We offer a wrap fee program as described in this Wrap Fee Program Brochure. A wrap fee program
is generally considered any arrangement under which clients receive investment advisory services
and the execution of client transactions for a specified fee or fees not based upon transactions in
their accounts. All of our investment advisory clients will be offered the wrap fee program
structure that includes, as a single fee, the securities transaction costs for trading in Client
accounts along with the investment advisory fees earned by our firm. While traditional Wrap Fee
Programs are often rigid, pre-packaged investment programs, our firm customizes its investment
strategies individually for its Clients. Prior to receiving services through the Program, clients are
required to enter into a written agreement with our firm setting forth the relevant terms and
conditions of the investment advisory relationship (the “Agreement”).
Our Wrap Advisory Services
Family Office Services
We are a multi-generational firm that assists families by creating intentional plans around their
life, family, business, community, and wealth. Our Firm offers comprehensive wealth planning
services to our investment management clients. Supported by MoneyGuidePro®, our Firm is able
to conduct an analysis of your current situation and identify appropriate financial planning and
investment management techniques to help you to meet your specific financial objectives. Such
services include the following:
Family Board Meetings:
• Build a structure and plan based on the values and what is most important to
the family
• Extensive information and data gathering from all family members
• Facilitate quarterly meetings
• Create an education and development plan for coming generations
• Facilitate the creation of the family’s purpose, mission, and constitution
• Provide a structure for governance between the family and business
• Facilitate family engagement with business leadership
Business Consulting:
• Review and share overall goals and plan for the business
• Understand all key stake holders in the business, shareholders, voting and non voting,
employees, customers, suppliers, and partners
• Coordinate all key business advisors with family and leadership team
• Share strengths, weaknesses, opportunities, and threats with coming
generations to enhance understanding of how the business works and makes
money
• Review and educate coming generations on the financials of the business
• Economic and business volatility education
• Build a structure of communication between the family and business leadership
• Review, enhance and share succession plans
• Review strategies with real estate related to the business
• Review exit strategies and the creation of liquidity events
• Provide access to financing sources at various public and private levels
Advisor Team Management:
• Coordination and management of your advisor team to work in a proactive role
• Develop an advisor communication plan
• Insure advisor alignment with family’s goals and plans
Digital Organization:
• Provide a digital vault to organize all documents, information and provide
coordinated access to advisors that need to be in the know
• Provide a personal financial website to access all your assets in one place
• Provide a wealth planning timeline to keep your top priorities in front of your
advisors for proactive focus and completion
• Provide a tax planning worksheet for proactive planning
Asset Management and Planning:
• Cash flow management now and in the future
• Tax mitigation now and in the future
• Asset protection from unforeseen liabilities
• Family and charitable gifting plans
• Investment management of all asset types inside and outside of your investment
management resources
• Review, planning, and tax mitigation for retirement, taxable and tax-free
investments
• Access to private real estate and equity opportunities
Estate Planning:
• Creation and customization of your plan to provide for your family and heirs
• Review of documents in place and review of strategy in line with goals and plans
• Utilization of marketability discounts
• Tax mitigation currently and for subsequent generations
• Coordinate with business succession or exit plans
• Coordination with subsequent and prior generations
• Development of a plan to share the necessary points of the planning with
subsequent generations
Risk Management and Asset Protection:
• Review and enhance the risk management processes and procedures for the family and
their assets
• Review and adjust asset titling for maximum protection
• Review and recommend on all insurance coverages, property and casualty for
the business and personal side, life insurance for the business and personal side,
health care now and in the future
• Review original intent and strategy still in line with goals and objectives of the
family and the business
• Institute annual review of all insurance coverage, pricing on a proactive basis
Charitable Planning:
• Based on the families’ values and goals development of a multi-generational
plan to support those organizations that are in alignment
• Review and implementation of various strategies from Donor Advised Funds to
Private Foundations
• Extensive time with subsequent generations to determine overlap and
differences in organizations to support
Investment Management Services
For clients that desire our asset management services, we offer discretionary investment
management and investment advisory services for a flat dollar or asset based fee. These services
include investment analysis, allocation of investments, quarterly portfolio statements, financial
commentaries, wealth planning services (as described above) and ongoing monitoring of client
portfolios. We primarily allocate client assets among various mutual funds, exchange-traded funds
(“ETFs”), cash, individual debt (bonds) and equity securities in accordance with their stated
investment objectives. All of which are considered asset allocation categories for the client’s
investment strategy.
We will work with you to obtain necessary information regarding your financial condition,
investment objectives, liquidity requirements, risk tolerance, time horizons, and any restrictions
on investing. This information enables us to determine the portfolio best suited for your
investment objective and needs.
In performing our services, we shall not be required to verify any information received from you
or from other professionals. If you request, we may recommend and/or engage the services of
other professionals for implementation purposes. You have the right to decide whether or not to
engage the services of any such recommended professional.
Once we have determined the types of investments to be included in your portfolio and allocated
them, we will provide ongoing portfolio review and management services. This approach requires
us to review your portfolio at least quarterly.
We will rebalance the portfolio, as we deem appropriate, to meet your financial objectives. We
trade these portfolios and rebalance them on a discretionary basis based on our market views and
on your objectives, using our investment process. We tailor our advisory services to meet the
needs of our clients and seek to ensure that your portfolio is managed in a manner consistent with
those needs and objectives.
In all cases, you have a direct and beneficial interest in your securities, rather than an undivided interest
in a pool of securities. We do have limited authority to direct the Custodian to deduct our investment
advisory fees from your accounts, but only with the appropriate authorization from you.
Where appropriate, we may also provide advice about any type of legacy position(s) and/or other outside
investment(s) held with a client’s overall investment portfolio. Clients may engage us to manage and/or
advise on certain investment products that are not maintained at their traditional custodian, such as
variable life insurance and annuity contracts and assets held in employer sponsored retirement plans and
qualified tuition plans (i.e., 529 plans).
You are advised and are expected to understand that our past performance is not a guarantee of
future results. Certain market and economic risks exist that may adversely affect an account’s
performance. This could result in capital losses in your account.
Disclosure Regarding Rollover Recommendations
We are fiduciaries under the Investment Advisers Act of 1940 and when we provide investment
advice to you regarding your retirement plan account or individual retirement account, we are
also 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.
We have to act in your best interest and not put our interest ahead of yours.
At the same time,
the way we make money creates some conflicts with your interests.
A client or prospect 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) rollover 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). Our Firm may recommend an investor roll over plan assets to an IRA for which
our Firm provides investment advisory services. As a result, our Firm and its representatives may
earn an asset-based fee. In contrast, a recommendation that a client or prospective client leave
their plan assets with their previous employer or roll over the assets to a plan sponsored by a new
employer will generally result in no compensation to our Firm. Our Firm therefore has an economic
incentive to encourage a client to roll plan assets into an IRA that our Firm will manage, which
presents a conflict of interest. To mitigate the conflict of interest, there are various factors that
our Firm will consider before recommending a rollover, including but not limited to: (i) the
investment options available in the plan versus the investment options available in an IRA, (ii) fees
and expenses in the plan versus the fees and expenses in an IRA, (iii) the services and
responsiveness of the plan’s investment professionals versus those of our Firm, (iv) protection of
assets from creditors and legal judgments, (v) required minimum distributions and age
considerations, and (vi) employer stock tax consequences, if any. Our Firm’s Chief Compliance
Officer remains available to address any questions that a client or prospective client has regarding
the oversight.
Relative Cost of the Program
A wrap fee program allows our clients to pay a specified fee for investment advisory services and
the execution of transactions. Clients do not pay brokerage commissions, markups or transaction
charges for execution of transactions in addition to the advisory fee. By participating in a wrap fee
program, you may end up paying more or less than you would through a non-wrap fee program
where a lower advisory fee is charged, but trade execution costs are passed directly through to
you by the executing broker.
Our fees will vary depending on the level of engagement and are negotiated with the client.
Family office service fees are fixed and range from $0 to $250,000. Investment management fees
are based upon a percentage of assets under management not to exceed 1.50%. The fees will be
billed in arrears and on a quarterly basis on the value at the end of the calendar quarter. The initial
advisory fee will be prorated for the number of days in the current quarter that your account is
under management. The specific advisory fees are set forth in your Investment Advisory
Agreement. Fees may vary based on the size of the account, complexity of the portfolio, extent
of activity in the account or other reasons agreed upon by us and you as the client. Our employees
and their family related accounts are charged a reduced fee for our services.
As disclosed above, our Firm pays for the transaction costs incurred for the execution of
transactions. We pay this fee based on each trade or transaction with the Custodian. We do not
charge our clients higher advisory fees based on their trading activity , but you should be aware
that we may have an incentive to limit our trading activities in your account(s) because we incur
the fees for executed trades. In order to mitigate this conflict of interest, we will fulfill our fiduciary
duty by always acting in the client’s best interest.
At our discretion, we will aggregate asset amounts in accounts from your same household
together to determine the advisory fee for all your accounts. We may do this, for example, where
we also service accounts on behalf of your minor children, individual and joint accounts for a
spouse, and/or other types of related accounts. This consolidation practice is designed to allow
you the benefit of an increased asset total, which could potentially cause your account(s) to be
assessed a lower advisory fee based on the asset levels available in our fee schedule.
The independent qualified custodian holding your funds and securities will debit your account
directly for the advisory fee and pay that fee to us. You will provide written authorization
permitting the fees to be paid directly from your account held by the qualified custodian. Further,
the qualified custodian agrees to deliver an account statement at least quarterly directly to you
indicating all the amounts deducted from the account including our advisory fees. See Item 15 for
details.
At our discretion, you may pay the advisory fees by check or credit card. Fees can be paid via
check directly to our firm from your personal bank account or can be invoiced and processed
through a third-party nonaffiliated service, Card Connect. Clients will be asked to enter their bank
account or credit card at Card Connect to enable credit card or ACH payments. While Card Connect
allows firms like ours to receive payments directly from the client’s credit card or bank account, it
does not give our Firm access to the bank account itself, nor to any of the client’s credit card or
bank account information. ACFO is not able to initiate any additional payments via Card Connect
as agreed upon and outlined in the Agreement.
You are encouraged to review your account statements for accuracy.
Either ACFO or the client may terminate the management agreement immediately upon written
notice to the other party. The management fee will be pro-rated to the date of termination, for
the calendar quarter in which the cancellation notice was given. Depending on your billing
arrangement and what is agreed to in the Agreement, any earned advisory fee will be billed to the
client up to the date of termination. Upon termination, you are responsible for monitoring the
securities in your account, and we will have no further obligation to act or advise with respect to
those assets.
In no case are our fees based on, or related to, the performance of your funds or investments.
ACFO is the sponsor and portfolio manager of this Wrap Fee Program. ACFO receives investment
advisory fees paid by our clients for investment advisory services covered under this Wrap Fee
Program.
Other Types of Fees & Expenses
In addition to the advisory fees paid to ACFO, clients may also incur certain charges imposed by
other third parties, custodians, trust companies, banks and other financial institutions (collectively
“Financial Institutions”). These additional charges may include custodial fees, fees charged by the
Independent Managers, margin costs, charges imposed directly by a mutual fund or ETF in a
client’s account, as disclosed in the fund’s prospectus (e.g., fund management fees and other fund
expenses), deferred sales charges, foreign exchange tax, odd-lot differentials, transfer taxes, wire
transfer and electronic fund fees, and other fees and taxes on brokerage accounts and securities
transactions. ACFO’s brokerage practices are described at length in Item 12, below.
There are certain securities or investments a client wishes to purchase or hold in their account.
These investment products may carry fees from the delivering firm to the Custodian. Custodians
may also charge an additional fee for select securities and/or alternative investments to be
included in the holdings of their account. Our Firm will communicate in writing to the client on the
Advisory Agreement or Addendum if our firm will reimbursing these “holding” fees. The
reimbursement of these unique situations are based on the total assets in the client portfolio and
client relationship. For some of the fee reimbursements, certain custodians do not allow our firm
to directly reimburse additional fees directly into a client account. In those cases, the client
reimbursement is processed and recorded with ACFO’s quarterly billing statement.
Examples of the investments outside the typical securities that may have additional fees at the
Custodian:
• REITS (To be billed by custodian - $100 initial purchase fee, $125 annual holding
fee, $100 redemption fee). ACFO pays the REIT fee. As indicated on the Advisory
Agreement with ACFO, any legacy REITs held by client prior to their engagement
with Alpha Capital are excluded from this arrangement and clients would be billed
the annual holding fee for noted positions.
• Private Investments (To be billed by custodian - $100 initial purchase fee, $125
annual holding fee, $100 redemption fee)
• Charitable Donor Funds – Fidelity bills an additional fee not to exceed 0.60% to
accommodate for Charitable Donor Funds
• American Depository Receipts