A. Firm Information
The Herbst Group, LLC (“The Herbst Group” or the “Advisor”) is a registered investment advisor with the U.S.
Securities and Exchange Commission (“SEC”). The Advisor is organized as a Limited Liability Company (“LLC”)
under the laws of the state of Delaware. The Herbst Group was founded in 2020 and is owned by Brian G. Herbst
(Chief Executive Officer and Co-Chief Investment Officer) and Donald G. Capelin (Co-Chief Investment Officer
and Managing Director) and is operated by Mr. Herbst, Mr. Capelin, and Hannah A. Perez (Chief Operations
Officer and Chief Compliance Officer). This Disclosure Brochure provides information regarding the qualifications,
business practices, and the advisory services provided by The Herbst Group.
B. Advisory Services Offered
The Herbst Group offers investment advisory services to individuals, high net-worth individuals, trusts, estates,
college athletes, 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 toward each Client and seeks to mitigate potential
conflicts of interest. The Herbst Group’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.
Wealth Management Services
The Herbst Group provides Clients with wealth management services, which generally include discretionary
management of investment portfolios as well as a broad range of comprehensive financial planning and consulting
strategies.
Investment Management Services – The Herbst Group provides customized investment advisory solutions for its
Clients. This is achieved through continuous personal Client contact and interaction while providing discretionary
investment management and related advisory services. The Herbst Group 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. The Herbst Group 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, and/or options contracts as appropriate to meet the needs of its Clients. The
Advisor may retain certain legacy investments based on the Client’s interests, investment objectives, market
conditions, and/or tax considerations.
The Herbst Group’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. The Herbst Group will construct, implement, and monitor the portfolio to ensure it maintains alignment
with 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.
The Herbst Group evaluates and selects investments for inclusion in Client portfolios only after applying its internal
due diligence process. The Herbst Group may recommend, on occasion, redistributing investment allocations to
diversify the portfolio. The Herbst Group 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. The Herbst Group 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, changes in risk tolerance of the Client, generating
cash to meet Client needs, or any risk deemed unacceptable for the Client’s risk tolerance.
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 the 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
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 earns a new (or
increases 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.
At no time will The Herbst Group 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.
Financial Planning Services – The Herbst Group will typically provide a variety of financial planning and consulting
services to Clients as part of its wealth management services. 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, philanthropic giving, 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. The Herbst Group may also
refer Clients to an accountant, attorney, insurance agent, or other specialists as appropriate for their unique
situation.
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.
Retirement Plan Advisory Services
The Herbst Group 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:
• Vendor Analysis
• Plan Participant Enrollment and Education Tracking
• Investment Policy Statement (“IPS”) Design and Monitoring
• Investment Oversight Services (ERISA 3(21))
• Investment Management Services (ERISA 3(38))
• Performance Reporting
• Ongoing Investment Recommendations and Assistance
• ERISA 404(c) Assistance
These services are provided by The Herbst Group 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 The Herbst Group’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 The Herbst Group 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 – The Herbst Group, in connection with the Client, will develop a
strategy that seeks to achieve the Client’s goals and objectives.
• Asset Allocation – The Herbst Group will develop a strategic asset allocation that is targeted to meet the
investment objectives, time horizon, financial situation, and tolerance for risk of each Client.
• Portfolio Construction – The Herbst Group will develop a portfolio for the Client that is intended to meet
the stated goals and objectives of the Client.
• Investment Management and Supervision – The Herbst Group will provide investment management and
ongoing oversight of the Client’s investment portfolio.
D. Wrap Fee Programs
The Herbst Group includes securities transaction fees, custody fees, and other fees and expenses (herein
“Covered Costs”) together with its investment advisory fees. Including these fees into a single asset-based fee is
considered a “Wrap Fee Program.” The Advisor customizes its investment management services for its Clients.
The Advisor sponsors The Herbst Group Wrap Fee Program solely as a supplemental disclosure regarding the
combination of fees. Depending on the level of trading required for the Client’s account[s] in a particular year, the
Client may pay more or less in total fees than if the Client paid its own transaction fees. Please see Appendix 1 –
Wrap Fee Program Brochure, which is included as a supplement to this Disclosure Brochure.
E. Assets Under Management
As of December 31, 2022, The Herbst Group manages $168,826,909 in Client assets, all of which are managed
on a discretionary basis. Clients may request more current information at any time by contacting the Advisor.