A. Firm Information
Sovereign Financial Group, Inc. (“Sovereign” or the “Advisor”) is a registered investment advisor with the U.S.
Securities and Exchange Commission. The Advisor is organized as a Corporation under the laws of the State of
Connecticut. Sovereign was founded in July 2003 and is owned and operated by Charles Failla, Managing
Member. The Advisor conducts business under (“doing business as” or “dba” names) of Massey Financial Services
and Stone Arch Wealth Advisors, LLC. This Disclosure Brochure provides information regarding the qualifications,
business practices, and the advisory services provided by Sovereign.
B. Advisory Services Offered
Sovereign offers investment advisory services to individuals, high net worth individuals, trusts, estates, charitable
organizations, businesses, and retirement plans (each referred to as a “Client”).
The Advisor serves as a fiduciary to Clients, as defined under the applicable laws and regulations. As a fiduciary,
the Advisor upholds a duty of loyalty, fairness and good faith towards each Client and seeks to mitigate potential
conflicts of interest. Sovereign's fiduciary commitment is further described in the Advisor’s Code of Ethics. For more
information regarding the Code of Ethics, please see Item 11 – Code of Ethics, Participation or Interest in Client
Transactions and Personal Trading.
Investment Management Services
Sovereign provides customized investment advisory solutions for its Clients. This is achieved through continuous
personal Client contact and interaction while providing discretionary and non-discretionary investment management
and related advisory services. Sovereign works closely with each Client to identify their investment goals and
objectives as well as risk tolerance and financial situation in order to create a portfolio strategy. Sovereign will then
construct an investment portfolio, consisting of low-cost, diversified mutual funds and/or exchange-traded funds
(“ETFs”) to achieve the Client’s investment goals. The Advisor may also utilize individual stocks, bonds or options
contracts to meet the needs of its Clients. The Advisor may retain certain types of investments based on a Client’s
legacy investments based on portfolio fit and/or tax considerations.
Sovereign’s investment strategies are primarily long-term focused, but the Advisor may buy, sell or re-allocate
positions that have been held for less than one year to meet the objectives of the Client or due to market
conditions. Sovereign will construct, implement and monitor the portfolio to ensure it meets the goals, objectives,
circumstances, and risk tolerance agreed to by the Client. Each Client will have the opportunity to place reasonable
restrictions on the types of investments to be held in their respective portfolio, subject to acceptance by the Advisor.
Sovereign evaluates and selects investments for inclusion in Client portfolios only after applying its internal due
diligence process. Sovereign may recommend, on occasion, redistributing investment allocations to diversify the
portfolio. Sovereign may recommend specific positions to increase sector or asset class weightings. The Advisor
may recommend employing cash positions as a possible hedge against market movement. Sovereign may
recommend selling positions for reasons that include, but are not limited to, harvesting capital gains or losses,
business or sector risk exposure to a specific security or class of securities, overvaluation or overweighting of the
position[s] in the portfolio, change in risk tolerance of the Client, generating cash to meet Client needs, or any risk
deemed unacceptable for the Client’s risk tolerance.
At no time will Sovereign accept or maintain custody of a Client’s funds or securities, except for the limited authority
as outlined in Item 15 – Custody. All Client assets will be managed within the designated account[s] at the
Custodian, pursuant to the terms of the advisory agreement. Please see Item 12 – Brokerage Practices.
Retirement Accounts – When the Advisor provides investment advice to Clients regarding ERISA retirement
accounts or individual retirement accounts (“IRAs”), the Advisor is 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. When deemed to be in the Client’s best interest, the Advisor will
provide investment advice to a Client regarding a distribution from an ERISA retirement account or to roll over the
assets to an IRA, or recommend a similar transaction including rollovers from one ERISA sponsored Plan to
Page 5
another, one IRA to another IRA, or from one type of account to another account (e.g. commission-based account
to fee-based account). Such a recommendation creates a conflict of interest if the Advisor will earn a new (or
increase its current) advisory fee as a result of the transaction. No client is under any obligation to roll over a
retirement account to an account managed by the Advisor.
Cash Management
Sovereign makes available to clients the FICA For Advisors cash management program (“FICA Program”) offered
by StoneCastle Network, LLC (“StoneCastle”), an affiliate of StoneCastle Cash Management, LLC. The FICA
Program allows customers the ability to protect their money by placing it in deposit accounts at banks, savings
institutions and credit unions (collectively, “Insured Depositories”) in a manner that maintains full insurance of the
funds by the Federal Deposit Insurance Corporation (“FDIC”) or National Credit Union Administration (“NCUA”),
whichever is applicable. Funds will be deposited within StoneCastle’s network of Insured Depositories (“Deposit
Network”). StoneCastle requires no minimum deposit to open a FICA Program account. Sovereign may earn a fee
from StoneCastle if clients participate in this program. Sovereign will assist clients in signing up for this program
and facilitating the transfer of funds between the client’s
like-named accounts.
Use of Independent Managers
Sovereign will recommend that Clients utilize one or more unaffiliated investment managers or investment
platforms (collectively “Independent Managers”) for all or a portion of a Client’s investment portfolio, based on the
Client’s needs and objectives. In certain instances, the Client may be required to authorize and enter into an
investment management agreement with the Independent Manager[s] that defines the terms in which the
Independent Manager[s] will provide its services. The Advisor will perform initial and ongoing oversight and due
diligence over each Independent Manager to ensure the strategy remains aligned with Clients investment
objectives and overall best interests. The Advisor will also assist the Client in the development of the initial policy
recommendations and managing the ongoing Client relationship. The Client, prior to entering into an agreement
with an Independent Manager, will be provided with the Independent Manager's Form ADV Part 2A - Disclosure
Brochure (or a brochure that makes the appropriate disclosures).
Financial Planning Services
Sovereign will typically provide a variety of financial planning and consulting services to Clients, pursuant to a
written financial planning agreement. Services are offered in several areas of a Client’s financial situation,
depending on their goals and objectives. Generally, such financial planning services involve preparing a formal
financial plan or rendering a specific financial consultation based on the Client’s financial goals and objectives. This
planning or consulting may encompass one or more areas of need, including but not limited to, investment
planning, retirement planning, personal savings, education savings, insurance needs and other areas of a Client’s
financial situation.
A financial plan developed for, or financial consultation rendered to the Client will usually include general
recommendations for a course of activity or specific actions to be taken by the Client. For example,
recommendations may be made that the Client start or revise their investment programs, commence or alter
retirement savings, establish education savings and/or charitable giving programs.
Sovereign may also refer Clients to an accountant, attorney or other specialists, as appropriate for their unique
situation. For certain financial planning engagements, the Advisor will provide a written summary of the Client’s
financial situation, observations, and recommendations. For consulting or ad-hoc engagements, the Advisor may
not provide a written summary. Plans or consultations are typically completed within six (6) months of contract date,
assuming all information and documents requested are provided promptly.
Financial planning and consulting recommendations pose a conflict between the interests of the Advisor and the
interests of the Client. For example, the Advisor has an incentive to recommend that Clients engage the Advisor for
investment management services or to increase the level of investment assets with the Advisor, as it would
increase the amount of advisory fees paid to the Advisor. Clients are not obligated to implement any
recommendations made by the Advisor or maintain an ongoing relationship with the Advisor. If the Client elects to
act on any of the recommendations made by the Advisor, the Client is under no obligation to implement the
transaction through the Advisor.
Page 6
Retirement Plan Advisory Services
Sovereign provides retirement plan advisory services on behalf of the retirement plans (each a “Plan”) and the
company (the “Plan Sponsor”). The Advisor’s retirement plan advisory services are designed to assist the Plan
Sponsor in meeting its fiduciary obligations to the Plan and its Plan Participants. Each engagement is customized
to the needs of the Plan and Plan Sponsor. Services generally include:
● Investment Policy Statement (“IPS”) Design and Monitoring
● Investment Oversight Services (ERISA 3(21))
● Investment Management Services (ERISA 3(38))
● Investment Selection and Analysis
● Benchmarking Services
These services are provided by Sovereign serving in the capacity as a fiduciary under the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”). In accordance with ERISA Section 408(b)(2), the Plan
Sponsor is provided with a written description of Sovereign’s fiduciary status, the specific services to be rendered
and all direct and indirect compensation the Advisor reasonably expects under the engagement.
C. Client Account Management
Prior to engaging Sovereign to provide investment advisory services, each Client is required to enter into one or
more agreements with the Advisor that define the terms, conditions, authority and responsibilities of the Advisor
and the Client. These services may include:
• Establishing an Investment Strategy – Sovereign, in connection with the Client, will develop a strategy that
seeks to achieve the Client’s goals and objectives.
• Asset Allocation – Sovereign will develop a strategic asset allocation that is targeted to meet the investment
objectives, time horizon, financial situation and tolerance for risk for each Client.
• Portfolio Construction – Sovereign will develop a portfolio for the Client that is intended to meet the stated
goals and objectives of the Client.
• Investment Management and Supervision – Sovereign will provide investment management and ongoing
oversight of the Client’s investment portfolio.
D. Wrap Fee Programs
Sovereign does not manage or place Client assets into a wrap fee program. Investment management services are
provided directly by Sovereign.
E. Assets Under Management
As of December 31, 2023, Sovereign manages $716,898,042 in Client assets, $688,588,572 of which are managed
on a discretionary basis and $28,309,370 on a non-discretionary basis. Sovereign also has Assets Under
Advisement of $38,700,000. Clients may request more current information at any time by contacting the Advisor.