Item 5 – Additional Compensation ...................................................................................................... 22
Item 6 – Supervision ............................................................................................................................... 22
Firm Description
On October 16, 2012, Frank V. Gallo transitioned his investment advisory practice from a sole
proprietorship to an LLC by the name of Investors Portfolio Services LLC. (“Advisor”). This was a change
in business type and was considered a succession of Frank V. Gallo’s registered investment advisory
business. Firm CRD # 117299 remained the same. Frank V. Gallo is the principal owner and an
Investment Advisor Representative of Investors Portfolio Services LLC. The Advisor added discretionary
account management to its business offerings in 2013. Investors Portfolio Services LLC is a SEC
Registered Investment Advisor.
Types of Advisory Services
ASSET MANAGEMENT SERVICES
Advisor provides investment supervisory services on a discretionary and non-discretionary basis.
Investment supervisory services include the construction and on-going management of stock, bond, and
mutual fund portfolios. Portfolios are constructed in accordance with the client’s desired goals for
either growth or income or a combination. Portfolios are monitored on a security by security basis and
reported back to the client by means of quarterly consolidated statement of accounts. Individual
holdings are monitored on an ongoing basis and are either added or eliminated from the client’s
portfolio based on current research and consultation with the client. No publications are provided on a
fee or subscription basis for the purpose of providing financial advice.
Advisor meets with each client individually and institutes the appropriate Investment Policy Statement
model based on each client’s unique needs and objectives. The investment advisory services and
models offered to each client will vary in type and complexity, depending on a client’s individual
investment goals and circumstances. Clients are directly involved in this strategy and may request, in
writing, that their funds not be invested in certain types of investments.
Generally, services begin with the Advisor gathering information from an individual client regarding
financial circumstances, investment objectives and risk tolerance. This information assists the Advisor in
determining which services, models and investments are most appropriate to recommend or select on
each client’s behalf. It is important to provide accurate and complete responses to the questions asked
by the Advisor in gathering financial information, investment objectives and suitability, and that the
Advisor is promptly informed of any subsequent changes in information and/or Investment Policy
Statement model.
In certain situations, clients may request a restriction on the types of investments purchased on their
behalf, based on either general social categories or specific securities. However, doing so may impact
the performance of a client’s account and it may differ from accounts without the same restrictions.
Advisor participates in the Model marketplace of Altruist LLC, an SEC registered investment adviser and
affiliate of Altruist financial LLC. Advisor may subscribe client account to model portfolios available
through Altruist LLC’s Model Marketplace, including Altruist LLC-generated portfolios and Third-Party
Portfolios, for use by Advisor to assist it in managing or advising Advisor client accounts. Altruist LLC and
its affiliates do not act as investment advisers or fiduciaries to Advisor clients. Advisor is responsible for
suitability of all investment decisions and transactions for client accounts subscribed to Model
marketplace model portfolios.
When deemed appropriate for the Client, IPS may hire Sub-Advisors to manage all or a portion
of the assets in the Client account. IPS has full discretion to hire and fire Sub-Advisors as we
deem suitable. Sub-Advisors will maintain the models or investment strategies agreed upon
between Sub-Advisor and IPS. Sub-Advisors execute trades on behalf of IPS in Client accounts.
IPS will be responsible for the overall direct relationship with the Client. IPS retains the
authority to terminate the Sub-Advisor relationship at IPS’s discretion.
Discretionary
When the client provides Advisor discretionary authority the client will sign a limited trading
authorization or equivalent. Advisor will have the authority to execute transactions in the account
without seeking client approval on each transaction.
Non-Discretionary Service Limitations
For those clients that determine to engage the Advisor on a non-discretionary investment advisor basis,
an individual strategy is designed based on risk tolerance and current market decisions. However, the
client must be willing to accept that the Advisor cannot affect any account transaction without prior
written or verbal consent to any such transaction(s) from the client. Thus, in the event of a market
correction during which the client is unavailable, the Advisor will be unable to effect any account
transactions (as it would for its discretionary clients) without first obtaining the client’s verbal consent.
ERISA PLAN SERVICES
Advisor provides service to qualified retirement plans including 401(k) plans, 403(b) plans, pension and
profit-sharing plans, cash balance plans, and deferred compensation plans. Advisor may act as either a
3(21) or 3(38) advisor:
Limited Scope ERISA 3(21) Fiduciary
Advisor may serve as a limited scope ERISA 3(21) fiduciary that can advise, help and assist plan sponsors
with their investment decisions on a non-discretionary basis. As an investment advisor, the Advisor has a
fiduciary duty to act in the best interest of the Client. The plan sponsor is still ultimately responsible for
the decisions made in their plan, though using Advisor can help the plan sponsor delegate liability by
following a diligent process.
Fiduciary Services are:
Provide non-discretionary investment advice to the Client about asset classes and investment
alternatives available for the Plan in accordance with the Plan’s investment policies and objectives.
Client will make the final decision regarding the initial selection, retention, removal, and addition of
investment options. Advisor acknowledges that it is a fiduciary as defined in ERISA section 3 (21) (A) (ii).
Assist the Client in the development of an investment policy statement (“IPS”). The IPS establishes the
investment policies and objectives for the Plan. Client shall have the ultimate responsibility and
authority to establish such policies and objectives and to adopt and amend the IPS.
Provide non-discretionary investment advice to the Plan Sponsor with respect to the selection of a
qualified default investment alternative for participants who are automatically enrolled in the Plan or
who have otherwise failed to make investment elections. The Client retains the sole responsibility to
provide all notices to the Plan participants required under ERISA Section 404(c) (5) and 404(a)-5.
Assist in monitoring investment options by preparing periodic investment reports that document
investment performance, consistency of fund management and conformance to the guidelines set forth
in the IPS and make recommendations to maintain, remove or replace investment options.
Meet with Client on a periodic basis to discuss the reports and the investment recommendations.
Non-fiduciary Services are:
Assist in the education of Plan participants about general investment information and the investment
alternatives available to them under the Plan. Client understands Advisor’s assistance in education of
the Plan participants shall be consistent with and within the scope of the Department of Labor’s
definition of investment education (Department of Labor Interpretive Bulletin 96-1). As such, Advisor is
not providing fiduciary advice as defined by ERISA 3(21)(A)(ii) to the Plan participants. Advisor will not
provide
investment advice concerning the prudence of any investment option or combination of
investment options for a particular participant or beneficiary under the Plan.
Assist in the group enrollment meetings designed to increase retirement plan participation among the
employees and investment and financial understanding by the employees.
Advisor may provide these services or, alternatively, may arrange for the Plan’s other providers to offer
these services, as agreed upon between Advisor and Client. Advisor has no responsibility to provide
services related to the following types of assets (“Excluded Assets”):
• Employer securities;
• Real estate (except for real estate funds or publicly traded REITs);
• Stock brokerage accounts or mutual fund windows;
• Participant loans;
• Non-publicly traded partnership interests;
• Other non-publicly traded securities or property (other than collective trusts and similar
vehicles); or
• Other hard-to-value or illiquid securities or property.
Excluded Assets will not be included in calculation of Fees paid to Advisor on the ERISA Agreement.
Specific services will be outlined in detail to each plan in the 408(b)2 disclosure.
ERISA 3(38) Investment Manager.
Advisor can also act as an ERISA 3(38) Investment Manager in which it has discretionary management
and control of a given retirement plan’s assets. Advisor would then become solely responsible and liable
for the selection, monitoring and replacement of the plan’s investment options.
Fiduciary Services are:
• Advisor has discretionary authority and will make the final decision regarding the initial
selection, retention, removal and addition of investment options in accordance with the Plan’s
investment policies and objectives.
• Assist the Client with the selection of a broad range of investment options consistent with ERISA
Section 404(c) and the regulations thereunder.
• Assist the Client in the development of an investment policy statement (“IPS”). The IPS
establishes the investment policies and objectives for the Plan.
• Provide discretionary investment advice to the Plan Sponsor with respect to the selection of a
qualified default investment alternative for participants who are automatically enrolled in the
Plan or who have otherwise failed to make investment elections. The Client retains the sole
responsibility to provide all notices to the Plan participants required under ERISA Section 404(c)
(5).
Non-fiduciary Services are:
• Assist in the education of Plan participants about general investment information and the
investment alternatives available to them under the Plan. Client understands the Advisor’s
assistance in education of the Plan participants shall be consistent with and within the scope of
the Department of Labor’s definition of investment education (Department of Labor Interpretive
Bulletin 96-1). As such, the Advisor is not providing fiduciary advice as defined by ERISA to the
Plan participants. Advisor will not provide investment advice concerning the prudence of any
investment option or combination of investment options for a particular participant or
beneficiary under the Plan.
• Assist in the group enrollment meetings designed to increase retirement plan participation
among the employees and investment and financial understanding by the employees.
Advisor may provide these services or, alternatively, may arrange for the Plan’s other providers to offer
these services, as agreed upon between Advisor and Client.
Advisor has no responsibility to provide services related to the following types of assets (“Excluded
Assets”):
• Employer securities;
• Real estate (except for real estate funds or publicly traded REITs);
• Stock brokerage accounts or mutual fund windows;
• Participant loans;
• Non-publicly traded partnership interests;
• Other non-publicly traded securities or property (other than collective trusts and similar
vehicles); or
• Other hard-to-value or illiquid securities or property.
Excluded Assets will not be included in calculation of Fees paid to the Adviser on the ERISA Agreement.
Specific services will be outlined in detail to each plan in the 408(b)2 disclosure.
FINANCIAL PLANNING AND CONSULTING
The Advisor, in the course of work for individual clients, may provide financial planning services. For
clients seeking financial advice or investment education involving analysis of a particular investment or
financial situation, Advisor provides consultation services designed to meet the client's specific financial
objectives and needs. The consulting services generally take the form of preparing a financial plan, but
may also involve more general consulting. In addition, services may include focused planning
arrangements in areas such as retirement planning, estate planning, college planning, cash flow analysis,
or analysis with regard to investment of lump sum distributions from employer pension and profit
sharing plans. To the extent requested by the client, the Advisor may provide consulting services
regarding non-investment related matters, such as estate planning, tax planning, insurance, etc. Neither
the Advisor, nor any of its representatives, serves as an attorney or an accountant.
Advisor’s planning and consulting fees are negotiable but generally range from $1500 to $$5,000 on a
fixed fee basis and from $200 to $500 on an hourly rate basis, depending on the level and scope of the
service(s) required and the professional(s) rendering the service(s). Prior to engaging the Advisor to
provide planning or consulting services, clients are required to enter into a Consulting Services
Agreement with the Advisor setting forth the terms and conditions of the engagement. If requested by
the client, the Advisor may recommend the services of other professionals for implementation
purposes, including the Advisor’s representatives in their individual capacities as licensed insurance
agents. The client is under no obligation to engage the services of any such recommended professional.
The client retains absolute discretion over all such implementation decisions and is free to accept or
reject any recommendation from the Advisor.
If the client engages any such recommended professional, and a dispute arises thereafter relative to
such engagement, the client agrees to seek recourse exclusively from and against the engaged
professional.
It remains the client’s responsibility to promptly notify the Advisor if there is ever any change in
his/her/its financial situation or investment objectives for the purpose of reviewing/evaluating/revising
the Advisor’s previous recommendations and/or services.
SEMINARS, CLASSES AND WORKSHOPS
The advisor teaches classes, seminars and workshops several times a year. These classes normally focus
on retirement planning, tax consultation, social security benefits and financial planning.
TAX PREPARATION SERVICES
The advisor may prepare federal and state income taxes for clients. Tax preparation requires the
understanding of and implementation of the tax code and familiarity with the forms and requirements
of filing. Advisor uses a professional quality tax program, Ultra Tax Software, for the reporting and
electronic filing of client’s taxes with the Internal Revenue Service. Ultra Tax also calculates all carryover
balances and depreciation from one year to the next. It is continually being updated to the most current
tax laws, sometimes on a daily basis during the tax season. There are no material conflicts of interest in
the preparation of taxes and the advisory business of Investors Portfolio Services LLC.
Client Tailored Services and Client Imposed Restrictions
The goals and objectives for each Client are documented in our Client files. Investment strategies are
created that reflect the stated goals and objectives. Clients may impose restrictions on investing in
certain securities or types of securities. Agreements may not be assigned without written Client consent.
Wrap Fee Programs
Advisor does not sponsor any wrap fee programs.
Client Assets Under Management
Advisor has the following assets under management:
Discretionary Amounts: Non-discretionary Amounts: Date Calculated:
$183,479,578 $2,445,019 December 31, 2023