Services
Partnership Wealth Management, Inc. (“PWM” or “Advisor”) was formed as a Limited
Liability Company as of September 2, 2005. From that date until November 28, 2016, PWM
provided advisory services through an unaffiliated broker dealer and registered investment advisor
firm, with the compliance oversight of both entities. As of the date of this Brochure, PWM is
registered as an independent registered investment advisor firm. The principal owner and President
of the firm is Ellwood J. Derricks. The Advisor offers investment supervisory services to its clients.
Advisory Services
PWM’s principal service is providing fee-based investment advisory services. The Advisor
practices custom management of portfolios, on a discretionary basis, according to the client’s
objectives. The Advisor’s primary approach is to use a tactical allocation strategy aimed at
reducing risk and increasing performance. The Advisor may use any of the following: exchange
listed securities, over-the- counter securities, foreign securities, warrants, corporate debt securities,
commercial paper, CDs, variable life insurance, variable annuities, municipal securities, mutual
funds, United States government securities, options in securities and interests in partnership
investing in real estate, oil and gas interests and business development companies to accomplish
this objective. The Advisor measures and selects mutual funds by using various criteria, such as
the fund manager’s tenure, and/or overall career performance. The Advisor may recommend, on
occasion, redistributing investment allocations to diversify the portfolio in an effort to reduce risk
and increase performance. The Advisor may recommend specific stocks to increase sector
weighting and/or dividend potential. The Advisor may recommend employing cash positions as a
possible hedge against market movement which may adversely affect the portfolio. The Advisor
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, change in risk tolerance of client,
or any risk deemed unacceptable for the client’s risk tolerance.
PWM will provide investment advisory services and portfolio management services and
will not provide securities custodial or other administrative services. At no time will PWM accept
or maintain custody of a client’s funds or securities, except for authorize fee deduction from the
client’s account.
PWM does provide non-wrap fee portfolio management services. For more information on
this service, clients may request a copy of PWM’s Disclosure Brochure.
Fees and Charges
PWM charges a management fee for the client account that covers the provision of initial
and ongoing investment services and the execution of securities transactions. This method of
treating transaction fees is typically characterized as a “wrap fee”, where the management fee
includes the investment advisory services as well as all the securities transactions costs and the
client pays only that Management Fee and no other costs concerning the trading. Clients in wrap
fee accounts, with the security transaction costs included, will pay a higher management fee than
those clients of PWM that are not managed with a wrap fee (see PWM Form ADV Part 2A
Brochure). The management fee does not cover custodial fees for the account that will be
established with a custodian to hold the assets in your account, nor does the fee cover mark-ups
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or markdowns charged on transactions in over-the-counter securities effected for your account.
The management fee also does not cover costs for any securities transactions you request involving
assets or securities not in a program account. Information about custodial fees and charges for
over-the-counter transactions will be discussed and pre-approved by the client.
PWM’s management fee, is payable quarterly in advance, based on the value of the
portfolio as of the last day of the previous quarter. The management fee schedule is as follows:
Assets Under Management Annual Fee
$0-$1,000,000 1.50%
$1,000,001-$2 Million 1.25%
$2,000,001-$3 Million 1.00%
$3,000,001 - $5 Million 0.80%
$5,000,001 - $10 Million 0.60%
$10,000,001 Million and Above 0.50%
This fee may be negotiated at PWM’s sole discretion. Discounts and fee waivers, not
generally available to our advisory clients, may be offered to family members and associated
persons of our firm. The fees stated above are for PWM only. As the Portfolio Manager of the
client’s account, PWM retains the entire management fee. PWM does not use any outside
investment managers to provide services to its wrap fee clients.
The management fee may be more or less costly to you than paying for the services
separately, depending upon the investment advisory fees charged, the type of account, the amount
of assets in the account, time and services provided, the number of transactions for the account,
the level of brokerage and other fees that would be payable if you obtained the services available
under the program individually.
Asset management fees may be automatically deducted from the client account on a
quarterly basis by the qualified custodian. The client will give written authorization permitting the
firm to be paid directly from their account held by the custodian. The client may also opt to have
the fees directly billed. The custodian will send a quarterly statement to the client and PWM will
also send a quarterly invoice to the client, as well as the custodian, outlining the fee calculation
and the amount withdrawn from the client account. The fee calculation will include the amount of
the fee, the value of the client’s assets upon which the fee was based, and the specific manner in
which the fee was calculated. Clients need to be aware that it is their responsibility to verify the
accuracy of the fee calculation and that the custodian will not determine whether the fee is properly
calculated.
The program bundles together several service providers – PWM as the investment adviser,
a broker/ dealer, a clearing firm and a custodian - and offers most of these services for a single
advisory fee. Some clients like having the various services “packaged” together; others prefer to
select their own providers for the various services needed to manage their investment portfolios.
Similarly, some clients like a fee structure that converts trading costs into an asset- based fee
calculated on the same basis as advisory fees; others prefer trading costs to be assessed on a per
trade basis. Depending on a number of factors, such as the number, size and nature of the
securities transaction in an advisory account, the overall fees and charges borne by the client over
time could be more or less than what these fees and charges would be if the same services were
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provided on a separate basis.
Other Charges
Your investments in a program account may also be subject to other fees and charges
imposed by other third parties, such as: in the case of mutual fund investments, mutual fund
investment management fees, 12b-l fees, administrative servicing fees, short term redemption fees,
and contingent deferred sales charges upon redemption of previously purchased mutual funds; in
the case of purchases made in connection with an individual retirement account or other qualified
plan, various IRA and qualified retirement plan fees including annual custodial fees; and, in the
case of all investments, clearing, custody and other transaction charges and service fees. Other
parties may receive a portion of these third-party fees.
A client could invest in these products directly, without the services of PWM. Therefore,
clients could generally avoid the second layer of fees by not using the advisory services of PWM
and by making their own decisions regarding the investment. In that case, the client would not
receive the services provided by PWM which are designed, among other things, to assist the client
in determining which products or services are most appropriate to each client’s financial condition
and objectives. Accordingly, the client should review both the fees charged by the product sponsor
and the fees charged by PWM to fully understand the total fees to be paid.
Investment advisor representative(s) of PWM are not compensated differently for clients
that choose the inclusive fee arrangement versus the non-inclusive fee and therefore they do not
have a financial incentive to recommend one method over the other.