial goals. The Sterling
Group has been helping clients in formulating and implementing complex wealth management strategies and
managing their assets for over three decades.
The Sterling Group was established in 1990 and is owned by C. Hunt Salembier.
As of January 31, 2023, The Sterling Group provides advice to client accounts with a total market value of
$320,726,378 broken down as follows:
• $293,871,407 Management of client assets on a discretionary basis
• $0 Management of client assets on a non-discretionary basis
• $872,022 Advice with respect to LPL and/or third-party managed platforms
In addition to the assets listed above, our advisors assisted clients with $13,294,853 in non-managed assets.
Furthermore, our advisors also act as registered representatives of LPL Financial in the sale of securities. In
this role, our advisors provided guidance with respect to approximately $12,688,096 worth of client
investments.
The Sterling Group offers a wrap program that provides investment strategies that are tailored to our client’s
specific needs. Management services may be provided on a discretionary or non-discretionary basis. Each
portfolio is designed to help you achieve your investment goals. We select from a wide array of investment
vehicles, such as stocks, options, fixed income securities, mutual funds, real estate investment trusts, exchange
traded funds, and in certain situations we may choose hedge funds, high yield debt, managed futures, and other
more complex or specialized instruments. Although the selection of investments is at the discretion of the
advisor, each client has the opportunity to place reasonable restrictions on the types of investments to be held
in the portfolio. Once the appropriate portfolio has been determined, we monitor the investments regularly,
conduct account reviews periodically and rebalance the portfolio if necessary, based upon the client’s individual
needs, stated goals and objectives. The Sterling Group takes a calm and measured approach to managing
client’s assets that is supported by the belief that over the long term, a consistent strategy that is meticulously
followed will provide the best opportunity for the best return. Clients may choose to engage The Sterling
Group on a non-discretionary basis. Changes in non-discretionary accounts will only be implemented with the
client’s authorization.
Client assets managed by The Sterling Group are held in accounts at a registered broker/dealer and qualified
custodian, who will provide clearing, custody, and other brokerage services for client accounts. At the present
time The Sterling Group has custodial relationships with LPL Financial, LLC and Charles Schwab & Co. While
The Sterling Group may assist the client in completing the custodian’s paperwork, the client is ultimately
responsible for providing all of the necessary information to establish the account. Clients will retain all rights
of ownership in the accounts, including the right to withdraw securities and cash, vote proxies, and receive
transaction confirmations.
On an accommodation basis, The Sterling Group may also agree to handle certain accounts on a non-managed
basis. In such cases, The Sterling Group will not be responsible for providing management on either a
discretionary or non-discretionary basis.
The Sterling Group also offers additional investment advisory services to clients. For more information about
The Sterling Group’s other investment advisory services, please contact your advisor for a copy of The Sterling
Group Firm Brochure or go to www.adviserinfo.sec.gov.
Fees and Compensation:
Clients pay The Sterling Group a single annual advisory fee for advisory services and the execution of
transactions. Clients do not pay brokerage commissions, markups or transaction charges for execution of
transactions in addition to the advisory fee.
Fees are paid quarterly in advance and billed on a pro-rated annualized basis. Fees are calculated as a percentage
of the market value of all assets on the last trading day of the month of the previous quarter, including cash
holdings. The maximum annual advisory fee is 1.75% and is negotiable between The Sterling Group and the
client. The fee may be higher than the fee charged by other investment advisors for similar services.
The fee structure and amount of the advisory fee will be as stated in the written management agreement
between The Sterling Group and the client. For tiered billing, eligible advisory accounts within the client’s
household may be grouped together for the purpose of assessing the tiered fee level. Household is
generally defined as accounts for the same decision maker and eligible advisory accounts are typically
defined as accounts paying an advisory fee to The Sterling Group for asset management, including non-
wrap fee accounts. Accounts excluded from grouping within the household include 529 plan managed
assets, assets managed by a third-party investment advisor, and any account for which The Sterling
Group is not engaged to provide investment advice and therefore not receiving an advisory fee. Within
the tiered fee billing structure, applicable advisory fees will be deducted proportionately from each
account contributing to the tiered billing thresholds unless other arrangements have been agreed upon
between The Sterling Group and client. The flat rate percentage advisory fee structure is primarily in
place for legacy client relationships and new accounts for such clients. Clients may switch from the flat
rate percentage advisory fee structure to the tiered advisory fee structure upon request and/or
recommendation from The Sterling Group.
The advisory fee is shared between The Sterling Group and its advisors. In such cases where a custodian other
than LPL is selected by the client, The Sterling Group will pay a modest fee to LPL for oversight. This presents
a conflict of interest in that The Sterling Group has a financial incentive to recommend LPL as a custodian.
Notwithstanding, The Sterling Group takes its responsibility to clients seriously, and will recommend a
custodian to clients only if it believes it is in the client’s best interest.
In order to hire The Sterling Group to provide management services, clients will be asked to enter into a written
investment advisory agreement with The Sterling Group. This agreement will set forth the terms and
conditions of the relationship, including the amount of the investment advisory fee.
In the event the advisory agreement is terminated in writing to The Sterling Group before the end of the
quarterly period, clients are entitled to a pro-rated refund of any pre-paid quarterly advisory fee based on the
number of days remaining in the quarter after the termination date.
Although clients do not pay a transaction charge in the wrap program account, clients should be aware that
The Sterling Group pays the account’s custodian for trading costs. With respect to accounts held at LPL and
certain accounts held at Schwab, The Sterling Group pays a single asset based fee to cover the cost of
transactions placed in client account. With respect to certain other accounts held at Schwab, The Sterling Group
pays a transaction charge to the custodian for each transaction in the account. The transaction charges vary
based on the type of transaction (e.g., mutual fund, equity or fixed income security). The decision of whether
to set up the account for asset based pricing or per transaction pricing is made by The Sterling Group at the
time you establish an account with the custodian. The Sterling Group attempts to select the least expensive
option and considers such factors as estimated transactions per year and the estimated cost per transaction.
When The Sterling Group pays transaction charges rather than an asset based fee, there is a conflict of interest.
There is a financial incentive for The Sterling Group to avoid transactions in the client’s account, or to place
such trades less frequently. Clients should also understand that the amount of the transaction charges paid by
The Sterling Group may be a factor that The Sterling Group considers when deciding which securities to select,
how frequently to place transactions, and the level of advisory fee to charge the client.
Other Types of Fees and Charges:
Client accounts will incur additional fees and charges from parties other than The Sterling Group as noted
below. These fees and charges are in addition to the advisory fee paid to The Sterling Group. The Sterling
Group does not share in any portion of these third party
fees.
The custodian and broker-dealer providing brokerage and execution services on client accounts will impose
certain fees and charges. The custodian notifies clients of these charges at account opening and generally makes
available a list of these fees and charges on its website. The custodian will deduct these fees and charges directly
from the client’s account.
Some of these fees and charges are described below:
• If a client account invests in mutual funds or ETFs, please note that as a shareholder of the fund, a
management fee will apply, in addition to paying us an advisory fee for managing the assets. As many of
the funds available may be purchased directly, the second layer of fees could be avoided by not using The
Sterling Group’s management services and by the client making their own fund investment decisions.
• Certain mutual funds impose fees and charges such as contingent deferred sales charges, early redemption
fees and charges for frequent trading. These charges will apply if a client transfers into or purchases such
a fund in the account.
• Although only no-load and load-waived mutual funds can be purchased in a client’s account, clients
should understand that some mutual funds pay asset based sales charges or service fees (e.g., 12b-1
fees) to the custodian.
• If a client holds a variable annuity as part of an account, there are mortality, expense, and
administrative charges. The annuity Sponsor may also impose fees for additional contract riders,
and charges for excessive transfers within a calendar year.
• Certain retirement accounts - IRA and qualified retirement plan fees.
• Certain trust accounts - Administrative servicing fees for trust accounts.
• Unit investment trusts (“UIT”) - creation and development fees or similar fees imposed by UIT
sponsors.
• Alternative investments - Hedge fund and managed future investment management fees, managed
futures investor servicing fees, and business development company fees.
• Sweep money market funds and cash balances – 12b-1 fees or other fees based on average daily
deposit balances.
• Other charges required by law and imposed by the executing broker/dealer or custodian.
Further information regarding fees assessed by a mutual fund or variable annuity is available in the appropriate
prospectus, which is available upon request from The Sterling Group or from the product sponsor directly.
Within the wrap program, The Sterling Group uses mutual funds that the custodian makes available
within their platform. Mutual funds may offer multiple share classes for purchase in a fee-based
investment advisory program. In certain instances, a mutual fund company may offer only Class A
shares, while another similar mutual fund may be available in an institutional or fee-based advisory share
class. When an asset management account holds Class A shares, the custodian may receive a portion of
the 12b-1 fees charged by the mutual fund. The Sterling Group does not receive any portion of these
12b-1 fees. Institutional or fee-based advisory share classes generally are not subject to 12b-1 fees. Of
the various share classes that may be offered by a particular custodian, Class A shares are generally more
expensive for a client to own, as compared to an institutional or fee-based advisory share class. An
investor in an institutional or fee-based advisory share class will typically pay a lower expense ratio than
they would in a Class A share, allowing the investor to retain more of the investment returns. While
The Sterling Group strives to identify share classes with the lowest available expense ratio, clients should
not assume that they will always be invested in most inexpensive share class. There may be times when
a Class A share is deemed to be in the best interest of the client. In an advisory program, the
appropriateness of a particular mutual fund share class should be determined based on a variety of
different considerations, including but not limited to: the advisory fee that is charged; whether
transaction charges are applied and the amount of the transaction charges applied to the purchase or
sale of mutual funds; the anticipated frequency of transactions; the size of the account; the holding
period for the mutual funds; the overall cost structure of the advisory program; share class eligibility
requirements; and potential tax consequences.
While clients in the wrap program will not pay transaction fees, as outlined in the Fees and
Compensation section of this Brochure, there are certain accounts at Schwab where The Sterling Group
will pay a transaction charge for each transaction. The transaction charge level varies depending on the
amount of 12b-1 fees and/or sub transfer agent recordkeeping fees that Schwab receives from the
mutual fund. The Sterling Group generally does not pay a transaction charge for Class A share mutual
fund transactions, but generally does pay a transaction charge for institutional and fee-based advisory
share class transactions. The Sterling Group works diligently to select the lowest share class available
for its clients; however, the opportunity exists for The Sterling Group to consider its overall costs when
deciding which mutual funds to select and whether or not to place transactions in the account. This
represents a conflict of interest between The Sterling Group and the client. Clients should understand
this conflict and consider the additional indirect expenses that exist as a result of the mutual fund fees
when establishing a wrap program account.
Other Important Considerations:
• The advisory fee is an ongoing wrap fee for investment advisory services, the execution of
transactions and other administrative and custodial services. The fee may cost the client more than
purchasing the program services separately. Factors that bear upon the cost of the account in relation
to the cost of the same services purchased separately include the type and size of the account,
historical and or expected size or number of trades for the account, and number and range of
supplementary advisory and client-related services provided to the client.
• The advisory fee may also cost the client more than if assets were held in a traditional brokerage
account. In a brokerage account, a client is charged a commission for each transaction, and the
representative has no duty to provide ongoing advice with respect to the account. If the client plans
to follow a buy and hold strategy for the account or does not wish to purchase ongoing investment
advice or management services, the client should consider opening a commission-based brokerage
account rather than a wrap fee program account.
• The Sterling Group is recommending the advisory account to the client and receives compensation
as a result of the client’s participation. This compensation includes the advisory fee and may also
include other compensation, such as bonuses, awards or other things of value offered by our
custodians to The Sterling Group or its advisors. The amount of this compensation may be more
or less than what The Sterling Group would receive if the client participated in other advisory
programs, programs of other investment advisors or paid separately for investment advice,
brokerage and other client services. Therefore, The Sterling Group may have a financial incentive
to recommend a wrap program account over other programs and services. The Sterling Group takes
its responsibilities seriously and will only recommend that clients hire The Sterling Group for
management services if The Sterling Group believes it is appropriate and in the client’s best interests.
• Most investment products available to be purchased in the client account can be purchased by clients
outside of the account, through broker-dealers or other investment firms not affiliated with The
Sterling Group.
• A conflict of interest exists for individuals that currently invest in an employer-sponsored retirement
plan or individual retirement account (IRA) and are considering a roll out or transfer of these assets
to an account managed by The Sterling Group. This conflict exists because The Sterling Group will
be compensated only if the individual transfers their assets into an IRA that is then managed by The
Sterling Group. As a result, it can be construed that The Sterling Group has a financial incentive to
recommend one action over another. Therefore, the individual should include in his/her decision
making process, a thorough review of all options available. For example the individual could (i)
remain invested in the current retirement plan or account (if available), (ii) transfer assets to a new
employer-sponsored retirement plan (if available), (iii) transfer assets to an IRA with a different
financial institution, or (iv) withdraw assets directly, having the account proceeds payable to the
individual (such a withdrawal may be subject to federal and applicable state and local taxes and
possibly subject to penalty.