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 Wrap Advisory Services
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
implemented, we review the portfolio periodically to ensure that the portfolio is in line with 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.
The annual investment advisory fee charged shall vary up to 2.0% of the assets held in the account
and is determined by the market value of the account, asset types, the client’s financial situation and
trading activity, and is negotiable with the client. The annual fee shall be divided and payable
quarterly in advance through a direct debit in the client account. LPL Financial is responsible for
calculating and debiting all fees from client accounts. Clients must provide LPL Financial written
authorization to debit advisory fees from their accounts and pay such fees to our firm. Fees are based
on the account's asset value as of the last business day of the prior calendar quarter. Fees for accounts
opened at any time other than the beginning of a quarter will be prorated based on the number of
days remaining in the initial quarter. Advisory fees for the current calendar quarter are based on the
Account's asset value as of the last business day of the prior calendar quarter. For billing purposes,
the market value used by Advisor in calculating the quarterly advisory fee will vary from the market
value reported in the account statements sent by LPL due to the timing differences associated with
the receipt of dividends and interest. Fees for Accounts opened at any time other than the beginning
of a quarter will be based on the value of assets when the Account is opened and will be prorated
based on the number of days remaining in the initial quarter. In addition, any additions to or
withdrawals from the Account during the quarter will be prorated, based on the number of days
remaining in the quarter, for the purpose of calculating the advisory fee.
ADV Part 2A, Appendix 1 – Wrap Fee Brochure Page 5 Summit Wealth Management Group, Inc.
As part of this process, you understand and acknowledge the following:
a) LPL Financial as the custodian sends statements at least quarterly to Clients showing all
disbursements for their account, including the amount of the advisory fees paid to our
firm;
b) The Client has provided authorization permitting fees to be directly paid by these terms;
c) LPL Financial calculates
the advisory fees and deducts them from the Client’s account.
*In rare cases, we will agree to directly bill clients.
Clients will not pay a transaction charge for transactions in a SWM II account, clients should be
aware that we pay LPL transaction charges for those transactions. The transaction charges paid
by us vary based on the type of transaction (e.g., mutual fund, equity or ETF) and for mutual
funds based on whether or not the mutual fund pays 12b-1 fees and/or recordkeeping fees to
LPL. Clients should understand that the cost to Advisor of transaction charges may be a factor that
we consider when deciding which securities to select and how frequently to place transactions in
a SWM II account.
To the extent you own a 12b-1 paying mutual fund or other mutual fund that pays a distribution,
marketing or sales fee, please know that no one at our firm will receive that fee. However, such
fees and expenses are retained by LPL in their capacity as your account broker/dealer and
qualified custodian. LPL does not incentivize us or otherwise try to influence us to pick
investments that pay them a 12b-1, distribution, marketing, sales or other fees and expenses.
In many instances, LPL makes available mutual funds in a SWM II account that offer various classes
of shares, including shares designated as Class A Shares and shares designed for advisory programs,
“Platform Shares”. The Platform Share class offered for a particular mutual fund in SWM II in many
cases will not be the least expensive share class that the mutual fund makes available, and was
selected by LPL in certain cases because the share class pays LPL compensation for the
administrative and recordkeeping services LPL provides to the mutual fund. Client should
understand that another financial services firm may offer the same mutual fund at a lower overall
cost to the investor than is available through SWM II. In other instances, a mutual fund may offer
only Class A Shares, but another similar mutual fund may be available that offers Platform Shares.
Class A Shares typically pay LPL a 12b-1 fee for providing shareholder services, distribution, and
marketing expenses (“brokerage-related services”) to the mutual funds. Platform Shares generally
are not subject to 12b-1 fees. As a result of the different expenses of the mutual fund share classes,
it is generally more expensive for a client to own Class A Shares than Platform Shares. An investor
in Platform Shares will pay lower fees over time, and keep more of his or her investment returns
than an investor who holds Class A Shares of the same fund.
Our client portfolios that hold A shares are limited to legacy holdings that have been owned for a
number of years. We no longer recommend Class A Shares in be held in managed accounts and are
transitioning client portfolios into Platform Shares when it is in the client’s best interest.
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.
ADV Part 2A, Appendix 1 – Wrap Fee Brochure Page 6 Summit Wealth Management Group, Inc.
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.