We offer wrap fee programs as described in this Wrap Fee Program Brochure. Our wrap fee accounts
are managed on an individualized basis according to the client’s investment objectives, financial
goals, risk tolerance, etc.
A wrap fee program allows our clients to pay a specified fee for investment advisory services and the
execution of transactions. The advisory services may include portfolio management and the fee is not
based directly upon transactions in your account. Your fee is bundled with our costs for executing
transactions in your account(s). This results in a higher advisory fee to you. We do not charge our
clients higher advisory fees based on their trading activity, but you should be aware that we may
have an incentive to limit our trading activities in your account(s) because we are charged for
executed trades. By participating in a wrap fee program, you may end up paying more or less than
you would through a non-wrap fee program where a lower advisory fee is charged, but trade
execution costs are passed directly through to you by the executing broker.
Our recommended custodians, Charles Schwab & Co. Inc. (“Schwab”) and Altruist Financial, LLC
(Altruist”), do not charge transaction fees for U.S. listed equities and exchange traded funds. Since we
pay the transaction fees charged by the custodian to clients participating in our wrap fee program,
our firm’s expenses have decreased. This presents a conflict of interest because we are incentivized
to recommend equities and exchange traded funds over other types of securities to reduce our costs.
Wrap Comprehensive Portfolio Management:
Our wrap comprehensive portfolio management service encompasses asset management as well as
providing financial planning/financial consulting to clients. It is designed to assist clients in meeting
their financial goals through the use of financial investments. We conduct at least one, but sometimes
more than one meeting (in person if possible, otherwise via telephone conference) with clients in
order to understand their current financial situation, existing resources, financial goals, and
tolerance for risk. Based on what we learn, we propose an investment approach to the client. We may
propose an investment portfolio, consisting of exchange traded funds, mutual funds, individual
stocks or bonds, or other securities. Upon the client’s agreement to the proposed investment plan,
we work with the client to establish or transfer investment accounts so that we can manage the
client’s portfolio. Once the relevant accounts are under our management, we review such accounts
on a regular basis and at least annually. We may periodically rebalance or adjust client accounts
under our management. If the client experiences any significant changes to his/her financial or
personal circumstances, the client must notify us so that we can consider such information in
managing the client’s investments.
Our wrap comprehensive portfolio management service is available to clients with at least
$3,000,000 in assets under management.
Fee Schedule
The maximum annual fee charged for this service will not exceed 0.80%. Our firm’s fees are billed
on a pro-rata annualized basis quarterly in advance based on the value of your account on the
last day of the previous quarter. Our firm bills on cash unless indicated otherwise in writing. Fees
ADV Part 2A, Appendix 1 – Wrap Fee Brochure Page 5 Private Wealth Management of North
Carolina
to be assessed will be outlined in the advisory agreement to be signed by the client. Our firm’s
fees are generally negotiable. As part of this process, the client is made aware of the following:
a) Your independent custodian sends statements at least quarterly to you showing the
market values for each security included in the Assets and all disbursements in your
account including the amount of the advisory fees paid to us;
b) You provide authorization permitting us to be directly paid by these terms. We send our
invoice directly to the custodian;
c) It is the client’s responsibility to verify the calculation of advisory fees deducted from the
account; and
d) If we send a copy of our invoice to you, a legend urging you to compare information
provided in our statement with those from the qualified custodian will be included.
Pontera
Participant Account Management (Discretionary) – We use a third party platform to facilitate
management of held away assets such as defined contribution plan participant accounts, with
discretion. The platform allows us to avoid being considered to have custody of client funds since we
do not have direct access to Client log-in credentials to affect trades. We are not affiliated with the
platform in any way and receive no compensation from them for using their platform. A link will be
provided to the Client allowing them to connect an account(s) to the platform. Once Client account(s)
is connected to the platform, Adviser will review the current account allocations. When deemed
necessary, Adviser will rebalance the account considering client investment goals and risk tolerance,
and any change in allocations will consider current economic and market trends. The goal is to
improve account performance. Client account(s) will be reviewed at least quarterly and allocation
changes will be made as deemed necessary.
Other Types of Fees & Expenses
You may pay custodial fees, charges imposed directly by a mutual fund, index fund, or exchange
traded fund which shall be disclosed in the fund’s prospectus (i.e., fund management fees and other
fund expenses), mark-ups and mark-downs, spreads paid to market makers, wire transfer fees and
other fees and taxes on brokerage accounts and securities transactions. These fees are not included
within the wrap-fee you are charged by our firm.
Our investment advisory representatives receive a portion of the advisory fee that you pay us, either
directly as a percentage of your overall fee or as their salary from our firm. In cases where our
investment advisory representatives are paid a percentage of your overall advisory fee, this may
create an incentive to recommend that you participate in a wrap fee program rather than a non-wrap
fee program (where you would pay for trade execution costs) or brokerage account where
commissions are charged. This is because, in some cases, we may stand to earn more compensation
from advisory fees paid to us through a wrap fee program arrangement if your account is not actively
traded.
Pontera
Our firm does not charge an additional fee for held away assets such as defined contribution plan
participant accounts. Pontera charges a 0.25% fee for those assets. Our firm will not charge clients
the 0.25% Pontera fee and will cover the additional cost of this service.
ADV Part 2A, Appendix 1 – Wrap Fee Brochure Page 6 Private Wealth Management of North Carolina