A. Adero Partners, LLC (“Adero”) is part of the Focus Financial Partners, LLC (“Focus LLC”) partnership.
Specifically, Adero is a wholly-owned indirect subsidiary of Focus LLC. Ferdinand FFP Acquisition, LLC
is the sole managing member of Focus LLC. Ultimate governance of Focus LLC is conducted through
the board of directors at Ferdinand FFP Ultimate Holdings, LP. Focus LLC is majority-owned, indirectly
and collectively, by investment vehicles affiliated with Clayton, Dubilier & Rice, LLC (“CD&R”).
Investment vehicles affiliated with Stone Point Capital LLC (“Stone Point”) are indirect owners of
Focus LLC. Because Adero is an indirect, wholly-owned subsidiary of Focus LLC, CD&R and Stone Point
investment vehicles are indirect owners of Adero.
Focus LLC also owns other registered investment advisers, broker-dealers, pension consultants,
insurance firms, business managers and other firms (the “Focus Partners”), most of which provide
wealth management, benefit consulting and investment consulting services to individuals, families,
employers, and institutions. Some Focus Partners also manage or advise limited partnerships, private
funds, or investment companies as disclosed on their respective Form ADVs.
Adero is managed by James Knight, Michael Spector, Eric Swensen, Aaron White, Gregory Warner,
Jayne Smith, Sarah Robinson, and Mark Bates, (“Adero Principals”), pursuant to a management
agreement between Cambridge Partners, LLC and Adero Partners, LLC. The Adero Principals serve as
leaders and officers of Adero and, in that capacity, are responsible for the management, supervision
and oversight of Adero.
B. Adero offers clients discretionary investment management, financial planning, and other consulting
services as discussed in more detail below.
INVESTMENT MANAGEMENT SERVICES
Adero’s annual investment management services include, to the extent requested by the client,
financial planning and consulting services. In the event that the client requires extraordinary planning
and/or consultation services (to be determined at the sole discretion of Adero), Adero may determine
to charge for these additional services pursuant to a stand-alone Financial Planning and Consulting
Agreement.
Before engaging Adero to provide planning or consulting services, clients are required to enter into
an Investment Advisory Agreement with Adero setting forth the terms and conditions of the
engagement (including termination), describing the scope of the services to be provided, and the
portion of the fee that is due from the client.
To commence the investment management process, Adero representatives consult with clients to
discuss their financial condition, investment experience, time horizon, risk tolerance level, income
requirements, and other relevant factors. Adero representatives then help clients develop
investment objectives, individualized investment guidelines, and an asset allocation strategy. Adero
supervises account transactions on a continuous basis, and each client’s portfolio holdings and asset
allocations are monitored on at least a quarterly basis.
CONSULTING SERVICES (STAND-ALONE)
Adero may provide consulting services on investment and non-investment-related matters on a
stand-alone separate fee basis. Clients are required to enter into a separate agreement with Adero
setting forth the terms and conditions of the engagement. In certain circumstances, Adero personnel
may be engaged to assist in the preparation and filing of client tax returns for a set fee in addition to
any other service, when agreed upon in writing. Additionally, when appropriate as part of the financial
planning process, Adero may recommend the use of an independent third party estate planning tool
for an additional set fee, when agreed upon in writing. If requested by the client, Adero may
recommend the services of other professionals for implementation purposes. The client is under no
obligation to engage the services of Adero in these instances or any other recommended professional.
The client retains absolute discretion over all implementation decisions and is free to accept or reject
any recommendation from Adero.
Adero does not serve as a law firm, accounting firm, or insurance agency, and no portion of its services
should be viewed as legal, accounting, or insurance implementation services. Accordingly, Adero
does not prepare estate planning documents or sell insurance products. However, to the extent
requested by a client, Adero may recommend the services of other professionals for implementation
purposes (i.e., attorneys, accountants, insurance agents, etc.). The client is under no obligation to
engage the services of any recommended professional. The client retains absolute discretion over all
implementation decisions and is free to accept or reject any recommendation from Adero. If the client
engages any recommended professional, and a dispute arises from that engagement, the client
agrees to seek damages exclusively from the engaged professional.
OTHER
Adero is a fiduciary under the Employee Retirement Income Securities Act of 1974, as amended
(“ERISA”) with respect to investment management services and investment advice provided to ERISA
plan clients, including ERISA plan participants. Adero is also a fiduciary under section 4975 of the
Internal Revenue Code (the “IRC”) with respect to investment management services and investment
advice provided to individual retirement accounts (“IRAs”), ERISA plans, and ERISA plan participants.
As such, Adero is subject to specific duties and obligations under ERISA and the IRC that include,
among other things, prohibited transaction rules which are intended to prohibit fiduciaries from
acting on conflicts of interest. When a fiduciary gives advice in which it has a conflict of interest, the
fiduciary must either avoid or eliminate the conflict or rely upon a prohibited transaction exemption
(a “PTE.”)
As a fiduciary, we have duties
of care and of loyalty to you and are subject to obligations imposed on
us by the federal and state securities laws. As a result, you have certain rights that you cannot waive
or limit by contract. Nothing in our agreement with you should be interpreted as a limitation of our
obligations under the federal and state securities laws or as a waiver of any unwaivable rights you
possess.
Adero may provide investment advice about private investment funds, and may also recommend, on
a non-discretionary basis, that certain qualified clients consider an investment in private investment
funds. Adero’s role relative to the private investment funds will be limited to its initial and ongoing
due diligence and investment monitoring services. If a client determines to become a private fund
investor, the amount of assets invested in the fund(s) will be included for purposes of Adero
calculating its annual investment advisory fee. Adero clients are under absolutely no obligation to
consider or make an investment in a private investment fund(s).
While Adero may recommend allocating investment assets to private investment funds that are not
available directly to the public, Adero may also recommend that clients allocate investment assets to
publicly available mutual funds and exchange-traded funds (“ETFs”) that the client could obtain
without engaging Adero as an investment adviser. If a client or prospective client determines to
allocate investment assets to publicly available mutual funds or ETFs without engaging Adero as an
investment adviser, the client or prospective client would not receive the benefit of Adero’s initial
and ongoing investment advisory services. Certain mutual funds, such as those issued by Dimensional
Fund Advisors (“DFA”), are only available through professional intermediaries like registered
investment advisers. Adero may allocate client investment assets to DFA mutual funds. Upon the
termination of Adero’s services, clients may be restricted in transferring or purchasing additional
shares of DFA mutual funds or similarly restricted mutual funds.
Adero may allocate (and/or recommend that the client allocate) a portion of a client’s investment
assets among unaffiliated independent investment managers (“Independent Manager(s)”) in
accordance with the client’s designated investment objective(s). The client may be required to enter
into a separate agreement with the Independent Manager(s), which will set forth the terms of the
client’s engagement with the Independent Manager(s). In these situations, the Independent
Manager(s) will have day-to-day responsibility for the active discretionary management of the
allocated assets. Adero will continue to render investment supervisory services to the client relative
to the ongoing monitoring and review of account performance, asset allocation and client investment
objectives. The factors Adero considers in recommending Independent Manager(s) include the
client’s designated investment objective(s), management style, performance, reputation, financial
strength, reporting, pricing, and research. The investment management fee charged by the
Independent Manager(s) is separate from, and in addition to, Adero’s advisory fee as set forth in Item
5.
We implement investment advice on behalf of clients in certain held-away accounts – for example,
401(k) or 529 plan accounts – maintained either at the custodians with whom we have an institutional
relationship or at other independent third-party custodians. We have the capability to review,
monitor, and manage these held-away accounts in a fashion similar to the way in which we review,
monitor, and manage accounts that are not held away.
We have business arrangements with SCS Capital Management LLC (“SCS”) and Origin Investments
Group, LLC (“Origin”), which are indirect, wholly-owned subsidiaries of Focus LLC, under which
certain clients of Adero have the option of investing in certain private investment vehicles managed
by SCS or Origin. Adero is an affiliate of SCS and Origin by virtue of being under common control with
them. Please see Items 5, 10, and 11 of this Brochure for further details.
Additionally, we help our clients obtain certain insurance solutions from unaffiliated, third-party
insurance brokers by introducing clients to our affiliate, Focus Risk Solutions, LLC (“FRS”), a wholly
owned subsidiary of our parent company, Focus Financial Partners, LLC. Please see Items 5 and 10
for a fuller discussion of this service and other important information.
C. Adero provides investment advisory services specific to the needs of each client. Prior to providing
investment advisory services, an investment adviser representative will ascertain each client's
investment objective(s). Thereafter, Adero allocates and/or recommends that the client allocate
investment assets consistent with the designated investment objective(s). The client may, at any
time, impose reasonable restrictions, in writing, on Adero services. Clients may impose reasonable
restrictions on the management of their accounts if Adero determines, in its sole discretion, that the
conditions would not materially impact the performance of a management strategy or prove overly
burdensome for Adero’s management efforts.
In performing its services, Adero is not required to verify any information received from the client or
from the client’s other professional advisors and is expressly authorized to rely thereon upon. Under
all circumstances, clients must promptly notify Adero of any change in their financial situation or
investment objectives that would necessitate a review, evaluation or revision by Adero of previous
recommendations and/or services.
D. Adero does not participate in a wrap fee program.
E. As of December 31, 2023, Adero maintained approximately $4,035,668,036 in client assets under
management, with $4,008,672,908 being managed on a discretionary basis.