A. MATERETSKY FINANCIAL GROUP WRAP FEE PROGRAM
The Registrant provides investment management services on a wrap fee basis in
accordance with the Registrant’s investment management wrap fee program (the
“Program”) Under the Program, the Registrant is able to offer participants non-
discretionary investment management services, for a single specified annual Program fee,
inclusive of trade execution (excluding mark-ups and mark-downs), custody, reporting,
and investment management fees. All prospective Program participants should read both
the Registrant’s Brochure and this Wrap Fee Program Brochure, and ask any corresponding
questions that they may have, prior to participation in the Program.
Registrant’s negotiable annual Program fee shall generally be based upon a percentage (%)
of the market value and type of assets placed under Registrant’s management, between
0.45% and 1.40%. Fees shall vary depending upon various objective and subjective factors,
including but not limited to: the amount of assets to be managed; personal and familial
relationships; account composition; the scope and complexity of the engagement; the
anticipated number of meetings and servicing needs; related accounts; future earning
capacity; anticipated future additional assets; the professional(s) rendering the service(s);
negotiations with the client; prior fee schedules; and competition. As a result of these
factors, similarly situated clients could pay different fees, and the services to be provided
by the Registrant to any particular client could be available from other advisers at lower
fees. Since the Registrant’s representative shall receive a portion of the advisory fee
charged to the client, a material conflict of interest arises, because an increase in the
management fee paid by the client may result in increased compensation received by the
Registrant’s representative. Registrant’s Chief Compliance Officer, Ira Materetsky,
remains available to address any questions that a client or prospective client may have
regarding the above fee disparity, impact on account performance, and conflict of interest.
To the extent specifically requested by a client, the Registrant generally provides financial
planning and/or consulting services (including investment and non-investment related
matters, including estate planning, insurance planning, etc.) inclusive of the Program fee.
In the event that the client requires extraordinary planning and/or consultation services (to
be determined in the sole discretion of the Registrant), the Registrant may determine to
charge for such additional services, the dollar amount of which shall be set forth in a
separate written notice to the client. Registrant believes that it is important for the client to
address financial planning issues on an ongoing basis. Registrant’s Program fee, as set forth
at Item 5 below, will remain the same whether or not the client determines to address
financial planning issues with Registrant. Please Note: The Registrant does not serve as
an attorney or accountant, and no portion of our services should be construed as legal or
accounting services. Accordingly, we do not prepare estate planning documents or tax
returns. If requested by the client, Registrant may recommend the services of other
professionals for implementation purposes, including the services of the Registrant’s
representatives, in their individual capacities, as licensed insurance agents or as registered
representatives of Private Client Services (“PCS”). The client is under no obligation to
engage the services of any such recommended professional. The client retains absolute
discretion over all such implementation decisions and is free to accept or reject any
recommendation from the Registrant. Moreover, it remains the client’s responsibility to
promptly notify the Registrant if there is ever any change in the client’s financial situation
or investment objectives for the purpose of reviewing/evaluating/revising Registrant’s
previous recommendations and/or services. Please Note: If the client engages any
professional, recommended or otherwise, and a dispute arises thereafter relative to such
engagement, the client agrees to seek recourse exclusively from the engaged professional.
At all times, the engaged licensed professional(s), and not Registrant, shall be responsible
for the quality and competency of the services provided.
Fee Calculation: The fee is not charged on the basis of a share of capital gains upon or
capital appreciation of any portion of the funds of an advisory client, pursuant to Section
205(a)(1) of the Investment Advisers Act of 1940, as amended (hereinafter the “Act”).
Fee Dispersion. Registrant, in its discretion, may charge a lesser investment advisory fee,
charge a flat fee, waive its fee entirely, or charge fee on a different interval, based upon
certain
criteria (i.e. anticipated future earning capacity, anticipated future additional assets,
dollar amount of assets to be managed, related accounts, account composition, complexity
of the engagement, anticipated services to be rendered, grandfathered fee schedules,
employees and family members, courtesy accounts, competition, negotiations with client,
etc.). Please Note: As result of the above, similarly situated clients could pay different fees.
In addition, similar advisory services may be available from other investment advisers for
similar or lower fees. ANY QUESTIONS: Registrant’s Chief Compliance Officer, Ira
Materetsky, remains available to address any questions that a client or prospective client
may have regarding advisory fees.
Fee Payment: Clients will be charged in advance at the beginning of each calendar quarter
based upon the value (market value or fair market value in the absence of market value),
of the client's account at the end of the previous quarter. Fees are prorated for accounts
opened during the quarter. An additional fee for the current quarter may be assessed if
assets are deposited after the beginning of the quarter, prorated based on the number of
calendar days remaining in the quarter during which the service will be in effect. No portion
of the fee will be credited to the client for the current calendar quarter should any
withdrawals from the portfolio occurring in the same calendar quarter.
MISCELLANEOUS
Client Responsibilities: In performing any of its services, the Registrant shall not be
required to verify any information received from the client or from the client’s other
professionals and is expressly authorized to rely thereon. Furthermore, unless the client
indicates to the contrary in the client’s Investment Objective Confirmation letter, the
Registrant shall assume that there are no restrictions on its services, other than to manage
the account in accordance with the client’s designated investment objective. Moreover, it
remains each client’s responsibility to promptly notify the Registrant if there is ever
any change in their financial situation or investment objectives for the purpose of
revising the Registrant’s previous recommendations or services.
Please Note: Investment Performance: As a condition to participating in the Program,
the participant must accept that past performance may not be indicative of future results,
and understand that the future performance of any specific investment or investment
strategy (including the investments and/or investment strategies purchased and/or
undertaken by the Registrant) may not: (1) achieve their intended objective; (2) be
profitable; or, (3) equal historical performance level(s) or any other performance level(s).
B. Participation in the Program may cost more or less than purchasing such services
separately. Also, the Program fee charged by Registrant for participation in the Program
may be higher or lower than those charged by other sponsors of comparable wrap fee
programs.
Depending upon the percentage wrap-fee charged by the Registrant, the amount of
portfolio activity in the client's account, and the value of custodial and other services
provided, the wrap fee may or may not exceed the aggregate cost of such services if they
were to be provided separately and/or if the Registrant were to negotiate transaction fees
and seek best price and execution of transactions for the client's account. However, the
Registrant only offers its investment advisory services on a wrap fee basis. Conflict of
Interest: Because wrap program transaction fees and/or commissions are being paid by
Registrant to the account custodian/broker-dealer, Registrant has an economic incentive to
minimize the number of trades in the client's account. ANY QUESTIONS: Registrant’s
Chief Compliance Officer, Ira Materetsky, remains available to address any questions that
a client or prospective client may have regarding a wrap fee arrangement and the
corresponding conflict of interest a wrap fee arrangement creates.
C. The Program’s wrap fee does not include certain charges and administrative fees,
including, but not limited to, transaction charges (including mark-ups and mark-downs)
resulting from trades effected through or with a broker-dealer other than Pershing, transfer
taxes, odd lot differentials, exchange fees, interest charges, American Depository Receipt
agency processing fees, and any charges, taxes or other fees mandated by any federal, state
or other applicable law or otherwise agreed to with regard to client accounts. Such fees
and expenses are in addition to the Program’s wrap fee.
D. Registrant’s related persons who recommend the Materetsky Financial Group Wrap Fee
program to clients do not receive compensation as a result of a client’s participation in the
wrap fee program.