Affiliated Advisory Services
Catalyst Wealth Management, LLC (“Catalyst Wealth Management,” “we,” “our,” “us”) is
a limited liability company organized under the laws of the state of Georgia in 2009. We
are an SEC-registered investment advisory firm wholly owned by Christopher D. Pullaro,
David A. Pierce, David S. Mirolli and Brian T. Pierce.
We offer investment advisory services to you directly and through the referrals of third
parties. We either consult with you directly or through these third parties to obtain detailed
financial information and other pertinent data. In providing investment advice to you and
all of our clients, we consider:
your financial situation,
risk tolerance,
investment horizon,
liquidity needs,
tax considerations,
financial goals,
income (current and potential),
portfolio size,
net worth,
investment objectives, and
any other issues you disclose to us that are important to your state of affairs.
Certain of our Wealth Advisors directly manage client portfolios custodied at TD
Ameritrade Institutional (“TD Ameritrade”), Division of TD Ameritrade, Inc., member
FINRA/SIPC. Assets are allocated within a mix of securities that typically include all or
some of the following:
equities,
bonds,
active, index, or other mutual funds,
exchange traded funds,
interval funds, and
direct participation programs (“DPP”s).
The exact securities and allocation thereof recommended to or selected for clients’
accounts may differ from client to client based on the particular client’s risk tolerance, time
horizon, financial situation, and other factors.
Securities and sector allocations are recommended or selected after considering the
factors described above, as well as new account paper and/or risk-based software
questionnaires completed by clients and Adviser’s discussions with clients. Assets are
typically managed to an allocation model if such a stated target allocation has been
agreed to by client and Adviser.
You should notify us promptly if there are any changes in your financial situation or
investment objectives. You should also notify us if you wish to impose any reasonable
restrictions upon the management of your account.
We primarily offer our advisory services within two management methods: Discretionary
and Non-Discretionary.
Non-Discretionary Management - This means that we need advance approval from you
to determine the type and amount of securities to be bought and sold for your accounts.
Discretionary Management – This means that we do not need advance approval from you
to determine the type and amount of securities to be bought and sold for your accounts.
This discretion is used in a manner consistent with the stated investment objectives for
your account, if you have given us written authorization to do so. We only exercise
discretion in accounts where we have been authorized by you. This authorization is
typically included in the investment advisory agreement you enter into with us.
We do not, however, have the ability to choose the broker-dealer through which
transactions will be executed. Additionally, we do not have the ability to withdraw funds
from your account (other than to withdraw our advisory fees, which may only be done with
your prior written authorization.)
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.
Fees and Compensation
We accept new clients under a fee-based arrangement. Our fee is calculated based upon
the market value of the assets in your account on the last day of the previous quarter.
Broker-dealers and other financial institutions that hold client accounts are referred to as
custodians. Your custodian determines the values of the assets in your portfolio. Fees
for the initial quarter are based on the value of your cash and securities on the date the
custodian receives them and are prorated based upon the number of calendar days in
the calendar quarter that our agreement is in effect.
You must authorize us in writing to have the custodian/broker-dealer pay us directly by
charging your account. One-fourth of the annual fee is charged each calendar quarter.
Your custodian/ broker-dealer will provide you with statements that show the amount paid
directly to us. You should review and verify the calculation of our fees. Your
custodian/broker-dealer does not verify the accuracy of fee calculations.
Typically, you must pay our advisory fees on a quarterly basis in advance of receiving our
services. Should you terminate the advisory agreement we have entered into within five
(5) business days from the date the agreement is executed, you will receive a full refund
of any fees paid.
Should either one of us terminate the advisory agreement we have entered into before
the end of a billing period, any unearned fees that were deducted from your account will
be returned to you by us. The amount refunded to you is calculated by dividing the most
recent advisory fee you paid by the total number of days in the quarter. This daily fee is
then multiplied by the number of calendar days in the quarter that our agreement was in
effect. This amount, which equals the amount we earned for the partial quarter, is
subtracted from the total fee you paid in advance to determine your refund.
Wrap pricing structures allow you to pay an all-inclusive fee for management, brokerage,
clearance, custody and administrative services. We may charge accounts that do not
meet minimum asset thresholds a nominal fee on a quarterly basis, not to exceed 0.50%.
You should note that the same (or similar) services as those described above may be
available from other sources at a lower cost to you. Depending upon the level of the wrap
fee charges, the amount of portfolio activity in your account, the value of services that are
provided, and other factors, a wrap fee may exceed the aggregate cost of services if they
were to be provided separately. Generally, wrap programs are relatively less expensive
for actively traded accounts. However, a non-wrapped pricing arrangement can be more
cost effective for accounts that do not experience frequent trading activity.
Our wrap fee schedules are as follows:
Wrap Fee Schedule
Account Size Maximum Annual
Account Fee
$0 - $499,999 2.00%
$500,000 - $999,999 1.75%
$1,000,000 - $3,499,999 1.50%
$3,500,000 and Above 1.25%
The fee that you pay for a wrap fee account includes payment of all brokerage
commissions and other trading costs of transactions effected through TD Ameritrade.
However, the fee does not include mark-ups, markdowns, or payment of brokerage
commissions from transactions made by a broker-dealer other than TD Ameritrade. Such
brokerage commissions, mark-ups or markdowns, and other costs would be charged to
you in addition to the advisory fee. Where applicable, you will be required to pay other
charges such as:
custodial fees,
SEC fees,
internal fees and expenses charged by mutual funds or exchange traded funds
(“ETFs”), and
other fees and taxes on brokerage accounts and securities transactions.
Account Fees are negotiable. Some deciding factors can include the size of the account,
the complexity of your financial situation or investment strategy, and your choice of
Wealth Advisor. It is possible that different Wealth Advisors may charge different fees for
providing the same service to clients. The specific level of services you will receive and
the fees you will be charged will be specified in your advisory services agreement.
Mutual fund companies, ETFs, and variable annuity issuers charge internal fees and
expenses for their products. These fees and expenses are in addition to any advisory
fees charged by us. Complete details of these internal fees and expenses are explained
in the prospectuses for each investment. You are strongly encouraged to read these
explanations before investing any money. You may ask us any questions you have about
fees and expenses.
Your Wealth Advisor, in their capacities as registered representatives of Purshe Kaplan
Sterling Investments, will retain a portion of mutual fund sales loads; distribution fees;
surrender charges; and variable annuity commissions received on products purchased
through Purshe Kaplan Sterling Investments. Such payments create a conflict of interest
by giving the representative an incentive to recommend one investment company,
product or share class over another. Your Wealth Advisor does not receive such
payments on investments purchased through other broker-dealers or investment adviser
platforms.
Catalyst Wealth Management employs policies and procedures to promote the selection
of the lowest-cost share class. As a regular practice, our Wealth Advisors attempt to
identify the lowest-cost share class available to the client, given the client’s investment
goals and other considerations such as services provided to the client by third parties.
We are committed to reducing conflicts of interest by: (1) providing education and training
to representatives; (2) conducting periodic reviews of investment selections made by
representatives, including share classes; and (3) providing appropriate disclosure and
notification to clients about our investment practices.
If you purchase mutual funds through the custodian/broker-dealer, you may pay a
transaction fee that would not be charged if the transactions were made directly through
the mutual fund company. Also, mutual funds held in accounts at brokerage firms may
pay internal fees that are different from funds held at the mutual fund company. While
you may purchase shares of mutual funds directly from the mutual fund company without
a transaction fee, those investments would not be part of our advisory relationship with
you. This means that they would not be included in our investment strategies, investment
performance monitoring, or portfolio reallocations.
Your Wealth Advisor may recommend our wrap program to you and, as a result of your
participation in this program, will receive a portion of the fee you pay Catalyst Wealth
Management. These payments are made as long as you participate in the program and
can be greater than other forms of compensation had you paid separately for investment
advice, brokerage and other services provided to you as part of a wrap fee program. As
a result, your Wealth Advisor has a financial incentive to recommend this program over
other programs or services that may be available to you.