A Description of Our Firm, Portfolio Management Services, and Wrap Fees
Easley Investment Consultants Inc. is a Mississippi corporation founded in 2018 by Carl
“Cal” R. Easley, Jr. and Carl R. Easley. Effective as of August 31, 2023, Cal R. Easley, Jr.
is the sole shareholder of the firm. We are registered as an investment advisor with the
SEC and our principal offices are located in Flowood, Mississippi. We are the sponsor and
portfolio manager of the EIC Wrap Fee Program. This program allows you to pay a single
fee that covers the costs of EIC’s advisory services, in addition to trade execution, custod
y1,
and other standard brokerage services and cost
s2 (our “Wrap Fee”). EIC’s portfolio
management services are provided to clients exclusively as part of the EIC Wrap Fee
Program.
The information contained in this Wrap Fee Brochure describes our investment advisory
services, practices, and fees as they relate to your engagement of EIC for portfolio
management services under the EIC Wrap Fee Program. As used throughout this Wrap
Fee Brochure, the words “we,” “our,” “firm,” “EIC” and “us” refer to Easley Investment
Consultants Inc., and the words “you,” “your,” and “client” refer to you as either a client
or prospective client of our firm.
EIC offers portfolio management services that are tailored to the investment objectives and
financial circumstances of our clients. The client will deposit their assets at an independent
custodial firm (the “Custodian”), typically a licensed broker-dealer, and grant us limited
authority to buy and sell securities either on a
discretionary or
non-discretionary basis.
The full scope of our authority regarding the client’s account will be set forth in a written
advisory agreement entered with the client. We act as your fiduciary, responsible for the
management of your investment account(s) held at the Custodian, where assets are held in
your name.
Our portfolio management services are typically offered on a
discretionary basis only,
however, we may agree to provide such services on a
non-discretionary basis, upon client
request.
➢ Where you grant us
discretionary authority, you authorize our firm and our
investment advisor representatives to implement our investment recommendations
1 Custodial fees may not be covered where the client elects to utilize a Custodian other than those recommended by
EIC.
2 The specific brokerage costs covered within our Wrap Fee vary depending on the Custodian selected by the client.
For example, where the client elects to engage Charles Schwab & Co., Inc. as the Custodian for the client’s wrap fee
account, the costs of markups, markdowns, and spreads are not covered by EIC’s Wrap Fee, and the client will bear
such costs separately. Clients are urged to review the account opening documentation of their selected Custodian for
full details on any costs and fees that may be excluded from EIC’s Wrap Fee.
directly within your account held at the Custodian
without obtaining your specific
consent prior to each transaction.
➢ Where we agree to manage your account on a
non-discretionary basis, we will
provide you with investment recommendations which you are free to accept or
reject, in whole or in part. We will only implement our investment
recommendations within your account held at the Custodian upon your request and
with your prior approval.
Clients always have the ability to impose reasonable restrictions on our management of
their account(s), including the ability to instruct us not to purchase certain specific
securities, industry sectors, and/or asset classes. All such requests must be provided to us
in writing. While we generally attempt to accommodate such restrictions, we reserve the
right to reject such investment limitations if they would frustrate our management of your
account, or for any other reason, in our sole discretion. We will notify you promptly if we
are unable to honor any of your investment restrictions or limitations.
A description of our portfolio management services and applicable Wrap Fee is as follows:
Portfolio Management Services. Our firm offers ongoing and continuous portfolio
management services that are uniquely tailored to your financial circumstances. Through
periodic consultations with you, we will gather information regarding your financial goals,
investment objectives, tolerance for risk, and the time horizon for your investments. The
information we typically request in this process will include your current and expected
income level, tax information, investment experience, current and expected cash needs,
current portfolio construction/asset allocation, and risk tolerance level, among other items.
Based on our analysis of these factors, we will prepare an investment policy statement (or
similar documentation used to establish your investment objectives and suitability)
outlining parameters for our management of your account(s). We will then implement an
initial investment strategy and portfolio intended to align with your unique financial
situation and goals. Client portfolios are typically constructed utilizing a diversified
combination of mutual funds, exchange traded funds (“ETFs”), individual bonds, stocks,
and other instruments, as may be appropriate for the individual client.
In some instances, we may also engage certain independent third party money managers
(“TPMMs”) to directly manage all or a portion of your account on a discretionary basis.
You will be provided with a copy of each recommended TPMM’s Form ADV Part 2 firm
brochure (or the equivalent) prior to the allocation of your assets to any TPMM managed
account(s) (each a “TPMM Account”). Where a TPMM is engaged, we will continue to
act as your fiduciary and a “co-advisor” to your TPMM Accounts. We will determine the
suitability of the TPMM’s investment program, communicate any changes in your
investment profile to the TPMM, and recommend changes in your TPMM allocations as
we believe to be in your best interests. The TPMM shall be responsible for all portfolio
management and trading functions related to your TPMM Accounts.
Following implementation of your initial investment portfolio, we will monitor the
performance of your investments (including any held in TPMM Accounts) and implement
changes within your account as needed or appropriate, in consideration of current
economic conditions, our market opinions and assumptions, and your individual financial
circumstances and goals. It is your ongoing responsibility to advise us in writing of any
material changes to your financial circumstances.
At our discretion, portfolio management clients may also receive complimentary financial
planning services. These services are described in detail in our firm brochure. If you did
not receive a copy of our firm brochure, we will provide one to you, free of charge, by
contacting us at the telephone number on the cover page of this Wrap Fee Brochure.
Wrap Fees. EIC charges annual Wrap Fees which are calculated as a percentage of the
market value of your account in accordance with the below fee schedule. Our Wrap Fees
may be negotiated on a per client basis, and some clients may pay fees at a higher or lower
rate than those stated below.
For purposes of our billing and fee schedule, we may elect, in our sole discretion, to
combine the value of all of your related accounts (including any accounts held individually
or jointly by you, your spouse, your minor children, or your business, including retirement
accounts) for purposes of determining the applicable fee level. These “household” account
values would be combined and assessed the same fee rates under our fee schedules below.
Wrap Fee Schedule – Discretionary Accounts
Assets Under Management Annualized Fee
$0 – $500,000 1.25%
$500,001 - $2,000,000 1.00%
$2,000,001 - $5,000,000 0.75%
$5,000,001 and above Negotiable
Wrap Fee Schedule – Non-Discretionary Accounts
Assets Under Management Annualized Fee
All Accounts 0.50%
Our Wrap Fee covers the costs of advisory services, trade execution, custody, and certain
other standard brokerage services and costs generated in connection with our management
of your account held at the Custodian.
Our Wrap Fees are calculated and payable monthly, in advance, based on the value of your
account (including any cash balances) at the end of the prior billing period as calculated
by the Custodian of your account. Wrap Fees are charged on a blended basis (e.g., a
discretionary portfolio management account valued at $600,000 will pay a 1.25% per
annum fee on the first $500,000 of assets and a 1.00% per annum fee on the balance). The
initial advisory fee applicable to your account will be based on the opening value of your
account as of the date on which we begin to provide services and shall be pro-rated for
partial periods at the beginning or end of our engagement.
Clients may make additions or withdrawals from their account at any time, however, Wrap
Fees for funds added during a billing period will be charged the following month, without
pro-ration. Clients should note that some or all of the investments in their account may be
intended as long-term investments and withdrawals of cash and premature liquidations of
securities positions may impair the achievement of your investment objectives.
All security pricing is done by the Custodian that will maintain your account(s) titled in
your name. We will rely on this pricing in determining the Wrap Fee attributable to your
account(s). The Custodian may use various pricing services such as Reuters and Standard
& Poor’s to price securities held in your account. For actively traded securities, these
services use the actual last reported sale price. For less actively traded securities such as
bonds, these services will use the appropriate valuation methodology to determine the
value of the security.
Our Wrap Fees are directly deducted from your account held at the Custodian upon your
written approval of such arrangement and our periodic submission to the Custodian of a
written invoice reflecting the amount of advisory fees to be charged to your account. Your
authorization for direct fee deduction is set forth in our written advisory agreement and/or
the account opening documents of your Custodian. We will liquidate money market shares
or use cash balances from your account to pay our Wrap Fee, however, if money market
shares or cash value are not available other investments may be liquidated. Please note that
unexpected or premature liquidation of investments to pay our advisory fees may impair
the performance of your account. We do not offer direct paper or electronic invoicing of
our Wrap Fees.
The Custodian will independently send an account statement to you, typically monthly, but
no less than quarterly, identifying the amount of funds and each security in your account
at the end of the period and setting forth all transactions in your account during the period,
including the amount of any fees paid to us.
We encourage you to review our reports and
the Custodian’s account statements carefully and promptly upon receipt. If you believe
we have miscalculated our fees or if there is any other issue with your account, you should
contact us immediately at the phone number listed on the cover page of this Wrap Fee
Brochure.
Portfolio management services may be terminated at any time by either party, within five
(5) business days of entering an advisory agreement, without penalty. Thereafter, our
portfolio management services may be terminated by either party on thirty (30) days’
written notice to the non-terminating party. In the event of termination, we shall be
compensated by a pro-rated advisory fee based on the number of days in the terminating
period during which services were provided. A refund of any excess pre-paid advisory fees
shall be returned to you promptly following termination of our services.
While we believe our Wrap Fees to be reasonable for the services provided, lower fees for
comparable services may be available from other sources. Our fees are negotiable and we
may enter into fee arrangements that are materially different than those described above
with certain clients. Any change in fees applicable to your account (outside of normal
movement between fee tiers) will not go into effect unless we provide you with thirty (30)
days’ notice of any proposed change and the opportunity to terminate our services.
Broker-Dealer Selection and Recommendation. Clients maintain the discretion to select the
Custodian(s) and broker-dealer(s) to be used for custody of their assets and for the
execution of transactions within their portfolio management account(s). Clients
independently engage the Custodian(s) and broker-dealers of their desire by executing the
appropriate account opening documentation of the selected firm(s), and in doing so,
authorize our firm to direct the execution of transactions for the client’s account through
the selected Custodian and broker-dealer firm(s).
We typically recommend that clients participating in the EIC Wrap Fee Program engage
the brokerage and custodial services of Charles Schwab & Co., Inc., 3000 Schwab Way,
Westlake, Texas 76262 (“Schwab”), an independent SEC-registered broker-dealer and
Member FINRA/SIPC. EIC is independently owned and operated and not affiliated with
Schwab. Schwab does not monitor or control the activities of our firm or its personnel. If
selected as your Custodian, Schwab will act solely as the Custodian of your assets and the
executing broker for transactions
in your account, and not as your investment advisor.
Schwab will hold your assets in a brokerage account or accounts and buy and sell securities
and execute other transactions when instructed to do so by you or EIC. We do not have the
discretion to determine the commission rates at which transactions are to be affected for
your account and we may recommend that clients engage different Custodians and
executing brokers in the future.
In recommending broker-dealers, we have an obligation to seek the “best execution” of
transactions in your account. This duty requires that we seek to execute securities
transactions for clients such that the total costs or proceeds in each transaction are the most
favorable under the circumstances. The determinative factor in the analysis of best
execution is not the lowest possible commission cost, but whether the transaction
represents the best qualitative execution, taking into consideration the full range of the
recommended broker-dealer’s services. Some of the factors we may consider when
evaluating a broker-dealer for best execution include, without limitation, the broker-
dealer’s execution and custodial capabilities, commission rates, financial responsibility,
responsiveness and customer service, research services/ancillary brokerage services
provided, and other factors that we consider relevant.
Therefore, we will seek competitive commission rates, but we may not obtain the lowest
possible commission rates for specific account transactions. With this in consideration, our
firm will continue to recommend that clients engage Schwab until their services do not
result, in our opinion, in best execution of client transactions.
If the client selects a Custodian other than Schwab for execution of transactions (i.e.,
directed brokerage), you are advised that we may be unable to seek best execution of your
transactions and your commission costs may be higher than those experienced by clients
who elect to utilize our recommended Custodian. For example, in a directed brokerage
account, you may pay higher brokerage commissions and/or receive less favorable prices
on the underlying securities purchased or sold for your account because we may not be
able to aggregate your order with the orders of other clients. In addition, where you direct
brokerage, we may place orders for your transactions after we place transactions for clients
using our recommended Custodians. We reserve the right to reject your request to use a
particular Custodian other than Schwab if such selection would frustrate our management
of your account, or for any other reason.
Clients are advised that we receive certain benefits (typically in the form of access to
technology or services that assist us in the management and administration of client
accounts and/or other free or discounted services or products) in connection with our
recommendation of Schwab’s brokerage and custodial services to clients. For a full
description of our brokerage practices, including the benefits we receive from Schwab and
the related conflicts of interest, please see Item 12 in our firm brochure.
B Certain Conflicts of Interest Related to Wrap Fees
As described above, the costs of advisory services, trade execution, custody, and certain
other standard brokerage services and costs generated in connection with our management
of your account held at the Custodian will be absorbed by and are included within the Wrap
Fee paid to our firm. EIC will retain the remaining amount of the Wrap Fee you pay for
our advisory services after our payment of the brokerage commissions and certain other
costs generated in your account. This creates an incentive for us to trade your account less
frequently and/or to invest your account in assets that may be subject to waived or reduced
brokerage commissions (if available), resulting in EIC retaining a greater portion of the
Wrap Fee paid by the client. Additionally, you should consider that the Custodian we
typically recommend to clients enrolled in our wrap fee program, Schwab, does not charge
commissions (or transaction fees) for certain online trades of U.S. exchange-listed equities,
U.S. exchange-listed ETFs, and no-transaction-fee (“NTF”) mutual funds. This means that,
in most cases, when we buy these types of securities, we can do so without paying
commissions to Schwab. To address the foregoing conflicts, we manage your account in
strict accordance with your investment policy statement and our ongoing fiduciary duty to
you.
Since the Wrap Fee associated with your account covers the costs of advisory services,
trade execution, custody, and certain other standard brokerage services and costs incurred
in your account, it may represent a premium relative to what you might otherwise pay in a
similar investment program operated as a non-wrap fee arrangement (i.e., where our
advisory fees and the separate costs of transaction-based charges and commissions,
custodial fees, and other related costs are each billed separately to you) (a “Non-Wrap
Fee”). Specifically, you should consider the following:
➢ The benefits under a wrap fee program depend, in part, upon the size of the account,
the costs associated with managing the account, and the frequency or type of
securities transactions executed in the account. For example, a wrap fee program
may not be suitable for all accounts, including but not limited to accounts holding
primarily, and for any substantial period of time, cash or cash equivalent
investments, fixed income securities or no-transaction-fee mutual funds, or any
other type of security that can be traded without commissions or other transaction
fees.
➢ In order to evaluate whether a wrap fee arrangement is appropriate for you, you
should compare the agreed-upon Wrap Fee and any other costs associated with
participating in the EIC Wrap Fee Program with the amounts that would be charged
by other advisors, broker-dealers, and Custodians, for advisory fees, brokerage, and
execution costs, and custodial services comparable to those provided under the EIC
Wrap Fee Program.
Please consider that, depending upon the level of our Wrap Fee, the amount of portfolio
activity in your account, the value of the services that we provide to you, and other factors,
the Wrap Fee we charge you may or may not exceed the aggregate cost of the advisory and
brokerage services you will receive if they were to be provided and charged to you
separately. Stated differently, by participating in Wrap Fee arrangement, you may end up
paying more or less than you would through a Non-Wrap Fee arrangement where a lower
advisory fee is charged, but the brokerage commissions are passed directly to you by the
broker. As a general matter, Wrap Fee arrangements are relatively less expensive for
actively traded accounts. However, they may result in higher overall costs to the client in
accounts that experience little trading activity. Accordingly, we encourage clients to
discuss with EIC whether a wrap fee arrangement is appropriate for their account at the
inception of the advisory relationship.
C Additional Costs and Expenses
Our Wrap Fee covers the combined costs of EIC’s investment advice and the costs of trade
execution, custody, and certain other standard brokerage services and costs incurred in your
account. Most portfolio management client accounts are expected (but not required) to
engage the custodial and brokerage services of our recommended Custodian, Schwab.
Where you select Schwab as your Custodian, you are advised that our Wrap Fee does not
cover fees charged by other brokers for execution of trades that settle into the client’s
Schwab account (i.e., “trade-away” fees), markups, markdowns, bid-ask spreads, and
selling concessions, custody charges for non-publicly traded securities, margin interest
charges (if applicable), electronic funds and wire transfer fees, transfer taxes, odd-lot
differentials, and other similar fees and charges, which shall be paid separately by the
client. If you elect to use a Custodian other than Schwab, there may be material differences
in the specific brokerage costs and charges that are covered within our Wrap Fee.
As part of our portfolio management services, we may invest your account in mutual funds
and/or ETFs. The Wrap Fee that you pay to our firm is separate and distinct from the
internal management fees and other expenses that may be charged by mutual funds and/or
ETFs to their shareholders, for which you will be separately responsible.
We do not share in any portion of the foregoing additional fees and expenses. To fully
understand the total costs you will incur by engaging our services, you should review the
prospectus of each mutual fund, ETF, and/or TPMM advisory program in which you are
invested and the contractual arrangement with the Custodian of your account.
D No Compensation Paid For Referrals
We do not pay any referral fees or additional compensation of any kind with respect to
referrals of clients to our firm for portfolio management services offered under the EIC
Wrap Fee program.
Rollover Recommendations
As part of our investment advisory services to you, we may recommend that you roll assets
from your employer’s retirement plan, such as a 401(k), 457, or ERISA 403(b) account
(collectively, a “Plan Account”), to an individual retirement account, such as a SIMPLE
IRA, SEP IRA, Traditional IRA, or Roth IRA (collectively, an “IRA Account”) that we
will manage on your behalf. We may also recommend rollovers from IRA Accounts to
Plan Accounts, from Plan Accounts to Plan Accounts, and from IRA Accounts to IRA
Accounts. When we provide any of the foregoing rollover recommendations we are acting
as fiduciaries 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.
If you elect to roll the assets to an IRA that is subject to our management, we will charge
you an asset-based fee as set forth in the advisory agreement you executed with our firm.
This creates a conflict of interest because it creates a financial incentive for our firm to
recommend the rollover to you (i.e., receipt of additional fee-based compensation). You
are under no obligation, contractually or otherwise, to complete the rollover. Moreover, if
you do complete the rollover, you are under no obligation to have the assets in an IRA
managed by our firm. Due to the foregoing conflict of interest, when we make rollover
recommendations, we operate under a special rule that requires us to act in your best
interests and not put our interests ahead of yours.
Under this special rule’s provisions, we must:
➢ meet a professional standard of care when making investment recommendations
(give prudent advice);
➢ never put our financial interests ahead of yours when making recommendations
(give loyal advice);
➢ avoid misleading statements about conflicts of interest, fees, and investments;
➢ follow policies and procedures designed to ensure that we give advice that is in
your best interests;
➢ charge no more than a reasonable fee for our services; and
➢ give you basic information about conflicts of interest.
Many employers permit former employees to keep their retirement assets in their company
plan. Also, current employees can sometimes move assets out of their company plan before
they retire or change jobs. In determining whether to complete the rollover to an IRA, and
to the extent the following options are available, you should consider the costs and benefits
of a rollover.
Note that an employee will typically have four options in this situation:
1. leaving the funds in your employer’s (former employer’s) plan;
2. moving the funds to a new employer’s retirement plan;
3. cashing out and taking a taxable distribution from the plan; or
4. rolling the funds into an IRA rollover account.
Each of these options has positives and negatives. Because of that, along with the
importance of understanding the differences between these types of accounts, we will
provide you with a written explanation of the advantages and disadvantages of both account
types and the basis for our belief that the rollover transaction we recommend is in your best
interests.
As an alternative to providing you with a rollover recommendation, we may instead take
an entirely educational approach in accordance with the U.S. Department of Labor’s
Interpretive Bulletin 96-1. Under this approach, our role will be limited only to providing
you with general educational materials regarding the pros and cons of rollover transactions.
We will make no recommendation to you regarding the prospective rollover of your assets
and you are advised to speak with your trusted tax and legal advisors with respect to
rollover decisions. As part of this educational approach, we may provide you with materials
discussing some or all of the following topics: the general pros and cons of rollover
transactions; the benefits of retirement plan participation; the impact of pre-retirement
withdrawals on retirement income; the investment options available inside your Plan
Account; and high level discussion of general investment concepts (e.g., risk versus return,
the benefits of diversification and asset allocation, historical returns of certain asset classes,
etc.). We may also provide you with questionnaires and/or interactive investment materials
that may provide a means for you to independently determine your future retirement
income needs and to assess the impact of different asset allocations on your retirement
income. You will make the final rollover decision.