A. S.F. Ehrlich Associates, Inc. (“SFE”) is a New Jersey corporation formed in July 1996.
SFE was initially registered as an investment adviser with the SEC, was then registered
with various state agencies, and most recently transitioned back to SEC registration
effective July 26, 2018. SFE is principally owned by John Zeltmann who is SFE’s
President and Chief Compliance Officer.
B. SFE offers to provide investment advisory, financial planning, and consulting services to
its clients, who generally include individuals, high net worth individuals, and their
affiliated trusts and estates.
INVESTMENT ADVISORY SERVICES
Clients can engage SFE to provide discretionary investment advisory services on a fee-
only basis. When engaging SFE to provide investment advisory services, clients are
required to enter into an investment advisory agreement with SFE setting forth the terms
and conditions of the engagement (including termination), describing the scope of the
services to be provided, and the fee that is due from the client. SFE’s annual investment
advisory fee is based upon a percentage of the market value of the assets placed under its
management. Upon request or as an ancillary part of the investment advisory process,
SFE may at its discretion provide financial planning and consulting services without
additional charge. If, however, SFE determines that the client seeks or requires financial
planning or consulting services that exceed the anticipated scope under the investment
advisory agreement, it will offer to provide those services under the terms and conditions
of a separate agreement.
SFE’s investment advisory services are specifically tailored to the needs of each client.
Before providing investment advisory services, an investment adviser representative will
collaborate with the client to develop investment objectives, which are based upon an
assessment of factors that typically include capital preservation, risk tolerance, income
production, liquidity requirements, client preferences, asset and liability levels, and
investment preferences and restrictions. After developing the client’s investment
objectives, SFE will execute on its customized investment strategy. Clients may, at any
time, impose restrictions in writing on investing in certain securities or types of
securities. Generally, SFE allocates client investment assets among exchange-listed
securities, mutual funds, exchange traded funds (“ETFs”), individual bonds and bond
funds, cash, and cash equivalents on a discretionary basis. Once allocated, SFE provides
ongoing monitoring and review of account performance and asset allocation as compared
to client investment objectives and may periodically execute account transactions based
upon those reviews or other triggering events.
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
Upon client request, SFE may agree to provide financial planning and consulting services
(including investment and non-investment related matters) on a stand-alone separate fee
basis. SFE’s financial planning and consulting fees are negotiable depending upon the
level and scope of the services required and the professionals providing the services.
Before engaging SFE to provide financial planning or consulting services, clients are
required to enter into a either a financial planning agreement, or a consulting agreement
with SFE setting forth the terms and conditions of the engagement (including
termination), describing the scope of the services to be provided, and a description of the
applicable fee that will become due from the client before SFE will begin the process.
MISCELLANEOUS
Limitations of Financial Planning and Non-Investment Consulting/Implementation
Services. SFE may provide financial planning and related consulting services either as
part of the investment advisory engagement or according to the terms and conditions of a
stand-alone financial planning agreement. SFE does not serve as a law firm, accounting
firm, or insurance agency, and no portion of SFE’s services should be construed as legal,
accounting, or insurance implementation services. Accordingly, SFE does not prepare
estate planning documents, tax returns, or sell insurance products. Unless specifically
agreed in writing, neither SFE nor its representatives are responsible to implement any
financial plans or financial planning advice; provide ongoing financial planning services;
or provide ongoing monitoring of financial plans or financial planning advice. The client
is solely responsible to revisit the financial plan or financial planning advice with SFE, if
desired. The client retains absolute discretion over all financial planning and related
implementation decisions and is free to accept or reject any recommendation from SFE
and its representatives in that respect. SFE’s financial planning and consulting services
are completed upon communicating its recommendations to the client, upon delivery of
the written financial plan, or upon termination of the applicable agreement. To the extent
requested by a client, SFE may recommend the services of other professionals for certain
non-investment implementation purposes (i.e., attorneys, accountants, insurance agents,
etc.). Clients are under no obligation to engage
the services of any recommended
professional who is responsible for the quality and competency of the services they
provide.
Portfolio Trading Activity / Inactivity. As part of its investment advisory services, SFE
will review client portfolios on an ongoing basis to determine if any trades are necessary
based upon various factors, including but not limited to investment performance, market
conditions, fund manager tenure, style drift, account additions/withdrawals, the client’s
financial circumstances, and changes in the client’s investment objectives. Based upon
these and other factors, there may be extended periods when SFE determines that upon
review, trades within a client’s portfolio are not prudent. Clients nonetheless remain
subject to the fees described in Item 5 during periods of portfolio trading inactivity.
Retirement Plan Rollovers – No Obligation / Potential for Conflict of Interest. A client or
prospective client leaving an employer typically has four options regarding an existing
retirement plan (and may engage in a combination of these options): (i) leave the money
in the former employer’s plan, if permitted, (ii) roll over the assets to the new employer’s
plan, if one is available and rollovers are permitted, (iii) roll over to an Individual
Retirement Account (“IRA”), or (iv) cash out the account value (which could, depending
upon the client’s age, result in adverse tax consequences). If SFE recommends that a
client roll over their retirement plan assets into an account to be managed by SFE, such a
recommendation creates a conflict of interest if SFE will earn a new (or increase its
current) advisory fee as a result of the rollover. No client is under any obligation to roll
over retirement plan assets to an account managed by SFE.
ERISA / IRC Fiduciary Acknowledgment. When SFE provides investment advice to a
client about the client’s retirement plan account or individual retirement account, it does
so as a fiduciary within the meaning of Title I of the Employee Retirement Income
Security Act (“ERISA”) and/or the Internal Revenue Code (“IRC”), as applicable, which
are laws governing retirement accounts. Because the way SFE makes money creates
certain conflicts with client interests, SFE operates under a special rule that requires it to
act in the client’s best interest and not put its interests ahead of the client’s. Under this
special rule’s provisions, SFE must: meet a professional standard of care when making
investment recommendations (give prudent advice); never put its financial interests ahead
of the client’s when making recommendations (give loyal advice); avoid misleading
statements about conflicts of interest, fees, and investments; follow policies and
procedures designed to ensure that SFE gives advice that is in the client’s best interest;
charge no more than is reasonable for SFE’s services; and give the client basic
information about conflicts of interest.
Asset Aggregation / Reporting Services. SFE may provide access to reporting services
through one or more third-party aggregation / reporting platforms that can reflect all of
the client’s investment assets, including those investment assets that the client has not
engaged SFE to manage (the “Excluded Assets”). SFE’s service for the Excluded Assets
is strictly limited to reporting, and specifically excludes investment management or
implementation. Because SFE does not have trading authority for the Excluded Assets,
the client (and/or a designated investment professional), and not SFE, will be exclusively
responsible for implementing any recommendations for the Excluded Assets and the
resulting performance or related activity (such as timing and trade errors) pertaining to
the Excluded Assets. The third-party aggregation / reporting platforms may also provide
access to financial planning information and applications, which should not be construed
as services, advice, or recommendations provided by SFE. Accordingly, SFE will not
agree to be responsible for any adverse results a client may experience if the client
engages in financial planning or other functions available on the third party reporting
platforms without SFE’s participation or oversight.
Client Obligations. When performing its services, SFE is not required to verify any
information received from the client or from the client’s designated professionals and is
expressly authorized to rely on that information. Clients are responsible to promptly
notify SFE if there is ever any change in their financial situation or investment objectives
for the purpose of reviewing or amending SFE’s services or previous recommendations.
C. SFE tailors its investment advisory services specifically to the needs of each client. To
begin the investment advisory process, an investment adviser representative will
coordinate with each client to develop their investment objectives. Then, SFE allocates or
recommends that the client allocate investment assets consistent with the designated
investment objectives. The client may, at any time, impose reasonable restrictions, in
writing, on SFE’s services.
D. SFE does not participate in a wrap fee program.
E. As of December 31, 2023, SFE had $150,680,447 in client assets under management on a
discretionary basis.