Compton Wealth Advisory Group, LLC founded in 2009 in the Commonwealth of Virginia,
operates as a limited liability company wholly owned by Mark Compton, its managing member. In
April 2016, the firm became registered as an Investment Adviser providing investment management
services to individual clients.
INVESTMENT MANAGEMENT SERVICES
At Compton Wealth we have a fiduciary duty to provide services consistent with the client’s best
interest. As part of our investment advisory services, we will review your portfolio(s) on an ongoing
basis to determine if any changes are necessary based upon various factors, including, but not
limited to investment performance, market conditions, fund manager tenure, style, drift, account
additions/withdrawals, and/or a change in your investment objective. Based on these factors, there
may be times when we determine that changes to your portfolio are neither necessary, nor prudent.
You remain subject to the fees described in Item 5 during periods of account inactivity. Of course,
there can be no assurance that investment decisions made by us will be profitable or equal any
specific performance level(s).
Our investment advisory and management services are provided on a discretionary or non-
discretionary basis as determined by you and are primarily managed by us, or when recommended,
by a third-party investment manager to oversee the fixed income portion of your account(s). When
you engage us to provide discretionary services, this allows us to buy and sell securities whenever
we believe changes are appropriate. Such securities include stocks, bonds, exchange traded funds,
mutual funds and cash equivalents. Account supervision is guided by your stated investment
objective (i.e., balanced, growth with income, moderate growth, etc.) You can impose restrictions
on investing in specific securities or types of securities by notifying us in writing. When you engage
us to provide non-discretionary services, you must be willing to accept that we cannot effect any
account transactions without obtaining prior consent from you. Thus, in the event we would like to
make a transaction for your account (including an event of an individual holding or general market
correction), and you are unavailable, we will be unable to effect account transactions as we would
for our discretionary clients without first obtaining your consent.
Before engaging us to provide our services, clients are required to enter into an Investment Advisory
Agreement with us setting forth the terms and conditions of the engagement (including
termination), describing the scope of the services to be provided, and the fee that is due from the
client. We begin by helping clients identify their particular risk tolerances and investment
objectives and then help clients select suitable investments or investment managers to help meet
those risk tolerances and objectives. Your investment objective is identified by determining your
risk tolerance based upon your age, income, experience, need for cash flows, investment goals,
emotional tolerance for volatility, tax situation, time horizon, legal considerations, and any other
unique circumstances. The information provided by you is collected during client meetings and
interviews. After reviewing your financial situation and defining investment guidelines, we
implement the investment strategy through a combination of investments. We provide ongoing
investment advisory and management services that are tailored to your needs. Once allocated, we
provide ongoing monitoring and review of account performance, asset allocation and client
investment objectives, and may rebalance and/or may recommend that clients rebalance accounts
as necessary based on such reviews. Account supervision is guided by your stated objectives and
any restrictions imposed by you. Capital market conditions and client circumstances are monitored,
and portfolio adjustments are made or recommended as needed to reflect significant changes in any
or all the above variables. Investment manager selection includes an initial third-party investment
manager due diligence, performance reporting and account monitoring, ongoing manager due
diligence, and continuous client consultation.
Please Note: Compton Wealth believes that it is important for the client to address financial
planning issues on an ongoing basis. Compton Wealth’s advisory fee, as set forth at Item 5 below,
will remain the same regardless of whether or not the client determines to address financial planning
issues with Compton Wealth.
RETIREMENT PLAN CONSULTING SERVICES
We provide pension consulting services, in the capacity of an ERISA 3(21) advisor, pursuant to
which we assist sponsors of self-directed retirement plans with the selection and/or monitoring of
investment alternatives (generally open-end mutual funds) from which plan participants shall
choose in self-directing the investments for their individual plan retirement accounts (which may
include investment strategies devised and managed by Compton Wealth). In addition, to the extent
requested by the plan sponsor, Compton Wealth may also provide participant education designed
to assist participants in identifying the appropriate investment strategy for their retirement plan
accounts and participate in plan investment policy reviews.
FINANCIAL PLANNING AND CONSULTING SERVICE (STAND-ALONE)
To the extent specifically requested by a client, we shall generally provide financial planning and/or
consulting services (including investment and non-investment related matters, including estate
planning, insurance planning, etc.) inclusive of our investment management engagement. We may
also provide, upon client request, financial planning services pursuant to a separate financial
planning agreement. We provide a wide array of general personal financial planning services in
addition to investments. Such services include some or all of the following: Retirement,
Educational, and Insurance Planning. Our fees are negotiable and may vary depending upon the
level and scope of the service(s) required and the professional(s) rendering the service(s). Before
engaging us to provide planning or consulting services, clients are required to enter into a Financial
Planning Agreement with us setting forth the terms and conditions of the engagement (including
termination), describing the scope of the services to be provided, and the portion of the fee that is
due from the client before we commence services. If requested by the client, we may recommend
the services of other professionals for implementation purposes, including our representatives in
their individual capacities as licensed insurance agents. You are under no obligation to engage the
services of any such recommended professional. You retain absolute discretion over all such
implementation decisions and are free to accept or reject any recommendation from us. At all times,
the engaged licensed professional[s] (i.e., attorney, accountant, etc.), and not Compton Wealth,
shall be responsible for the quality and competency of their services provided.
BOOKKEEPING SERVICES
We also offer general bookkeeping services to select clients. Clients are not under any obligation
to access these services.
MISCELLANEOUS
Limitations of Financial Planning and Non-Investment Consulting/Implementation Services.
As indicated above, to the extent requested by a client, we may provide financial planning and related
consulting services regarding non-investment related matters, such as education planning, estate
planning, tax and retirement planning, insurance planning, etc. as part of our investment management
services. We may also provide, upon client request, financial planning services pursuant to a separate
financial planning agreement. Compton Wealth does not serve as an attorney or accountant, and no
portion of its services should be construed as legal or accounting services. Accordingly, Compton
Wealth does not prepare estate planning documents or tax returns. To the extent requested by a client,
we may recommend the services of other professionals for certain non-investment implementation
purposes (i.e., attorneys, accountants, insurance agents, etc.), including certain of Compton Wealth’s
related persons in their separate individual capacities as licensed insurance agents. The client is under
no obligation to engage the services of any such recommended professional. The client retains
absolute discretion over all such implementation decisions and is free to accept or reject any
recommendation from Compton Wealth and/or its representatives. If the client engages any
recommended unaffiliated professional, and a dispute arises thereafter relative to such engagement,
the client agrees to seek recourse exclusively from and against the engaged professional. Neither
Compton Wealth, nor its investment adviser representatives, assist clients with the implementation
of any financial plan, unless they have agreed to do so in writing. Also, Compton Wealth does not
monitor a client’s financial plan, and it is the client’s responsibility to revisit the financial plan with
Compton Wealth, if desired. At all times, the engaged licensed professional(s) (i.e. attorney,
accountant, insurance agent, etc.), and not Compton Wealth, shall be responsible for the quality and
competency of the services provided. If the client engages any unaffiliated professional, and a dispute
arises thereafter relative to such engagement, the engaged professional (and not Compton Wealth)
shall remain exclusively responsible for resolving any such dispute with the client.
Conflict of Interest: The recommendation by Compton Wealth’s representative that a client
purchase an insurance commission product through Compton Wealth, presents a conflict of interest,
as the receipt of commissions may provide an incentive to recommend insurance products based on
commissions to be received, rather than on a particular client’s need. No client is under any
obligation to purchase any insurance commission products through Compton Wealth. Clients are
reminded that they may purchase insurance products recommended by Compton Wealth through
other non-affiliated insurance agencies.
Retirement Plan Rollovers – No Obligation / Conflict of Interest. A client or prospective client
leaving an employer typically has four options regarding an existing retirement plan (and may
engage in a combination of these options): (i) leave the money in the former employer’s plan, if
permitted, (ii) roll over the assets to the new employer’s plan, if one is available and rollovers are
permitted, (iii) roll over to an Individual Retirement Account (“IRA”), or (iv) cash out the account
value (which could, depending upon the client’s age, result in adverse tax consequences). If we
recommend that you roll over your retirement plan assets into an account to be managed by us, such
a recommendation creates a conflict of interest if we will earn a new (or increase its current)
advisory fee on the rolled over assets. If we provide a recommendation as to whether a client should
engage in a rollover or not (whether it is from an employer’s plan or an existing IRA), we are acting
as a fiduciary within the meaning of Title I of the Employee Retirement Income Security Act and/or
the Internal Revenue Code, as applicable, which are laws governing retirement accounts. No client
is under any obligation to roll over retirement plan assets to an account managed by Compton
Wealth, whether it is from an employer’s plan or an existing IRA.
Use of Mutual and Exchange Traded Funds. Most mutual funds and exchange traded funds are
available directly to the public. Thus, a prospective client can obtain many of the funds that may be
utilized by Compton Wealth independent of engaging us as an investment advisor. However, if a
prospective client determines to do so, he/she will not receive Compton Wealth’s initial and
ongoing investment advisory services.
In addition to Compton Wealth’s investment advisory fee described below, and transaction and/or
custodial fees discussed below, clients will also incur, relative to all mutual fund and exchange
traded fund purchases, charges imposed at the fund level (e.g. management fees and other fund
expenses).
Independent Managers. We may recommend that you allocate a portion of your investment assets
among unaffiliated independent investment managers (“Independent Manager(s)”) in accordance
with your designated investment objective(s). In such situations, the Independent Manager(s) will
have day-to-day responsibility for the active discretionary management of the allocated assets. We
will continue to render investment supervisory services to the client relative to the ongoing
monitoring and review of account performance, asset allocation, and client investment objectives.
We generally consider the following factors when recommending Independent Manager(s): the
client’s designated investment objective(s), management style, performance, reputation, financial
strength, reporting, pricing, and research. The investment management fees charged by the
designated Independent Manager(s) are exclusive of, and in addition to, our ongoing investment
advisory fee, subject to the terms and conditions of a separate agreement between the client and the
Independent Manager(s). Our advisory fee is set forth in the fee schedule at Item 5 below.
Asset-Based Pricing Arrangements and Limitations. Relative to Independent Manager
engagements (see above), we generally recommend clients enter an “Asset-Based” pricing
agreement with the account broker-dealer/custodian. Under an asset-based pricing arrangement,
the amount that a client will pay the custodian for account commission/transaction fees is based
upon a percentage (%) of the market value of the account, generally expressed in basis points and/or
a percentage. One basis point is equal to one one-hundredth of one percent (1/100th of 1%, or
0.01% (0.0001). This differs from transaction-based pricing, which assesses a separate
commission/transaction fee against the account for each account transaction. Account investment
decisions are driven by security selection and anticipated market conditions and not the amount of
transaction fees payable by you to the account custodian. Under either the asset-based or
transaction-based pricing scenario, the fees charged by the respective broker-dealer/custodian are
separate from, and in addition to, the advisory fee payable by you to us per Item 5 below. We do
not receive any portion of the asset-based transaction fees payable by you to the account custodian.
You are under no obligation to enter into an asset-based arrangement, and, if you do, you can
request at any time to switch from asset-based pricing to transactions-based pricing, However, there
can be no assurance that the volume of transactions will be consistent from year-to-year given
changes in market events and security selection. Thus, given the variances in trading volume, any
decision by the client to switch to transaction-based pricing could prove to be economically
disadvantageous.
eMoney Advisor Platform. We may provide you with access to an online platform hosted by
“eMoney Advisor” (“eMoney”). The eMoney platform allows you to view your complete asset
allocation, including those assets that we do not manage (the “Excluded Assets”). We do not
provide investment management, monitoring, or implementation services for the Excluded Assets.
Unless otherwise specifically agreed to in writing, our service, relative to the Excluded Assets, is
limited to reporting only. Therefore, we shall not be responsible for the investment performance of
the Excluded Assets. Rather, you and/or your advisor(s) that maintain management authority for
the Excluded Assets, and not Compton Wealth, shall be exclusively responsible for such investment
performance. Without limiting the above, we shall not be responsible for any implementation error
(timing, trading, etc.) relative to the Excluded Assets. You may choose to engage us to manage
some or all of the Excluded Assets pursuant to the terms and conditions of an Investment Advisory
Agreement between us and you, the client. The eMoney platform also provides access to other types
of information and applications including financial planning concepts and functionality,
which
should not, in any manner whatsoever, be construed as services, advice, or recommendations
provided by Compton Wealth. Finally, we shall not be held responsible for any adverse results you
may experience if you engage in financial planning or other functions available on the eMoney
platform without our assistance or oversight.
Custodian Charges-Additional Fees: As discussed below at Item 12, when requested to
recommend a broker-dealer/custodian for client accounts, we generally recommend that Charles
Schwab & Co, Inc. (“Schwab”) serve as the broker-dealer/custodian for client investment
management assets. Broker-dealers such as Schwab charge transaction fees for effecting certain
securities transactions (i.e., including transaction fees for certain mutual funds, and mark-ups and
mark-downs charged for fixed income transactions, etc.). The types of securities for which
transaction fees, commissions, and/or other type fees (as well as the amount of those fees) shall
differ depending upon the broker-dealer/custodian (while certain custodians, including Schwab, do
not currently charge fees on individual equity transactions or ETFs, others do). Please Note: there
can be no assurance that Schwab will not change its transaction fee pricing in the future. Please
Also Note: Schwab may also assess fees to clients who elect to receive trade confirmations and
account statements by regular mail rather than electronically. In addition to Compton Wealth’s
investment advisory fee referenced in Item 5 below, the client will also incur: (a) transaction fees
to purchase certain securities for the client’s account (i.e., mutual funds and fixed income securities
purchased by Compton Wealth and/or Independent Managers.)
Variable Annuities. If you own a variable annuity product, you can engage us to provide
investment management services relative to the investment subdivisions that comprise the variable
annuity product. Our investment selection shall be limited to those investments provided by the
variable annuity sponsor. If so engaged, we shall charge an ongoing advisory fee based upon the
market value of the assets per its fee schedule in Item 5 below. Please Note: Neither Compton
Wealth, nor any of its employees, offers to sell variable annuity products to its clients. Neither
Compton Wealth, nor any of its employees, are registered as, or associated with, a broker-dealer or
an insurance agency. If you seek to purchase or exchange a variable annuity product, we shall refer
you to an unaffiliated broker-dealer/insurance agency to advise on same, and if agreed upon by you,
engage the unaffiliated broker-dealer/insurance agency to purchase a new or exchange an existing
variable annuity product. Neither Compton Wealth, nor any of its employees, shall receive any
portion of the fees earned by the unaffiliated broker-dealer/insurance agency. Our only
compensation shall be limited to the management of the investment subdivisions that comprise the
variable annuity product, should the client engage us to do so. You are under no obligation to
engage us to provide such management services, nor are you under any obligation to consider
addressing variable annuity issues with the unaffiliated broker-dealer/insurance agency that may be
recommended by us. Please Also Note: Because we could earn an advisory fee on the variable
annuity assets, a potential conflict of interest arises in the event that we recommend you engage us
to provide investment management services on your variable annuity. Please Further Note:
Variable annuities are long-term investment products. Variable annuity product sponsors generally
impose financial penalties for early withdrawals as set forth in the variable annuity documents.
Thus, the client must consider such potential penalties prior to agreeing to exchange or purchase a
variable annuity product.
Cash Sweep Accounts. Account custodians generally require that cash proceeds from account
transactions or cash deposits be swept into and/or initially maintained in the custodian’s sweep
account. Schwab (as do its primary competitors that provide similar pricing arrangements) requires
that cash proceeds be applied to a Schwab bank sweep account, which proprietary Schwab bank
sweep account may not provide the highest return available. The yield on the sweep account is
generally lower than those available in money market accounts. To help mitigate this issue, we will
generally purchase a higher yielding money market fund available on the custodian’s platform with
cash proceeds or deposits, unless we reasonably anticipate that we will utilize the cash proceeds to
purchase additional investments for your account. Exceptions and/or modifications can and will
occur with respect to all or a portion of the cash balances for various reasons, including, but not
limited to, the amount of dispersion between the sweep account and a money market fund, the size
of the cash balance, an indication from you of an imminent need for such cash, or you have
demonstrated a history of writing checks from the account.
Please Note: The above does not apply to the cash component maintained within the Compton
Wealth’s actively managed investment strategy (the cash balances for which shall generally remain
in the custodian designated cash sweep account), an indication from the client of a need for access
to such cash, assets allocated to an unaffiliated investment manager, and cash balances maintained
for fee billing purposes. Please Also Note: The client shall remain exclusively responsible for yield
dispersion/cash balance decisions and corresponding transactions for cash balances maintained in
any of Compton Wealth’s unmanaged accounts.
Cybersecurity Risk. The information technology systems and networks that Compton Wealth and
its third-party service providers use to provide services to Compton Wealth’s clients employ various
controls, which are designed to prevent cybersecurity incidents stemming from intentional or
unintentional actions that could cause significant interruptions in Compton Wealth’s operations and
result in the unauthorized acquisition or use of clients’ confidential or non-public personal
information. Clients and Compton Wealth are nonetheless subject to the risk of cybersecurity
incidents that could ultimately cause them to incur losses, including for example: financial losses,
cost and reputational damage to respond to regulatory obligations, other costs associated with
corrective measures, and loss from damage or interruption to systems. Although Compton Wealth
has established its processes to reduce the risk of cybersecurity incidents, there is no guarantee that
these efforts will always be successful, especially considering that Compton Wealth does not
directly control the cybersecurity measures and policies employed by third-party service providers.
Clients could incur similar adverse consequences resulting from cybersecurity incidents that more
directly affect issuers of securities in which those clients invest, broker-dealers, qualified
custodians, governmental and other regulatory authorities, exchange and other financial market
operators, or other financial institutions.
Margin / Securities Based Loans. We do not generally recommend the use of margin loans or
securities-based loans (collectively, “SBLs”) as an investment strategy, in which you would
leverage borrowed assets as collateral for the purchase of additional securities. However, we may
recommend that you establish a margin account with your broker-dealer/custodian or your affiliated
banks (each, an “SBL Lender”) to access SBLs for financial planning and cash flow management
purposes. For example, we may deem it advisable for a client to borrow money on margin to pay
bills or other expenses such as financing the purchase, construction, or maintenance of a real estate
project. Unlike a traditional real estate-backed loan, an SBL has the potential benefit of enabling
borrowers to access to funds in a shorter period of time, providing greater repayment flexibility,
and may also result in the borrower receiving certain tax benefits. Clients interested in learning
more about the potential tax benefits of borrowing money on margin should consult with an
accountant or tax advisor.
The terms and conditions of each SBL are contained in a separate agreement between the client and
the SBL Lender selected by the client, which terms and conditions may vary from client to client.
Borrowing funds on margin is not suitable for all clients and is subject to certain risks, including
but not limited to: increased market risk, increased risk of loss, especially in the event of a
significant downturn; liquidity risk; the potential obligation to post collateral or repay the SBL if
the SBL Lender determines that the value of collateralized securities is no longer sufficient to
support the value of the SBL; the risk that the SBL Lender may liquidate the client’s securities to
satisfy its demand for additional collateral or repayment / the risk that the SBL Lender may
terminate the SBL at any time. Before agreeing to participate in an SBL program, clients should
carefully review the applicable SBL agreement and all risk disclosures provided by the SBL Lender
including the initial margin and maintenance requirements for the specific program in which the
client enrolls, and the procedures for issuing “margin calls” and liquidating securities and other
assets in the client’s accounts.
Unaffiliated Private Investment Funds. Compton Wealth also provides investment advice
regarding private investment funds. Compton Wealth, on a non-discretionary basis, may
recommend that certain qualified clients consider an investment in private investment funds, the
description of which (the terms, conditions, risks, conflicts and fees, including incentive
compensation) is set forth in the fund’s offering documents. Our role relative to unaffiliated private
investment funds shall be limited to its initial and ongoing due diligence and investment monitoring
services. If a client determines to become an unaffiliated private fund investor, the amount of assets
invested in the fund(s) shall be included as part of “assets under management” for purposes of
Compton Wealth calculating its investment advisory fee. Compton Wealth’s fee shall be in addition
to the fund’s fees. Compton Wealth’s clients are under absolutely no obligation to consider or make
an investment in any private investment fund(s).
Please Note: Private investment funds generally involve various risk factors, including, but not
limited to, potential for complete loss of principal, liquidity constraints and lack of transparency, a
complete discussion of which is set forth in each fund’s offering documents, which will be provided
to each client for review and consideration. Unlike liquid investments that a client may own, private
investment funds do not provide daily liquidity or pricing. Each prospective client investor will be
required to complete a Subscription Agreement, pursuant to which the client shall establish that
he/she is qualified for investment in the fund and acknowledges and accepts the various risk factors
that are associated with such an investment.
Valuation. In the event that Compton Wealth references private investment funds owned by the
client on any supplemental account reports prepared by Compton Wealth, the value(s) for all private
investment funds owned by the client shall reflect the most recent valuation provided by the fund
sponsor. However, if after purchase, the fund has not provided an updated valuation, the valuation
shall reflect the initial purchase price. If after purchase, the fund provides an updated valuation,
then the statement will reflect that updated value. The updated value will continue to be reflected
in the report until the fund provides a further updated value. As result of the valuation process, if
the valuation reflects initial purchase price or an updated value after purchase price, the current
value(s) of an investor’s fund holding(s) could be significantly more or less than the value reflected
on the report. Unless otherwise indicated, Compton Wealth shall calculate its fee based upon the
latest value provided by the fund sponsor.
Socially Responsible Investing Limitations. Socially Responsible Investing involves the
incorporation of Environmental, Social and Governance considerations into the investment due
diligence process (“ESG”). ESG investing incorporates a set of criteria/factors used in evaluating
potential investments: Environmental (i.e., considers how a company safeguards the environment);
Social (i.e., the manner in which a company manages relationships with its employees, customers,
and the communities in which it operates); and Governance (i.e., company management
considerations). There are potential limitations associated with allocating a portion of an investment
portfolio in ESG securities (i.e., securities that have a mandate to avoid, when possible, investments
in such products as alcohol, tobacco, firearms, oil drilling, gambling, etc.) The number of
companies that meet an acceptable ESG mandate can be limited when compared to those that do
not and could underperform broad market indices. Investors must accept these limitations,
including the potential for underperformance. Correspondingly, the number of ESG mutual funds
and exchange-traded funds are limited when compared to those that do not maintain such a mandate.
As with any type of investment (including any investment and/or investment strategies
recommended and/or undertaken by Compton Wealth), there can be no assurance that investment
in ESG securities or funds will be profitable or prove successful. We do not maintain or advocate
an ESG investment strategy but will seek to employ ESG if directed by a client to do so. If
implemented, we shall rely upon the assessments undertaken by the unaffiliated mutual fund,
exchange traded fund or separate account portfolio manager to determine that the funds or
portfolio’s underlying company securities meet a socially responsible mandate.
Cash Positions. Compton Wealth continues to treat cash as an asset class. As such, unless
determined to the contrary by Compton Wealth, all cash positions (money markets, etc.) shall
continue to be included as part of assets under management for the purposes of calculating Compton
Wealth’s advisory fee. At any specific point in time, depending upon perceived or anticipated
market conditions/events (there being no guarantee that such anticipated market conditions/events
will occur), Compton Wealth may maintain cash positions for defensive purposes. In addition,
while assets are maintained in cash, such amounts could miss market advances. Depending upon
current yields, at any point in time, Compton Wealth’s advisory fee could exceed the interest paid
by the client’s money market fund.
Client Obligations. In performing its services, we shall not be required to verify any information
received from you or from your other professionals and are expressly authorized to rely thereon.
Moreover, each client is advised that it remains their responsibility to promptly notify us if there is
ever any change in their financial situation or investment objectives for the purpose of reviewing,
evaluating or revising our previous recommendations and/or services.
Disclosure Brochure. A copy of this written ADV Part 2 Brochure along with our Form CRS
Relationship Summary, shall be provided to each client prior to, or contemporaneously with, the
execution of the Investment Advisory Agreement, Retirement Plan Services Agreement or
Financial Planning and Consulting Agreement.
Compton Wealth shall provide investment advisory services specific to the needs of each client.
Prior to providing investment advisory services, an investment adviser representative will ascertain
each client’s investment objective(s). Thereafter, Compton Wealth shall allocate and/or recommend
that the client allocate investment assets consistent with the designated investment objective(s). The
client may, at any time, impose reasonable restrictions, in writing, on Compton Wealth’s services.
Compton Wealth does not participate in a wrap fee program.
As of December 31, 2023, Compton Wealth had $529,860,799in assets under management on a
discretionary basis and $107,320,849 in assets under management on a non-discretionary basis.