A. Description of Advisory Firm
Selective Wealth Management, Inc. is a corporation organized in the State of Delaware. The Firm
was formed during June of 2012 in VA and was incorporated in DE during November of 2018.
B. Types of Advisory Services
Selective Wealth Management, Inc. (hereinafter the Firm or Selective) offers the following services
to advisory clients:
Advisory Services
Comprehensive Wealth Management
Selective provides comprehensive wealth management through a team of professionals to cover
financial planning, investment management, estate planning, tax strategies, lifestyle protection, and
charitable giving.
Financial Planning is a broad category consisting of account titling, gifting, strategies for income
generation, education planning, retirement goal setting, social security and pension reviews,
conversion analysis, estate planning, cash flow analysis, drawdown analysis, and more.
Investment Management deals specifically with asset allocation and structuring a portfolio that is
consistent with unique goals and objectives. Generally, Selective looks for investment options that
are low-cost, tax-efficient, diversified, transparent, commission free, and have little or no debt.
Estate Planning is about ensuring your assets provide the legacy you want. Selective coordinates
with your estate attorney to assist in protecting your assets, maintaining your privacy, avoiding
probate, and managing asset division.
Tax Strategies focus on optimizing your personal situation to minimize your tax burden. Selective
focuses on IRA conversions, tax-loss harvesting, lifetime gifting strategies, state specific tax credits
and more. Selective does not prepare or file taxes, but assists in overall analysis.
Lifestyle Protection is about reviewing and analyzing your current insurance coverages in light of
your unique needs. Selective does not sell insurance, but can review your policies and recommend
potential alternatives. Selective seeks to ensure that you don’t just get the best rates, but rather the
best rates for the appropriate coverage.
Charitable Giving entails helping individuals determine what they are passionate about and then
ensuring they are gifting efficiently. From lifetime gifting strategies, qualified charitable
distributions, unique trusts, and more – Selective is here to help.
Selective offers varying levels of the services mentioned above on a discretionary basis but is
normally limited to relationships with at least $500,000 in assets under management. Selective
reserves the right to provide tiered services based on account sizes, and therefore may require
different types of information from clients when creating an Investment Policy Statement or
financial plan.
Separately Managed Accounts
The Firm offers ongoing portfolio management services based on client specific investment
objectives, risk tolerances, and financial information.
The Firm creates an Investment Policy Statement and/or a financial plan for each client, which
outlines specific individual situations (income, tax levels, and risk tolerance levels), and then
ensures the investment plan is suitable for the prospective client based on gathered data.
Investment Supervisory Services include, but are not limited to, the following:
• Investment strategy
• Personal investment policy
• Asset allocation
• Asset selection
• Risk tolerance
• Regular portfolio monitoring
The Firm will request discretionary authority from clients to select securities and execute
transactions without permission from the client prior to each transaction. However, where
reasonable the Firm will seek pre-approval from clients with regards to proposed portfolio creation
or adjustments. Selective will seek to ensure that allocations and investment strategies are
applicable for clients by completing, risk tolerance questionnaires, financial plans, and/or
investment policy statements. Client may request non-discretionary management and may be
incorporated directly into a client’s investment advisory contract.
Stand-alone financial planning engagements
Selective provides stand-alone financial planning services for individuals who do not want to
engage Selective for investment management and on-going support. Individuals are able to engage
Selective in either modular or comprehensive financial plans. All planning engagements are one-
time and terminate upon the delivery of outlines materials or advice.
Modular financial planning is based on a single area of concern for a client i.e. retirement,
investments, estate or other single client goals. Selective may deliver a written
plan or provide verbal consultations.
Comprehensive financial plans cover our six key areas of comprehensive wealth management, but
after advice is given the engagement is terminated.
Some comprehensive financial plans can include
an online wealth management portal that allows the client to consolidate and view financial data to
include banking accounts, bills, insurance, and investment accounts. The client monitors the wealth
management portal and makes online updates to the data. Selective personnel do not have access to
client online login and password information for their financial accounts. This portal provides real-
time access to net worth updates, consolidated investment analysis, financial goal progress, and
account aggregation.
Services Limited to Specific Types of Investments
The Firm seeks to construct portfolios that are designed to meet the goals and objectives of each
client. With that in mind, the Firm may utilize a variety of investment products including Equity
ETFs, Fixed Income ETFs, individual equities, options (primarily covered calls), and US Treasuries.
However, when applicable, the Firm may use other securities as well to develop a portfolio suitable
for each specific client.
C. Client Tailored Services and Client Imposed Restrictions
The Firm provides advice that is tailored to the individual needs of the client based on the financial
information and the investment objective(s) communicated by the client. Clients may impose
reasonable restrictions on investing in certain securities or groups of securities by notifying the
Firm in writing.
Clients may impose restrictions in investing in certain securities or types of securities in accordance
with their values or beliefs. However, if the restrictions prevent the Firm from properly servicing
the client account, or if the restrictions would require the Firm to deviate from its standard suite of
services, the Firm reserves the right to end the relationship.
General principles of Selective’s investment approach include focusing on three asset classes: 1)
stocks and equity ETFs, fixed income, and income producing physical assets. When reviewing
individual investments within these asset classes Selective’s core principles relying on focusing on
investments that in our opinion are transparent, low cost, tax efficient, diversified, and have little or
no debt.
Selective monitors all securities that clients give Selective discretionary authority over. Positions
that Selective has not been given discretion over will be monitored periodically and discussed
during formal reviews. Some clients have formal review cadences while others are only “upon
request”.
D. Wrap Fee Programs
A wrap fee program is an investment program where the investor pays one stated fee that includes
management fees, transaction costs, fund expenses, and any other administrative fees. The Firm
does not participate in any wrap fee programs.
E. Assets Under Management
As of February 09, 2024, the Firm has $392,478,082 in Assets Under Management. Below is a
breakdown of what is considered discretionary and non-discretionary:
• Discretionary - $392,478,082
• Non-Discretionary - $0.00
We also manage $15,834,433 in client assets on a non-continuous basis.
IRA Rollover Recommendations
Effective December 20, 2021 (or such later date as the US Department of Labor (“DOL”) Field
Assistance Bulletin 2018-02 ceases to be in effect), for purposes of complying with the DOL’s
Prohibited Transaction Exemption 2020-02 (“PTE 2020-02”) where applicable, we are providing
the following acknowledgment to you.
When we provide investment advice to you regarding your retirement plan account or individual
retirement account, we are fiduciaries 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. The way we make money creates some conflicts with your interests, so we
operate under a special rule that requires us to act in your best interest and not put our interest
ahead of yours. Under this special rule’s provisions, we must:
• Meet a professional standard of care when making investment recommendations (give
prudent advice);
• Never put our financial interests ahead of yours when making recommendations (give loyal
advice);
• Avoid misleading statements about conflicts of interest, fees, and investments;
• Follow policies and procedures designed to ensure that we give advice that is in your best
interest;
• Charge no more than is reasonable for our services; and
• Give you basic information about conflicts of interest.
We benefit financially from the rollover of your assets from a retirement account to an account that
we manage or provide investment advice, because the assets increase our assets under
management and, in turn, our advisory fees. As a fiduciary, we only recommend a rollover when we
believe it is in your best interest.