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.
Our firm sponsors and offers a wrap fee program. Our wrap fee program allows clients to pay a single
fee for investment advisory services and associated custodial transaction costs. Because our firm
absorbs client transaction fees, an incentive exists to limit trading activities in client accounts.
Custodial transaction costs, however, are not included in the advisory fee charged by our firm for
non-wrap services and are to be paid by the client to their chosen custodian. Depending on the client’s
account or portfolio trading activity, clients may pay more for using our wrap fee services than they
would for using our non-wrap services.
LPL Financial offers a trading platform with select exchange traded funds (“ETFs”) that do not charge
transaction fees. The no-transaction-fee ETF trading platform is available to clients participating in
LPL Financial’s Strategic Wealth Management (“SWM”) and Strategic Asset Management (“SAM”)
programs. Since our firm pays the transaction fees charged by LPL Financial to clients participating
in our wrap fee program, we are incentivized to recommend no-transaction-fee ETFs over other
types of securities and ETFs in order to reduce our costs. This presents a conflict of interest because
the limited number of ETFs available on the no-transaction fee platform may have higher overall
expenses than other types of securities and ETFs not included in the platform. In addition, other
major custodians have eliminated transaction fees for all ETFs and U.S. equities, so clients may pay
more for investing in the same securities at LPL Financial.
Wrap Asset Management:
We emphasize continuous and regular account supervision. As part of our asset management service,
we generally create a portfolio, consisting of individual stocks or bonds, exchange traded funds (“ETFs”),
options, mutual funds and other public and private securities or investments. The client’s individual
investment strategy is tailored to their specific needs and may include some or all of the previously
mentioned securities. Each portfolio will be initially designed to meet a particular investment goal,
which we determine to be suitable to the client’s circumstances. Once the appropriate portfolio has been
determined, we review the portfolio at least monthly and if necessary, rebalance the portfolio based
upon the client’s individual needs, stated goals, and objectives. Each client has the opportunity to place
reasonable restrictions on the types of investments to be held in the portfolio.
Blended Fee Schedule:
Assets Under Management Annual Percentage of Assets Charge
Under $500,000 1.25%
$500,000 to $2,000,000 0.95%
Over $2,000,000 0.75%
The fee to be assessed to each account will be detailed in the client’s signed advisory agreement, LPL
Account Application or LPL Tiered Fee Authorization form. Fees are billed on a pro-rata basis
quarterly in advance based on the value of the account(s) on the last day of the previous quarter. Fees
are negotiable and will be deducted from the account(s). Our firm bills on cash unless indicated
otherwise in writing. Please note that fees will be adjusted for deposits and withdrawals made during
ADV Part 2A, Appendix 1 – Wrap Fee Brochure Page 5 Solano Wealth Management, Inc.
the quarter. If accounts are opened during the quarter, the pro-rata advisory fees will be deducted
during the next regularly scheduled billing cycle. In rare cases, our firm will agree to direct bill clients.
As part of this process, Clients understand the following:
a) LPL as the client’s custodian sends statements at least quarterly, showing all disbursements
for each account, including the amount of the advisory fees paid to our firm;
b) Clients provide authorization permitting LPL to deduct these fees;
c) LPL calculates the advisory fees for all fee schedules and deducts them from the client’s
account.
Wrap Comprehensive Portfolio Management:
Our 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 monthly. 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.
Blended Fee Schedule:
Assets Under Management Annual Percentage of Assets Charge
First $2,000,000 Up to 3%
Over $2,000,000 Up to 2%
The fee to be assessed to each account will be detailed in the client’s signed advisory agreement, LPL
Account Application or LPL Tiered Fee Authorization form. Fees are billed on a pro-rata basis
quarterly in advance based on the value of the account(s) on the last day of the previous quarter. Fees
are negotiable and will be deducted from the account(s). Please note that fees will be adjusted for
deposits and withdrawals made during the quarter. Our firm bills on cash unless indicated otherwise
in writing. If accounts are opened during the quarter, the pro-rata advisory fees will be deducted
during the next regularly scheduled billing cycle. In rare cases, our firm will agree to direct bill clients.
As part of this process, Clients understand the following:
a) LPL as the client’s custodian sends statements at least quarterly, showing all disbursements
for each account, including the amount of the advisory fees paid to our firm;
b) Clients provide authorization permitting LPL to deduct these fees;
c) LPL calculates the advisory fees for all fee schedules and deducts them from the client’s
account.
ADV Part 2A, Appendix 1 – Wrap Fee Brochure Page 6 Solano Wealth Management, Inc.
Other Types of Fees & Expenses:
In addition to our advisory fees above, clients may also pay holdings charges imposed by the chosen
custodian for certain investments, charges imposed directly by a mutual fund, index fund, or
exchange traded fund, which shall be disclosed in the fund’s prospectus (e.g.., fund management fees,
distribution fees, surrender charges, variable annuity fees, IRA and qualified retirement plan fees,
mark-ups and mark-downs, spreads paid to market makers, fees for trades executed away from
custodian, wire transfer fees and other fees and taxes on brokerage accounts and securities
transactions). Our firm does not receive a portion of these fees.
Termination and Refunds:
Either party may terminate the signed advisory agreement at any time. Upon receipt of your notice
of termination, LPL will process a pro-rate refund of the unearned portion of the advisory fees
charged in advance at the beginning of the quarter.
Wrap Fee Program Recommendations
We do not recommend or offer the wrap program services of other providers. 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.