Item 5 – Additional Compensation 19
Item 6 – Supervision 19
ADV Part 2B Brochure Supplement – Derek David Ripp 20
Item 1 – Cover Page 20
Item 2 – Educational Background and Business Experience 21
Item 3 – Disciplinary History 21
Item 5 – Additional Compensation 21
Item 6 – Supervision 21
ADV Part 2B Brochure Supplement – John R. Toungate 22
Item 1 – Cover Page 22
Item 2 – Educational Background and Business Experience 23
Item 3 – Disciplinary History 23
Item 5 – Additional Compensation 23
Item 6 – Supervision 23
Austin Wealth Management, LLC ADV Part 2AB Page 5 of 36
Austin Wealth Management, LLC (“AWM”) is a Registered Investment Adviser (“Adviser”) which offers investment advice and other financial services to clients.
We provide investment advice through Investment Adviser Representatives (“Advisor”) associated with us. These individuals are appropriately licensed, qualified,
and authorized to provide advisory services on our behalf. In addition, all advisors are required to have a college degree, professional designation, or equivalent
professional experience.
AWM was founded in 2009 by Daniel Davila III (now retired) and Kevin X. Smith. Derek Ripp serves as the Chief Compliance Officer for AWM.
Our core principles are Education, Advocacy, and Accountability. We serve as professional educators and client‐driven advocates because we believe that a well‐
informed client is necessary to make important financial decisions. Our mission is to constantly improve the way financial advice is given, by using illustrations and
analogies to make complex concepts easier to grasp, so that people will make better decisions to improve their quality of life and sense of financial security. We have
built a team of professionals with specialized knowledge, who work together to collectively serve our clients by communicating effectively, making sure changes take
place, progress is made, and our clients are happy.
Services
We offer two primary services designed for individuals, high net worth individuals, trusts, and estates: (a) an up front, one‐time comprehensive Financial Planning
Project and (b) ongoing Wealth Management services, which includes both financial planning and investment advisory services. For select clients, we offer Financial
Planning only and Investment Advisory only services.
Because AWM is a registered investment adviser, we are required to meet certain fiduciary standards when providing investment advice to clients. Additionally,
when we provide investment advice related to a retirement plan account or an individual retirement account, we are considered 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. As such, we
are required to act in your best interest and not put our interest ahead of yours, even though our compensation creates some conflicts with your interests in that the
more you have us manage, the more we can earn. Our clients however are under no obligation to use services recommended by our associated persons.
Furthermore, we believe that our recommendations are in the best interests of our clients and are consistent with our clients’ needs.
We also provide consulting and advisory services to small business owners and human resources teams for employer‐sponsored retirement plans in accordance with
the Employee Retirement Income Security Act (“ERISA”) through our 401(PRO) service. The services provided are ERISA 3(21) and 3(38) fiduciary services. When
delivering ERISA services, we will perform these services for the retirement plan as a fiduciary under ERISA Section 3(21)(A)(ii) and will act in good faith and with the
degree of diligence, care and skill that a prudent person rendering similar services would exercise under similar circumstances. These services are provided on a
discretionary basis for ERISA 3(38) services and a non‐discretionary basis for ERISA 3(21) services.
Additionally, we provide ongoing sub‐advisory services to other investment advisers.
1. FinancialPlanningProject
The Financial Planning Project consists of an initial evaluation of the client’s financial situation and the presentation of a comprehensive financial plan. In performing
this service, we typically examine and analyze your overall financial situation, which may include issues such as taxes, insurance needs, overall debt, credit, business
planning, retirement savings and reviewing your current investment program. Our services may include all or only one of the items listed below, depending upon the
scope of our engagement with you:
Financial Planning Project Services
Data Collection and Organization Detailed collection and organization of all relevant financial data
Goal Planning Prioritizing financial objectives and organizing a strategy accordingly
Cash Flow Budgeting Extensive cash flow analysis and budgeting
Insurance Planning Life, disability and long‐term care insurance and annuity analysis
Estate Planning Review of existing estate plan and proposed updates
Retirement Income Planning Advance income distribution strategies
To produce your comprehensive financial plan, it is essential that you provide the information and documentation we request regarding your income, investments,
taxes, insurance, estate plan, etc. We will discuss your investment objectives, needs and goals, but you are obligated to inform us of any changes. We do not verify
any information obtained from you, your attorney, accountant or other professionals.
At the conclusion of the financial planning project, you will receive a written agreement detailing the services, fees, terms and conditions of a continued Wealth
Management services relationship with us. You will also receive this Brochure. You are under no obligation to continue working with us nor are you required to
implement the recommendations in your comprehensive financial plan through us. You may implement your financial plan recommendations through any financial
organization of your choice.
Austin Wealth Management, LLC ADV Part 2AB Page 6 of 36
2. WealthManagementServices
Most clients choose to engage AWM after the delivery of their comprehensive financial plan using our ongoing Wealth Management services, which consist of both
Financial Planning services and Investment Advisory services, as described below. The specific services provided will be included in your Wealth Management
services agreement.
Financial Planning Services
AWM will continue to assist the Client in making progress towards the goals outlined in the comprehensive financial plan and make adjustments as the Client’s
financial objectives change. Services may include, but are not limited to:
● Periodic review with the Client of the financial plan and progress metrics
● Facilitating transfers and other financial transactions on behalf of the Client
● Providing periodic guidance to the Client regarding important financial decisions
● Coordinating annual tax preparation with the Client’s CPA, as desired
● Adjusting the Client’s financial plan and objectives over time, as needs change
Note: Individual financial planning services provided will be based on the specific needs of each client.
Investment Advisory Services
AWM will provide discretionary investment management and advisory services to the client for assets the client maintains, either in a personal capacity as a direct
owner or in a fiduciary capacity, in investment accounts and any sub‐accounts thereof, collectively referred to as “Managed Assets.” Specifically, AWM will make
asset allocation and investment recommendations and will execute and monitor settlement of trades related to those recommendations. With a Managed Asset
account, you engage us to assist you in developing a personalized investment allocation program and custom‐tailored portfolio designed to meet your unique
investment objectives. The investments in the portfolio may include mutual funds, ETFs, stocks, bonds, equity options, futures, etc. In some cases, AWM may
delegate investment management and trading responsibility to various sub‐advisors with whom AWM may have an arrangement for more specialized investment
management services. Additional information about such sub‐advisors is available from AWM upon request. Clients may limit or instruct AWM as to investment
decisions by written objectives, guidelines, or restrictions furnished to AWM. AWM will not provide supervision, investment recommendations, or ongoing
management of client investments that are not identified as Managed Assets by AWM and the client.
We will meet with you to discuss your financial circumstances, investment goals and objectives, and to determine your risk tolerance. We will ask you to provide
statements summarizing current investments, income and other earnings, recent tax returns, retirement plan information, other assets and liabilities, wills and trusts,
insurance policies, and other pertinent information.
Based on the information you share with us, we will analyze your situation and recommend an appropriate asset allocation or investment strategy. You will be
provided with a targeted strategic allocation of assets by class. Our recommendations and ongoing management are based upon your investment goals and
objectives, risk tolerance, and the investment portfolio you have selected. We will monitor the account, trade as necessary, and communicate regularly with you.
Your circumstances shall be monitored in quarterly and annual account reviews. These reviews will be conducted in person, by telephone conference, and/or via a
written inquiry/questionnaire. We will work with you on an ongoing basis to evaluate your asset allocation as well as rebalance your portfolio to keep it in line with
your goals as necessary. We will be reasonably available to help you with questions about your account. As part of this service, we may provide any or all of the
items listed below:
● Review your present financial situation
● Monitor and track assets under management
● Provide portfolio statements, periodic rate of return reports, asset allocation statement, rebalanced statements as needed
● Advise on asset selection
● Determine market divisions through asset allocation models
● Provide research and information on performance and fund management changes
● Build a risk management profile for you
● Assist you in setting and monitoring goals and objectives
● Provide personal consultations as necessary upon your request or as needed.
You are obligated to notify us promptly when your financial situation, goals, objectives, or needs change. Under certain conditions, securities from outside accounts
may be transferred
into your advisory account; however, we may recommend that you sell any security if we believe that it is not suitable for the current
recommended investment strategy. You are responsible for any taxable events in these instances. Certain assumptions may be made with respect to interest and
inflation rates and the use of past trends and performance of the market and economy. Past performance is not indicative of future results.
Austin Wealth Management, LLC ADV Part 2AB Page 7 of 36
If you decide to implement our recommendations, we will help you open a custodial account(s). The funds in your account will generally be held in a separate
account, in your name, at an independent custodian, and not with us. We will recommend a custodian to you, however you may use a preferred custodian.
Trading may be required to meet initial allocation targets, after substantial cash deposits that require investment allocation, and/or after a request for a withdrawal
that requires liquidation of a position. Additionally, your account may be rebalanced or reallocated periodically in order to reestablish the targeted percentages of
your agreed upon asset allocation. This rebalancing or reallocation will occur on the schedule we have determined together. You will be responsible for any and all
tax consequences resulting from any rebalancing or reallocation of the account. We are not tax professionals and do not give tax advice. However, we will work with
your tax professionals to assist you with tax planning. You will have the opportunity to meet with us periodically to review the assets in your account.
You will enter into a separate custodial agreement with the custodian. This agreement, among other things, authorizes the custodian to take instructions from us
regarding all investment decisions for your account. We will select the securities bought and sold and the amount to be bought and sold, within the parameters of
the objectives and risk tolerance of your account. The custodian will effect transactions, deliver securities, make payments and do what we instruct. You are notified
of any purchases or sales through trade confirmations and statements that are provided by the custodian. These statements list the total value at the start of the
month, itemize all transaction activity during the month, and list the types, amounts, and total value of securities held as of the end of the month. Your statement
may be in either printed or electronic form based upon your preferences. You will at all times maintain full and complete ownership rights to all assets held in your
account, including the right to withdraw securities or cash, proxy voting and receiving transaction confirmations.
We will also provide you with a quarterly performance statement starting at the end of the first full calendar quarter after signing the Client Advisory Agreement.
These statements give you additional feedback regarding performance, educate you about our long‐term investment philosophy, and describe any changes in current
strategy and allocation along with the reasons for making these changes.
We obtain information from a wide variety of publicly available sources. We do not have any inside private information about any investments that are
recommended. All recommendations developed by us are based upon our professional judgment. We cannot guarantee the results of any of our recommendations.
Choosing which advice to follow is your decision.
As of 12/31/2022, we managed approximately $423,037,913 in assets on a discretionary basis, and another $9,685,443 in assets on a non‐discretionary basis.
We manage assets on a discretionary and/or non‐discretionary basis. If you have given us discretion, we can determine the following without your consent:
● Securities to be bought or sold for your account
● Amount of securities to be bought or sold for your account
● Broker‐dealer to be used for a purchase or sale of securities for your account
● Commission rates to be paid to a broker or dealer for your securities transaction.
If you have not given us the authority to manage your account on a discretionary basis, then we cannot trade in your account without your express permission.
3. QualifiedRetirementPlanAdvisoryServices
As part of our 401(PRO) service, we provide qualified retirement plan advisory services to small business owners and human resources teams to help them manage
the fiduciary liabilities and required services associated with such plans. Under a 3(21) and/or 3(38) fiduciary advisory arrangement, AWM will assist in the
recommendation of investments to plan sponsors, monitor the selected investments to ensure performance, provide participant education, and provide guidance
throughout the fiduciary process. As an ERISA Section 3(21) fiduciary, AWM does not have the authority to make and implement fiduciary decisions for the plan. Our
recommendations relieve plan sponsors of some of the liability associated with their investment decisions, when the decisions are based on our advice. This allows
for the plan sponsor/trustee to retain ultimate decision‐making authority for investments as they may accept or reject the recommendations. The plan sponsor is
ultimately responsible for the selection and monitoring of the 3(21) investment manager and implementation of any of the 3(21) investment manager’s investment
recommendations, and assumes responsibility and liability for any overriding decisions made by the plan sponsor. The plan sponsor will have the opportunity to
meet with us periodically to review the plan strategies.
Plan Sponsors or trustees may also elect to appoint AWM as a 3(38) fiduciary investment manager. Under this arrangement, AWM accepts discretion over plan assets
and assumes full responsibility and liability for fiduciary functions concerning decisions related to the plan assets. As a 3(38) plan fiduciary, we will conduct research
to determine appropriate investment selections and allocations and provide benchmarking analysis of the selections to the plan sponsor on an annual basis.
The data used to determine the investment options is based on estimated, forward‐looking performance of various asset classes and subclasses to create our forward
looking capital markets assumptions (e.g., expected return, expected standard deviation, correlation, etc.). Past performance and the return estimates of the asset
classes and the indexes that correspond to these asset classes may not be representative of actual future performance. Actual results could differ, based on various
factors including the expenses associated with the management of the portfolio, the portfolio’s securities versus the securities comprising the various indexes and
general market conditions. Before a specific investment is selected, other factors such as economic trends, which may influence the choice of investments and risk
tolerance, should be considered. We have the responsibility and authority to determine the investment line up including evaluating investment managers and
mutual fund companies, individual mutual funds, and money market funds which may be retained or replaced.
We also encourage you to consult with your other professional advisors since we do not provide legal advice that may affect asset classes or allocations used in the
modeling. We will apply guidelines you supply, as directed, however, compliance with these restrictions or guidelines, is your responsibility.
We will also assist you in creating a written investment policy statement (“IPS”) to document the plan’s investment goals and objectives as well as certain policies
governing the investment of assets. The IPS also identifies an investment strategy that seeks to attain the plan’s goals.
Austin Wealth Management, LLC ADV Part 2AB Page 8 of 36
We will assist with the establishment, execution, and interpretation of the Investment Policy Statement. The Investment Policy Statement serves as a guide to assist
in effectively supervising, monitoring, and evaluating the investment of the plan’s assets. We will either individually or in conjunction with other plan service
providers prepare a draft of the IPS based upon information furnished by you and your firm designed to profile various factors for the account such as investment
objectives, risk tolerances, projected cash flow, and demographics of your retirement plan participants. It is your responsibility to provide all necessary information
for the preparation of the IPS, particularly any limitations imposed by law or otherwise. This draft IPS is then submitted to you for review and approval. We
recommend that your professional advisors, such as an attorney, actuary, and/or accountant, also review the IPS.
Upon your final approval, it is our responsibility to adhere to the IPS in managing the retirement program. We encourage you to review accounts periodically to verify
our compliance with the IPS.
The Investment Policy Statement will be reviewed at least annually to determine whether stated investment objectives are still relevant and the continued feasibility
of achieving those objectives. However, the Investment Policy Statement is not expected to vary much from year to year and the IPS will not be updated to account
for short term changes in market conditions or the economic environment.
We will also monitor the current managed investment line up including the investment’s performance compared to an applicable benchmark. If we determine that a
fund no longer meets our criteria, we will select possible alternatives and assist in the selection of a replacement investment.
If you decide to implement any of our recommendations, we will help you open a custodial account(s) for the plan. The funds in your account will be held in a
separate account, in the plan’s name, at an independent custodian, not with us.
4. OngoingInstitutionalSub‐AdvisoryServices
AWM offers non‐discretionary investment management and advisory services to other investment advisers for assets the adviser maintains for its clients.
Specifically, AWM will make asset allocation and investment recommendations to the adviser related to the adviser’s clients in the form of risk‐based portfolio
models from which the adviser may choose, and upon the adviser’s approval will execute and monitor settlement of trades related to those portfolio models. AWM
can limit recommendations and make trades for the adviser’s clients according to the instructions furnished by the adviser to AWM in writing. AWM can also provide
performance related reporting to the adviser which the adviser may share with the adviser’s clients at the adviser’s discretion.
AWM does not provide supervision, investment recommendations, performance reporting, or ongoing management of an adviser’s clients investments that are not
identified as managed assets by AWM and the adviser.