Firm Description
Sgroi Wealth Advisory Group LLC, hereinafter referred to as Sgroi Wealth Advisory
or the Firm, is a Registered Investment Advisory firm, registered with the Securities
and Exchange Commission (SEC), and manages portfolios in securities for individuals
and trusts. The Firm’s initial registration was submitted to the SEC in October of
2017. Sgroi Wealth Advisory is a privately held limited liability company whose
principle owners are Patrick J. Sgroi and John G. Clouden, who hold ownership
percentages of 65% and 35%, respectively. In conjunction with its registration with the
SEC, the Firm is also notice filed to conduct advisory business in the States of New
York, Florida, Georgia, Illinois, North Carolina, South Carolina, Tennessee and Texas,
as required by those respective states’ registration requirements. The Firm is
headquartered in West Seneca, New York.
Sgroi Wealth Advisory provides personalized confidential financial planning, asset
management and related consulting services to individuals, high net worth individuals,
pension and profit-sharing plans, trusts, charitable organizations and small businesses.
Recommendations to clients are made based on consultation with the client and
analysis of each client’s specific financial needs and may include following services:
Determination of financial objectives Identification of financial problems
Cash flow management Tax planning
Insurance review Investment management
Education funding Retirement planning
Estate planning
Within the context of providing these services, clients may place restrictions on the
types of securities to be held within their portfolios. Sgroi Wealth Advisory, at this
time, does not offer its clients wrap fee programs. These progra
ms charge a single fee
for a
n investment program that
bundles together a suite
of services, such as
brokerage,
advisory, research a
nd management.
Sgroi Wealth Advisory views its role as pursuing for its clients a superior return on
investments consistent with clients’ desires for responsible management of assets
focused on the achievement of the individual goals of the clients. We seek to
accomplish this by investing in securities with greater potential and an eye toward
stability of principal.
Sgroi Wealth Advisory is a fee-only advisory firm and does not provide commission-
based investment products to its clients within their advisory accounts. Clients utilizing
the Firm’s asset management services are charged an asset management fee based on
the amount of a client’s assets managed by Sgroi Wealth Advisory. At the discretion of
the Firm, client assets not managed by Sgroi Wealth Advisory may be aggregated with
a client’s managed account balances to reduce their management fee percentage. While
some Investment Advisor Representatives (IARs) of the Firm are licensed to offer
insurance-related products to advisory clients of the Firm, they receive no
commission income which might otherwise be derived from those activities should a
client elect to accept their recommended products. Likewise, Sgroi Wealth Advisory
does not receive any portion of the commission income from such transactions either.
Investment advisory services are provided to clients on a discretionary basis only.
Sgroi Wealth Advisory does not act as a custodian of client assets, opting instead to
utilize either its primary custodian, TD Ameritrade Institutional, hereinafter referred to
as TD Ameritrade, a division of TD Ameritrade, Inc., an independent and unaffiliated
SEC-registered broker/dealer and a member of FINRA/SIPC. In addition, the Firm
offers advisory services for 403(b) retirement plan clients through IPX Retirement,
hereinafter referred to as IPX. If/When deemed by Sgroi Wealth Advisory to be in the
best interest of the Firm’s advisory clients or to better serve specific client needs, the
Firm may at its discretion elect to use the services of other custodians as well.
Sgroi Wealth Advisory’s governing policy is that client’s interests are always placed
first and foremost. It serves individual clients with moderate-sized portfolios up to
sophisticated clients with extensive portfolios. Clients with portfolios in this range
have, in the past, had limited options. They could manage their portfolios themselves,
buy mutual funds, rely on large institutional mangers or use bank trust departments.
Often these options, generally, do not provide the level of attention and individualized
professional management that most clients are seeking.
While clients Sgroi Wealth Advisory always maintain control of their assets, they
authorize the Firm to transact trades on their behalf, without prior consultation, by the
discretion authorization contained in their advisory agreement executed with the Firm.
A written evaluation of each client's initial situation may be provided to the client, at
the discretion of their IAR. Account reviews with clients are conducted at least
annually by the IAR and periodic interim reviews may also be conducted with clients
to provide reminders of the specific courses of action that need to be taken.
Other professionals (e.g., lawyers, accountants, insurance agents, etc.) may be
engaged directly by the client or by Sgroi Wealth Advisory on behalf of a client, on an
as-needed basis and with client approval. Conflicts of interest which might arise
based on positions or actions of Sgroi Wealth Advisory will be immediately disclosed
to the client in the unlikely event they should occur.
An initial meeting with a prospective client, which may be by telephone or in person,
is free of charge and is considered an exploratory discovery interview to determine
if/or the extent to which the financial planning or investment management services
offered by Sgroi Wealth Advisory may be beneficial and appropriate to the client. In
the event, as a result, the Firm is engaged by the client to provide those services, an
advisory agreement is executed between the parties which defines the nature and cost
of the services contracted.
The Firm’s asset management philosophy is based on a simple proven premise that
greater and more consistent gains are likely by investing in a diverse portfolio of
securities deemed suitable with each client’s objectives, risk tolerances and time
horizons. This philosophy stresses minimizing the risk of permanent loss of capital.
So, by consistently losing less, greater returns can be made in the long-run. Equity and
income investments are evaluated for quality and suitability on an ongoing basis.
Each client’s IAR places emphasis on having an intimate familiarity with the various
holdings within their specific investment portfolio. In selecting the securities to be
added to a client’s portfolio, a due diligence review is conducted by the Firm’s
Investment Committee to ensure the viability of options available to the IARS.
Research into prospective securities may be focused on quantitative elements and/or
technical analyses of the securities being considered.
Sgroi Wealth Advisory can adjust its asset allocation models between stock, bonds,
and money market funds, based on shifting market trends. Individual portfolios may be
invested in a mix of securities such as stocks, exchange-traded funds (ETFs), corporate
bonds, government bonds and money market funds. The actual mix among these
securities alternatives is determined by their relative attractiveness at a specific time,
coupled with domestic and international economic climates and market conditions.
Portfolios always remain in the client’s name, with TD Ameritrade acting as Sgroi
Wealth Advisory’s primary account custodian. For clients participating in the Firm’s
previously-offered Betterment for Advisors platform, Betterment Securities serves as
custodian for those respective accounts. While Sgroi Wealth Advisory is granted
discretionary trading authority by its clients, it neither accepts authority to withdraw
cash or securities from client accounts nor assumes custody of client assets in any other
form beyond the withdrawal of advisory fees from client custodial accounts.
Clients receive quarterly statements from their account custodians along with periodic
status reports that set forth the results for the previous quarter and for the year-to-date.
These reports are augmented by personal meetings at least annually or more frequently
if desired by the client or their IAR.
Principal Owners
As previously stated, the principal owners of Sgroi Wealth Advisory are Patrick Sgroi
and John Clouden, with each holding a 65% and 35% ownership interest, respectively,
in the Firm.
Types of Advisory Services
Sgroi Wealth Advisory provides investment supervisory services, also known as asset
management services, as well as financial planning and consultative services to its
clients. Asset management services may entail the active or passive management of
investment accounts, furnishing of investment advice through consultations with
clients, issuing periodic newsletters or special reports to its clients about securities and
market conditions or trends and evaluating securities held by clients to foster an
understanding of their assets relative to their stated goals and objectives.
Financial planning services are provided to clients to assist them in pursuing both
short- and long-range financial goals. This is accomplished through a process of
collecting client information about the client’s current financial condition, clarification
of their goals, identification of their past efforts and current abilities in pursuit of their
goals and ongoing progress reviews relative to any actions taken.
On more than an occasional basis, Sgroi Wealth Advisory may furnish consulting
services to clients on matters not involving securities, such as taxation, trust
management and estate planning, but are directly related to the ongoing management
of client assets. However, the Firm does not act in any capacity as a tax or legal
advisor to its clients.
The Firm is compensated for its advisory services to clients through asset management
fees, fixed fees or hourly fees. The fee structure
is determined by the types of services
elected by the clients. Clients grant the Firm discretionary powers which permit the
execution of transactions on the clients’ behalves without consulting with or obtaining
consent from them in advance of each transaction. As stated above, this authorization
is granted within the advisory agreements initially signed by the clients.
As of December 31, 2022, Sgroi Wealth Advisory had approximately $691,886.85
under management for 3,757 advisory clients within 5,085 client accounts. As previously
stated, all assets are managed on a discretionary basis.
Tailored Relationships
The goals and objectives for each client are documented in our client relationship
management system. Investment strategies are then created that reflect the stated
goals and objectives of each client. Clients retain the option of imposing restrictions
on investing in certain securities or types of securities.
Types of Agreements
Prior to engaging Sgroi Wealth Advisory’s services, clients are required to sign an
agreement which defines the services that will be provided by the Firm. The
following agreements define the typical client relationships between Sgroi Wealth
Advisory and its clients. Agreements may not be assigned or transferred to parties
other than the original clients entering into the agreements. Since Sgroi Wealth
Advisory does not maintain custody of client assets, however, separate agreements
may also need to be executed between custodial firms and the client, in addition to the
agreements of the Firm described below. Since neither Sgroi Wealth Advisory nor its
advisors act as attorneys, their recommendations should not be interpreted as legal
advice.
Financial Planning and Consulting Service Agreement
Planning or consulting service clients are required to sign a Financial Planning and
Consulting Service Agreement with the Firm. This agreement outlines the nature and
level of advisory services to be provided, without requiring the direct management of
the client’s assets.
For financial planning clients, information regarding a client’s personal and financial
situation and objectives is collected by the advisor through a confidential interview
process. This data is analyzed and a written financial plan, with specific
recommendations, is presented to clients if/and when deemed by the advisor to be
appropriate to do so. With or without a written financial plan, clients will be provided
with recommendations by their advisor based upon the analysis of their financial
situation, objectives and risk tolerances.
A comprehensive financial plan, if elected, may include, but is not limited to a net
worth statement, a cash flow statement, a review of investment accounts including
reviewing past asset allocations, providing asset repositioning recommendations,
strategic tax planning, education planning with funding recommendations, a review of
retirement accounts and plans including recommendations and one or more retirement
scenarios, a review of insurance policies and recommendations for changes, if
necessary and an estate planning review and recommendations.
As previously stated, the Firm does not provide legal or accounting advice relative to
its financial plans. It will, however, act as a facilitator in these areas between clients
and their legal and/or tax advisors relative to the recommendations made in a
financial plan.
Detailed investment advice and specific recommendations are provided as part of a
financial plan. Implementation of the recommendations is at the discretion of the
client and may be implemented with either Sgroi Wealth Advisory or with a financial
advisor of the client’s choosing.
Consulting services are provided to clients regarding other financial-related concerns
in situations where detailed or comprehensive financial planning is either not
necessary or not desired. Common areas of concern addressed by these services
include:
Education planning Simple investment planning
Death, disability and retirement planning Tax planning
Net worth, cash flow and financial position Risk management (insurance)
Other investment or non-investment issues Estate planning
Fees for financial planning and consulting services provided may be negotiable, at the
discretion of the IAR or the Firm.
Investment Management Agreement
Most clients choose to have Sgroi Wealth Advisory manage their assets in order to
obtain ongoing in-depth advice and life planning. These clients are required to sign an
Investment Management Agreement which defines the manner in which their assets
will be managed and the fees assessed by the Firm. Sgroi Wealth Advisory’s
Investment Management Agreement provides for cash flow management, insurance
review, investment management, education planning, retirement planning, estate
planning and tax planning, along with the implementation of recommendations within
each area. Under the terms of the Agreement, investable assets are managed by the
Firm in pursuit of the client’s goals in each of these areas.
All aspects of the client’s financial affairs are reviewed, including those of their
dependents, if any. Realistic and measurable goals are set and objectives to reach
those goals are defined. As goals and objectives change over time, suggestions are
made and implemented on an ongoing basis. Key suitability parameters for each
advisory client are developed with the client and clearly defined in an Investment
Policy Statement and/or Client Risk Profile signed by the client at the outset of the
advisory relationship or in similar suitability documents. These suitability documents
are reviewed with clients on an annual basis and updated as necessary.
Based on each client’s objectives and suitability factors identified in their suitability
documents, the advisor will develop a plan with each client that focuses primarily on
either income generation or growth of equity assets. Fees differ between these two
portfolio management options and are listed in the respective advisory agreement
presented to the client. Asset management fees are negotiable, as with fees for the
Firm’s other advisory services, and are assessed in advance for clients utilizing TD
Ameritrade or IPX as their account custodian.
Asset management services are provided to Sgroi Wealth Advisory clients on a
discretionary basis, as previously stated. Under the terms of our agreement, clients
authorize the advisor to buy, sell, invest, reinvest, exchange and/or trade securities in
their accounts at his/her sole discretion and without consulting with the client in
advance.
Advisory services are seen as ongoing and agreements are self-renewing unless
terminated by either the client or the advisor. Fees and terms within the agreement,
however, may be adjusted periodically to serve the client’s ongoing needs. Clients are
notified in writing of any adjustments to their agreements.
Clients receive quarterly statements from their account custodian(s) which identify the
account balance, fees deducted and, in some cases, the formula used in the calculation
of the deducted fees. For clients terminating their advisory agreement prior to the end
of a quarter for which they have been billed in advance, the Firm will provide a pro rata
refund of fees paid in advance based upon the number of days remaining in the calendar
quarter from the date the termination notice is received by the Firm. Refunded fees will
be either credited back to the client’s advisory account prior to the transfer out of the
account or a check forwarded directly to the client.
Retainer Agreement
Sgroi Wealth Advisory may, at its discretion, charge a retainer to clients for financial
planning, consulting and/or asset management services. Should it do so, the retainer
terms will be clearly stated in the agreement signed by the client.
Asset Management
A minimum account value is not required to open an advisory asset management
account.
Advisors generally recommend that clients allocate their investment assets to various
vehicles deemed by the advisor to be appropriate and consistent with the client’s
suitability and objectives. These investment vehicles may include, but are not limited
to, the following:
Exchange-listed securities Over-the-counter securities
Foreign securities Warrants
Corporate debt securities Commercial paper
Certificates of deposit Municipal securities
Mutual funds Exchange-traded funds
U.S. Government securities Real estate partnerships
Oil and gas partnerships
Fees related to investment vehicles are clearly identified to the client, either by the
advisor or by prospectus, prior to investing. Initial public offerings (IPOs) are
available to clients through Sgroi Wealth Advisory as well, subject to pre-
transaction approval of the Firm’s Chief Compliance Officer (CCO).
Securities transactions in advisory accounts are executed through TD Ameritrade,
Sgroi Wealth Advisory’s advisory client custodian. Other brokerage firms,
broker/dealers and/or custodians may be utilized if requested by the client, known as
client-directed brokerage, or if deemed to be more appropriate by the Firm. Under a
client-directed brokerage arrangement, however, clients are advised that their
direction may hinder Sgroi Wealth Advisory’s ability to achieve best execution on
trades, negotiate commissions or participate in block trading which could be
beneficial to the client.
Termination of Agreements
Either Sgroi Wealth Advisory or the client may terminate any of the aforementioned
agreements at any time by notifying the other party in writing thirty (30) days prior to
the termination date. As previously stated above, clients terminating an asset
management agreement prior to the end of a calendar quarter will receive a prorated
refund of fees paid in advance based on the number of days remaining in the quarter.
Since financial planning and consulting fees are billed upon completion of services,
clients terminating from these types of agreements may be billed on a prorated basis
using the Firm’s hourly billing rate of $250 per hour for the hours expended up to the
date the termination notice is received from the client.
In addition, Sgroi Wealth Advisory reserves the right to terminate any advisory
engagement where a client has willfully concealed or has refused to provide pertinent
information about financial situations when necessary and appropriate, in Sgroi
Wealth Advisory’s judgment, to providing proper financial advice. Any unused
portion of fees collected in advance will not be refunded to the client under these
circumstances.