Firm Overview
A. Description of Firm
Highline Wealth Partners (“Highline”) is a Los Angeles, California-based investment advisory
firm, founded in 1976 under the name of Charlesworth & Rugg, Inc. Now known as
Charlesworth & Rugg, Inc. dba Highline Wealth Partners (“Highline”), Highline offers financial
planning and investment management services to individuals, high net worth individuals, trusts,
estates, foundations, pension and profit-sharing plans, and various business entities like
corporations, partnerships, nonprofits, and limited liability companies.
The Firm is currently registered with the U.S. Securities and Exchange Commission (“SEC”) as
an investment adviser and conducts business in states where Highline is either “notice filed” or
exempt from registering or notice filing. Our registration and notice filing status can be found in
Part 1 of the Firm’s Form ADV, a copy of which can be found on www.adviserinfo.sec.gov.
Jonathan Rugg, CFA, is the majority owner and President of the Firm.
B. Types of Advisory Services Offered
Highline provides advice to clients with respect to the purchase and sale of no-load and/or load-
waived mutual funds, exchange traded funds (ETFs), interval funds, closed end funds, individual
bonds, individual stocks, new client’s existing securities, or any other investments deemed
appropriate by the investment committee (collectively, the “Investments”). Additionally,
Highline provides information on certain less liquid, alternative investment vehicles for investors
who meet the regulatory qualifying requirements for investment in those strategies. This mandate
is captured in the Firm’s Investor Services, Private Wealth Management, and Family Office
services (collectively referred to as the “Individual Services”).
Additionally, the Firm offers Financial Planning Services which can be a stand-alone consulting
service or a complement to any of the Individual Services. This service includes an in-depth
analysis of a client’s financial and life objectives, current financial position, financial strengths
and weaknesses, and various financial planning components agreed upon by the client and
advisor. These components include investment planning, estate planning, retirement planning,
education planning, income tax planning and risk management planning activities.
Finally, Highline offers corporate consulting services called Corporate Services. This service
provides advice and recommendations to business owners with respect to 401(k) and other
ERISA retirement plan sponsors, non-qualified deferred compensation plans, stock option plans,
executive financial planning, and other risk management, corporate benefits, or tax strategies.
This service does not provide personal investment advice to individual plan participants within
the plans offered by the plan sponsor.
Across all Individual Services, Highline is given limited authority to direct a custodian
designated by the client, normally a discount brokerage firm, bank trust department, or trust
company, to invest client assets into securities which we select. In some cases, clients give us
limited investment authority to allocate assets under our advisement or management among
funds in one or more specific fund families. Finally, a client within the Individual Services may
engage us to provide investment advice on a non-discretionary basis, with the client approving
recommendations, or implementing or directing all investment decisions for the account
themselves.
For all Individual Services, our goal is to help achieve the client stated investment objective(s) of
each client.
Client portfolios are monitored, and transactions are implemented in accordance with the
previously determined suitability, risk tolerance, and investment objective(s) of each client. We
ask clients within these programs to provide us with important background information such as
the additional assets and investments they may own as well as other relevant financial, personal
and family circumstances. On occasion, clients within any program may impose restrictions on
the purchase or sale of certain securities. We rely upon written (or certain verified electronic)
notification from clients whenever important changes occur in this background information, or
with any restrictions placed on the purchase or sale of certain securities.
For Corporate Services, Highline typically recommends to the company plan sponsor a list of
mutual funds and model portfolios for inclusion within the plan for all qualified and non-
qualified plans. After obtaining the plan sponsor’s approval, the Firm may then direct the plan
record-keeper to implement the recommendations by making this pre-approved list of funds and
model portfolios available to plan participants. Within this program, our goal is to assist the plan
sponsor by providing a comprehensive list of investment options that is made available to the
individual plan participants. This advice is tailored to each Corporate Services client in
accordance with the Investor Policy Statement, which is jointly agreed upon by both the client
and Highline. Clients within Corporate Services may impose restrictions on the selection of
certain securities.
Highline offers six different investment advisory services:
(1) Investor Services
(2) Private Wealth Management
(3) Family Office Services
(4) Corporate Services
(5) Real Estate Investment Advisory Services
(6) Financial Planning Services
The first five services are overseen by the Investment Committee, which evaluates the
investments, general economic and investment conditions, and specific research goals and
objectives. The committee is currently composed of four voting members – Jonathan Rugg,
CFA, Shawn Hsieh, CFP, CFA, Hugh Meyer, and Rich Barnett, CFA, CAIA (collectively, the
“Investment Committee”). Each member contributes their own research, analysis, and judgment
with the goal of enhancing Highline’s investment decision making process. While a unanimous
decision is not required by the committee, the process often results in general consensus and
agreement among the members. The Committee’s recommendations and ideas are intended to
assist in the final decisions for the Firm’s investment programs. An Investment Committee
meeting may be called by any voting member with at least one day’s notice to the other
members. These meetings may occur via a conference call or video conference.
The sixth service, Financial Planning Services, operates in accordance with Highline’s Financial
Planning Agreement and our compliance policies and procedures. Plans and other work products
produced within this line of business are supervised by Ms. Jamie Rugg, Certified Financial
Planner™ and financial planning practitioner.
(1) Investor Services
Through Investor Services, Highline provides investment management services to clients.
Investor Services consists of custom portfolios tailored to meet the specific investment objectives
of each client. We may select any mutual fund, ETF, or other investment for inclusion into client
portfolios. Clients choose from one of seven investment objectives according to their willingness
and ability to bear risk. Clients within the same investment objective will seldom, if ever, have
the exact same funds in the same proportions. However, clients within the same investment
objective will have very similar, and possibly identical, funds and very similar, and possibly
identical, fund allocations. If restrictions have been placed on any account, the funds selected,
and the asset allocations may differ substantially. The Firm’s seven investment objectives are
listed and described further in Item 8 of this Brochure.
Correspondence and reports are delivered electronically to all clients within Investor Services.
In addition, there may be telephonic meetings rather than in-person meetings for clients within
Investor Services. If clients have questions regarding their account(s), they may call the office.
The initial minimum account size for the Investor Services is $200,000. We may make
exceptions to this, at our discretion, if the newly established accounts have the potential to
exceed these amounts within a reasonable period due to additional contributions.
All final asset allocation, timing, and investment selection decisions and recommendations are
made by the Investment Committee.
(2) Private Wealth Management
Private Wealth Management provides investment management services combined with full
financial planning and advanced estate planning strategies to clients. Like Investor Services,
Private Wealth Management normally consists of custom portfolios tailored to meet the specific
investment objectives of each client.
Private Wealth Management also may access less liquid, more speculative alternative investment
vehicles which are not available to Investor Services clients. These decisions are made after
going through a rigorous planning and due diligence process to validate that these investments
are a suitable option for clients. In instances where a client is interested in such alternative
investments, Highline will ensure such clients are accredited investors and/or qualified
purchasers as those terms are defined in Rule 501 of Regulation D of the Securities Act of 1933
and Rule 205-3 of the Investment Advisers Act, respectively.
All final asset allocation, timing, and investment selection decisions and recommendations are
made by the Investment Committee.
The initial minimum account size for Private Wealth Management is $1,000,000. We can make
exceptions to this, at our discretion, if the newly established accounts have the potential to
exceed these amounts within a reasonable period due to additional contributions.
(3) Family Office Services
Highline provides a line of business called Family Office Services. These services are geared
towards growing wealth and preserving it for generations to come. These advanced planning
strategies may range from cash flow management to advanced tax and estate strategies to
educating younger generations on financial matters.
Clients within our Family Office Services have access to all Investor Services and Private
Wealth Management services plus additional investment opportunities in private equity and other
types of alternative investments. In instances where a client is interested in such alternative
investments, Highline will ensure such clients are accredited investors and/or qualified
purchasers as those terms are defined in Rule 501 of Regulation D of the Securities Act of 1933
and Rule 205-3 of the Investment Advisers Act, respectively. Highline may also perform select
due diligence on family directed private transactions for Family Office Services clients as well.
All final asset allocation, timing, and investment selection decisions and recommendations are
made by the Investment Committee.
The initial minimum account size for Family Office Services is $10,000,000. We may make
exceptions to this minimum, at our discretion, if the newly established accounts have the
potential to exceed these amounts within a reasonable period due to additional contributions.
Certain clients within Investor Services, Private Wealth Management, and Family Office
Services may ask our Firm to manage a given portfolio to achieve a specific objective without
divulging (for various reasons) their complete list of financial assets and investments or other
relevant personal or financial circumstances. These clients, like all our clients, must complete the
Highline Client Confidential Profile form. For those clients who decline to provide information
regarding their non-Highline managed portfolios, it is important to answer the questions in the
Client Confidential Profile which identify the approximate allocations of other assets not
managed by Highline. This helps the Firm better understand the suitability of the investment
objective chosen by the client with respect to their overall financial circumstances.
(4) Corporate Services
Within Corporate Services, Highline can provide any or all of the following services to corporate
clients and their employees.
A. Qualified Retirement Plans including 401(k), 403(b), 457, pension, and profit-sharing
plans.
Highline creates an investment lineup from investments located within one or several of the
following three potential categories of investment options:
1) Model Portfolios
2) Target Date Funds
3) Individual Mutual Fund Lineup
Plan participants may then select any combination of model portfolios, target date funds, or non-
target date funds depending on the investment lineup of that particular plan (from the Individual
Mutual Fund Lineup) to create their own individual portfolio.
The platform
contains a collection of pre-screened no-load and/or load-waived mutual funds.
Clients often allow their plan participants to choose a combination of mutual funds and/or model
portfolios from the above three investment categories. Thus, an individual participant may
create a portfolio that consists of any combination of model portfolios, target date funds, and
non-target date mutual funds taken from the Individual Mutual Fund Lineup. This gives plan
sponsors and participants the flexibility to create a customized portfolio based upon their
personal preferences and for participants, their willingness and ability to bear risk. However,
since each plan participant makes individual allocation decisions and fund selection decisions
independent of Highline, the Firm is not responsible for the performance of personal retirement
plan portfolios created by individual plan participants.
All investment lineup-related decisions for all retirement plans are made by the Investment
Committee.
Highline offers assistance to clients in the following areas: 1) creation of an Investment Policy
Statement 2) selection of Qualified Default Investment Alternatives (“QDIA”), 3) acting as the
3(38) ERISA fiduciary investment manager, 4) evaluating, selecting, and monitoring all
investment options offered to participants, 5) potentially managing model portfolios on behalf of
the client and plan participants if selected to do so, and 6) providing education to plan
participants during selected review meetings.
Portfolios are monitored on a regular basis and utilize the same criteria that are employed
during the initial selection of investment options. This process consists of following pre-
defined quantitative screening procedures and employing the judgment of Highline on an
ongoing basis. If, upon evaluation, an investment option continues to be acceptable, no
further action is required. If Highline determines that the option is not acceptable, removal
of the investment option may result.
To assist in this overall decision-making process, Highline utilizes a third-party research service
run by Fi360 which specializes in providing investment monitoring services for the retirement
plan industry. These reports help in the ongoing evaluation, selection, and monitoring of funds
available in the investment lineup.
Correspondence and reports are typically delivered electronically to all Corporate Services
clients (i.e. plan sponsors). In addition, there is typically an annual in-person (or virtual webinar)
meeting for clients and their plan participants.
The initial minimum account size for retirement plans within Corporate Services is $2,000,000.
We may make exceptions to this minimum account size, at our discretion, if the newly
established account has the potential to exceed this amount within a reasonable time-period due
to additional contributions.
Plan sponsors within Corporate Services must complete the Highline Corporate Client Profile.
In addition, Highline will work with the plan sponsor to create an Investor Policy Statement
(“IPS”), which is intended to assist both the plan sponsor and Highline in making investment-
related decisions and recommendations, as applicable, in a prudent manner. The IPS outlines the
general processes for the selection, monitoring, and evaluation of the investments in the plan, as
well as the monitoring of investment-related services.
Highline also assists and educates plan sponsors on fiduciary responsibilities and compliance
procedures.
B. Executive Compensation - supports Clients by designing and implementing executive
compensation plans for the purpose of attracting, retaining, and rewarding their most
valuable asset, their employees. These Executive Compensation packages include Non-
Qualified Deferred Compensation plans and Equity Stock Plans providing comprehensive
incentives aligning the company’s success with key employees’ future compensation.
C. Risk Management Strategies - helps Clients reduce annual costs associated with
employee and customer related settlements while preparing for catastrophic events
resulting from loss of key employees that will cause a severe strain on operations. The
implementation of these various strategies may utilize insurance-based analysis of Key
Man Insurance, Disability Insurance, Buy/Sell Insurance and General liability.
D. Tax Efficiency Strategies - explores ways to align company operations with government
sponsored programs encouraging innovation and expansion which may include Cost
Segregation analysis, Research and Development Credits, Utility Auditing, and other
business deductions.
E. Legacy Consulting - helps preserve and leverage our clients’ largest asset for future
generations in the most tax efficient manner. This service may include Buy-Sell
Analysis, Succession Planning, and Business Valuation.
(5) Real Estate Investment Advisory Services
Highline offers private real estate services to select clients which may include the following
investment opportunities:
1. Limited Partnerships.
a. Highline conducts due diligence on real estate strategies that may include the
purchase of commercial or residential real estate property or properties, real estate
loans, bridge loans, or mezzanine debt strategies, and various other real estate
strategies. These opportunities may be in the form of a Limited Partnership,
interval fund, open ended evergreen fund, or other investment structures. Once
approved by the Investment Committee, Highline will recommend these
opportunities to select clients who meet the accredited investor, qualified client,
or qualified purchaser1 requirements set by the various partnerships.
2. Direct Real Estate Investment.
a. Highline can also oversee the acquisition and management of specific commercial
properties that a client chooses to own. As part of our services, Highline directs
all aspects of the management for each property including operations,
development, financing, leasing, and capital improvements. This option allows
clients to control the buying, selling, major capital renovation, and be involved in
budget decisions.
3. Real Estate Consulting.
a. Highline can also provide real estate consulting services which may include the
analysis, valuation, and due diligence of real estate opportunities as requested by a
client. This is performed on a case-by-case basis.
(6) Financial Planning Services
Highline’s Financial Planning Services are intended to be a collaborative process between the
Firm and our Clients. The intention is to help maximize a client’s potential for meeting life goals
through Financial Advice that integrates relevant elements of the Client’s personal and financial
circumstances.
1 As each term is defined in Rule 501 of Regulation D of the Securities Act of 1933, Rule 205-3 of the Investment
Advisors Act, and Section 2(a)(51) of the Investment Company Act, respectively.
This service includes an analysis of a client’s financial and life objectives, current financial
position, investment, estate and risk management planning activities, and financial strengths and
weaknesses. Where appropriate, Highline will attempt to coordinate with licensed experts such
as tax attorneys, trust and estate attorneys, and insurance providers to assist in evaluating the
many aspects of a client’s concerns.
Highline’s financial planning process follows the agreed upon Financial Planning Services
contract and seeks to provide the following services:
1) Understand the Client’s Personal and Financial Circumstances
2) Identify and Select Goals
3) Analyze the Client’s Current Course of Action and Potential Alternative Course(s) of
Action
4) Develop the Financial Planning Recommendations
5) Present the Financial Planning Recommendations
6) Implement the Financial Planning Recommendations where agreed upon and
applicable
7) Monitor Progress and Update an ongoing plan as agreed upon in the Financial
Planning Services Contract
As part of the Financial Planning Services, Highline will outline some general approaches to
bring financial activities more in line with the overall objectives of each client. Financial
Planning Services fees are based on a rate of $250 per hour, although an estimate is typically
quoted in advance of entering a Financial Planning contract. The Financial Planning contract
outlines the scope of the engagement and the financial planning areas to be included as agreed
upon by client and Highline. In most cases, the contract terminates upon delivery of the financial
plan. If upon termination the client elects to become a client of the Firm’s Private Wealth
Management or Family Office Services, they will then become an on-going client of Financial
Planning Services and receive future Financial Planning Services at no additional charge. If the
client continues to receive such services, their existing financial plan will be updated annually or
when material changes occur that should be reflected in the plan. However, an analysis
performed for a specific situation will not be updated once it has been resolved.
There is no minimum account size for Financial Planning Services. This service is advisory in
nature and no discretionary powers are given to Highline or Highline advisers.
There is a conflict of interest because there is an incentive for advisors offering Financial
Planning Services to recommend any of Highline’s five investment advisory services for which
the Firm receives compensation. Financial Planning Services clients are under no obligation to
act upon any recommendations of the Firm, or to execute any transactions through Highline or an
associated person if they decide to follow the recommendations. If clients wish to implement
any recommendation, clients may select any brokerage firm, private investment firm, insurance
agency, broker, or carrier, bank, or any other financial service institution.
Other Services
Occasionally, members of our Firm may be asked to present lectures on investments or
economics, to evaluate individual securities, markets, or industries or to evaluate other factors
related to the valuation, timing and selection of securities or other assets.
Retirement Plan Participant Account Management with Pontera: Highline utilizes a third-party
platform named Pontera (formerly FeeX) to facilitate management of held away assets such as
defined contribution plan participant accounts, with discretion. As with Highline’s other services,
we do not have custody of client funds. Additionally, we do not have access to Client log-in
credentials to initiate trades. The use of the third-party platform allows us to provide investment
assistance on a discretionary basis while limiting our access to investment related information
only. We are not affiliated with the platform in any way and receive no compensation from them
for using their platform.
If Highline refers a client or prospective client to a third-party service provider, Highline does
not receive referral fees or any other compensation contingent on, or generated by, the sale of
products or provision of services by such third parties.
Highline may receive referrals from third parties for which we do not pay referral fees.
A. Advisory Agreements
1. Information Received by Individual Clients
At the onset of the client relationship, Highline gathers information on each client’s investment
objectives, risk tolerance, time horizons and financial goals. Highline does not assume
responsibility for the accuracy of the information provided by the client and is not obligated to
verify any information received from the client or from any of the client’s other professionals
(e.g., attorney, accountant, etc.). Under all circumstances, clients are responsible for promptly
notifying Highline in writing of any material changes to the client’s objectives, risk tolerance,
time horizon, and financial goals.
2. Client Agreements and Disclosures
Each client is required to enter into a written Investment Advisor Agreement with Highline
setting forth the terms and conditions under which the Firm shall render its services. In
accordance with applicable laws and regulations, Highline will provide its disclosure brochure
(ADV Part 2A), brochure supplement (ADV Part 2B), Client Relationship Summary (Form
CRS-ADV Part 3), and most recent Privacy Policy Notice to each client prior to or
contemporaneously with the execution of the Investment Advisor Agreement. Neither Highline
nor the client may assign the Investment Advisor Agreement without the written consent of the
other party.
B. Amount of Client Assets Under Management
As of December 31, 2023, the total regulatory assets (“AUM”) managed by Highline was
approximately $493,669,000; $493,129,000 in discretionary AUM, and $540,000 in non-
discretionary AUM.