Stiles Financial Services Incorporated’s (“SFSI” or “Firm”) wrap program is offered through
SFSI’s federally registered adviser under the Investment Advisors Act of 1940. SFSI,
established in 2000, is wholly owned and managed by Susan M. Stiles. As of December 30,
2023, SFSI has $369,340,457.00 in assets under management in our Portfolio Management
advisory service offered through SFSI’s wrap program. As of December 30, 2023, SFSI had
$27,567,772.84 of ERISA Section 3(38) contracts and $668,261,262.33 of ERISA Section
3(21) contracts in assets under advisement through Corporate Retirement Plan Consulting
Services provided to defined contribution and defined benefit plans, both qualified and non-
qualified.
Our Portfolio Management wrap program is described in greater detail in the narrative that
follows. Please reference our additional Brochures for specific information on our other
advisory offerings.
Description of Our Wrap Fee Program
Our wrap fee program (“Program”) provides clients with a platform to trade in a multitude
of investment products for one stated fee. This fee includes management fees, transaction
costs, and certain other administrative fees. SFSI does not offer any other type of non-wrap
non-discretionary agreement relationship. Wrap fee programs are any arrangements in
which the clients receive investment advisory services (including portfolio management or
advice on other investments) as well as execution of client transactions through a
management fee and a program fee. SFSI contracts with different custodians and will work
with the client to determine the best fit for them. The client is required to open a new
securities brokerage account and complete a new account agreement with the custodian.
To receive the services of the wrap program, the client is required to enter into a written
agreement with SFSI which will contain the relevant terms and conditions of the advisory
relationship (the “Agreement”).
Once the SFSI wrap program relationship has been established, SFSI will work with the client
to understand their individual liquidity and cash flow needs, time horizon and risk tolerance,
investment objectives, as well as any other pertinent factors of their specific financial
situations. With that information, SFSI designs and creates investment portfolio strategies to
manage client investment assets and their financial affairs. SFSI manages client investment
portfolios on a discretionary basis according to the terms of the advisory agreement.
Discretion means that the client and SFSI have agreed that SFSI will select the identity and
amount of securities to be bought or sold in their accounts without first consulting with the
client. However, along with this authority, SFSI engages clients in continual, ongoing
conversations to confirm that clients remain comfortable with the guidelines they have
provided to manage their investment assets and understand investment changes, and the
reasons behind changes in their portfolio investments.
SFSI is not required to verify any information received from the client or from the client’s
other professionals (e.g., attorneys, accountants, etc.) to perform these services, and is
expressly authorized to rely on such information. SFSI may recommend its supervised
persons in their individual capacities as insurance agents, however the client is under no
obligation to act upon any such recommendation.
The client is also advised that it remains the client’s responsibility to promptly notify SFSI of
any change in the client’s financial situation or investment objectives for the purpose of
reviewing, evaluating, or revising SFSI’ previous recommendations and/or services.
Fees for Participation in the Program
Fees for Portfolio Management are typically charged as an annual asset-based management
fee and a program fee, which are billed quarterly and in advance. SFSI’s program fee is paid
instead of brokerage commissions, transaction fees and other related costs and expenses that
would normally be incurred by the client from the custodian. In addition, program fees offset
other technology costs including portfolio reporting tools incurred to manage our client portfolios.
Program fees are in addition to the asset-based fee and are charged at a uniform rate of .10%
to .08% of assets under management. This fee structure is intentionally designed to address
any potential conflicts of interest instead of charging clients fees incurred by the utilization
of custodians and technology tools where fees by these third parties would otherwise be
charged to the client.
The asset-based fees for the SFSI wrap program range as follows, according to the size,
nature and complexity of the client relationship. In some situations, SFSI may accommodate
clients in creating a custom fee schedule. Fees may vary from the schedule below and final
fees will be disclosed to clients within the client agreement:
Household Assets under Management Annual Percent Fee
$0 - $500,000 1.15%
$500,001 - $1,000,000 0.95%
$1,000,001 - $2,000,000 0.85%
$2,000,001 - $5,000,000 0.75%
$5,000,001 - $10,000,000 0.65%
$10,000,000 and Over 0.55%
Description of Platform and Technology Fee
This fee is charged to offset some of the costs of the trading, technology
and custodial
platform along with the technology suite of tools that SFSI uses and provides to our clients.
SFSI charges a technology/platform fee based on the schedule below:
Household Assets under Management Annual Percent Fee
Up to $3,000,000 0.10%
$3,000,001 and Over 0.08%
Prior to engaging us to provide Portfolio Management services, you are required to enter
into a formal investment advisory agreement with us setting forth the wrap program fees to
be charged to your account and other terms and conditions. Typically, SFSI charges all new
relationships quarterly and in advance, based on the value of your account on the last day of
the previous quarter. If the portfolio management agreement is executed at any time other
than the first day of a calendar quarter, our fees will apply on a pro rata basis, which means
that the advisory fee is payable in proportion to the number of days in the quarter for which
you are a client. Likewise, in the event that an advisory contract is terminated, fees would be
reimbursed in proportion to the number of days in the quarter for which you are not a client.
Fee Comparison and Other Charges
As referenced above, portions of the fees paid to SFSI are used to cover advisory services as
well as custodial costs. Services provided through the Program may cost clients more or less
than purchasing these services separately. Program fees may be higher or lower than other
comparable programs. Wrap fee programs typically assume a certain amount of trading
activity in the client’s account, for example re-balancing the portfolio for the client’s
individual development plan. Therefore, prolonged periods of holding cash positions, limited
trading activity and inactivity may result in higher fees than if the account paid fees or
commissions for each transaction separately.
A one-time initial personal model development fee may be charged for complex portfolios
that could range up to $2,500.00. The fee is assessed on variables such as number of accounts,
size of total household AUM, and level of special client-based guidelines or restrictions on
investment positions for example types of companies, sectors, or regions. Portfolios
generally requiring more research beyond what our firm typically provides will be assessed
a higher one-time initial model development fee.
The amount you pay for our wrap program and platform technology fees will depend, for
example, on the services you receive and the amount of assets in your account. The more
assets you have in the advisory account, the more you will pay us but will decline as a
percentage of assets as your assets increase. The amount paid to our firm and your financial
professional does not vary based on the type of investment we select on your behalf. The wrap
program fee is paid instead of brokerage commissions, transaction fees and other related
costs and expenses that would normally be incurred by the client from the custodian. The
platform technology fee offsets some of the costs of the trading and other technology SFSI
deploys to service client accounts. Both fees reduce the value of your account and will be
deducted from your account. Neither one of these fees pay for any taxes that you may incur
from your portfolio. Although transaction fees are usually included in the wrap program fee,
sometimes you will pay an additional transaction fee for investments bought and sold outside
our preferred custodian. Examples of other fees not included in the wrap program are SEC
section 31 fees, ADR fees, and fees to wire money. Some investments may also impose
additional fees that will reduce the value of your investment over time, such as mutual funds
and ETFs (exchange traded funds) and any other fees required by law. As part of our
investment advisory services to you, we may invest or you may transfer in mutual funds,
exchange traded funds, or alternative investments. The fees that you pay to our firm for
investment advisory services are separate and distinct from the fees and expenses charged
by mutual funds, exchange traded funds or alternative investments which are described in
each fund's prospectus. These fees can include a management fee and other fund expenses.
SFSI also offers investment discretionary services on direct packaged products such as
mutual funds, including 529 accounts and variable insurance products. A flat annual fee of
0.50% of the assets under management will be charged quarterly in arrears. For variable
insurance products a flat annual fee of 0.75% of the assets under management will be
charged quarterly in arrears.
Fee Discretion
SFSI, in its sole discretion, has the authority to negotiate a lesser fee amount based upon
certain factors which could include related household accounts or a pre-existing client
relationship. Fees are negotiable, so clients receiving the same service may be paying
different fees.
Fee Debit
A client’s written agreement with SFSI establishes the specific way fees are charged. Clients
authorize SFSI to directly debit fees from one or more of their investment accounts.
Management fees are not prorated for each capital contribution and withdrawal made
during the applicable calendar quarter.