4.A Description of Investment Adviser
Executive Financial Services, Inc., doing business as “CND Financial” (or “Adviser”), is a fee-only
Registered Investment Adviser. The Adviser was established on April 10, 2000, and is headquartered in
Livonia, Michigan. CND Financial is registered with and regulated by the United States Securities and
Exchange Commission (“SEC”). CND Financial is not publicly owned or traded. Arthur R. Cole, CPA/PFS
is the President, Chief Compliance Officer and 50% equity owner. William Mack, CFP®, CFS® is the Vice
President and 40% equity owner. Theodore Karl Bugenski, CFP®, CFS® is the Secretary and 10% equity
owner. There are no indirect owners of the Adviser or intermediaries which have any ownership interest in
the firm.
The term “fee-only” means CND Financial and its Adviser Representatives are compensated for services
via advisory fees paid by clients. CND Financial and its Adviser Representatives do not accept brokerage
or insurance commissions. Adviser Representatives are not otherwise engaged as registered representatives
of a broker/dealer nor are they insurance agents.
“Adviser Representatives” are those persons registered and authorized by CND Financial to provide
financial and investment advisory services on behalf of CND Financial.
CND Financial is not a broker/dealer or custodian. Client assets are managed on an individualized basis.
CND Financial does not sponsor or manage any wrap programs. CND Financial is a fiduciary to each of its
clients.
4.B Types of Services
Investment Management and Financial Planning / Consultation Services
CND Financial offers advisory services to individual investors, retirement plans, trusts, estates, charitable
organizations, corporations, and other businesses.
CND Financial offers a complimentary general consultation to discuss financial and investment advisory
services available; to give a prospective client an opportunity to review services desired; and to determine
the possibility of a potential Client-Adviser relationship. CND Financial and its Adviser Representatives
may recommend the services of CND Financial. Prospective clients are never obligated to engage services
after the complimentary consultation. CND Financial’s services begin only after the client and Adviser
formalize the relationship with a properly executed client Investment Management Agreement.
After the formal engagement and depending upon the scope of the engagement, the Adviser and client will
share in a data gathering and discovery process in an effort to determine the client’s needs, goals, intentions,
time horizons, risk tolerance and investment objectives, based upon information provided by the client and
the nature of services requested. The client and Adviser may complete a risk assessment, investment policy
statement or similar document, depending upon the nature of services to be provided.
4.B(1) Investment Management Services
Investment Management Services involve ongoing and continuous portfolio management services. CND
Financial focuses on providing individualized services that are tailored to meet the stated needs and
objectives of the client. Investment Management Services are tailored for portfolios with a minimum of
$250,000, however CND Financial can evaluate each potential client relationship on a case-by-case basis.
In the delivery of initial and ongoing services, the Adviser will normally include a comprehensive review
of the overall aspects of a client’s current financial situation and consider both long and short-term stated
objectives and goals, or as directed by the client. After an analysis and data-gathering process and
depending upon the nature of services desired, the Adviser will engage in the following:
• Existing portfolio review and analysis
• Preparation of asset allocation recommendations
• Preparation of a customized investment policy / strategy with the client’s participation
• Recommendation of specific investments
• Implementation of the investment plan
• Ongoing management of the client’s investment portfolio
Investment Management clients should play an active role in the formation of the investment plan and the
development of investment advice and recommendations. CND Financial will invest client assets taking
into consideration the overall management style and portfolio strategy selected by the client. The strategies
will range from conservative to moderately aggressive in nature, and include actively managed funds and
index mutual funds, exchange traded funds and fixed income investments.
CND Financial will normally utilize proprietary investment strategies as described in Item 8 of this
Brochure. CND Financial attempts to construct a diversified portfolio of investment recommendations that
are within its realm of expertise. For a more detailed description of the adviser’s investment strategies and
how they are implemented refer to Item 8, “Methods of Analysis, Investment Strategies and Risk of Loss.
In each case, the stated individual needs, goals and desires of clients are taken into consideration.
CND Financial will maintain limited discretionary authority over the client’s managed portfolio as
authorized in the client Investment Management Agreement. The client may impose reasonable restrictions
on investing in certain types of securities by telling us verbally or in writing. Where clients retain CND
Financial on a non-discretionary basis, the client is welcome to implement recommendations in whole or
in part via the financial services provider(s) of their choice. CND Financial may assist in the implementation
of these recommendations with client’s authorization.
As financial planners, CND Financial is available to assist Investment Management Clients with topics
normally associated with Financial Planning. These additional services are client-initiated, value-added
services and described in more detail in Item 4.B(2) of this Brochure. Services and investment
recommendations in connection with assets invested in employer retirement plans are limited to options
available within the plan and via the plan’s contracted service providers.
CND Financial’s Investment Management Services include ongoing investment advice, investment
tracking, performance monitoring and if requested, financial planning services. In providing ongoing
investment management services, CND Financial will manage the client’s funds in accordance with the
investment policy/strategy as selected by the client. The portfolio assets will be reviewed internally on a
frequent basis (generally quarterly or more often), depending upon the types of investments, market
conditions, at the discretion of the Adviser, or as may be specifically requested by the client via written
direction.
Communication between the Client and Adviser is important. Clients may call the office during regular
business hours to discuss their portfolio and make inquiries. In addition, CND Financial recommends that
clients initiate a meeting with the Adviser no less than annually and review their investment strategies.
However, clients must immediately inform the Adviser of any changes in their financial situation to provide
CND Financial with the opportunity to review the portfolio to ensure it is still structured to help meet the
client’s stated needs and objectives.
4.B(2) Financial Planning – Consultations (Hourly Services)
CND Financial offers hourly Financial Planning and Consultation Services for non-investment
management clients. Financial Planning services may be comprehensive in nature (involving the
development of a written plan or a review of an existing plan for potential updates) or services can be
limited to consultations to address
only certain components of financial planning as the client directs.
Topics could include but are not limited to: Retirement planning, tax strategies, college funding, expense
reduction and 401(k) account reviews.
Financial Planning Services generally involve the use of long-term strategies. Where CND Financial
provides portfolio review services or advice, the information and recommendations are based on then-
current information as provided by the client. Recommendations may include annual reviews to ensure the
plan developed continues to align with the Client’s stated goals and objectives. Clients are welcome, but
are never obligated, to retain the Adviser for additional or follow-up services via a new or amended client
agreement.
Where CND Financial’s services focus only on certain aspects of client interests and needs or are otherwise
limited in scope or time, clients must understand that a client’s overall financial and investment needs,
liabilities and objectives may not be considered because of time and/or service restraints placed on the
Adviser’s services or due to limited information provided to CND Financial. CND Financial may agree to
include these other assets in the documentation prepared for the client (if provided) as a value-added service
only. Depending on the level of service(s) requested, CND Financial may prepare a written financial plan,
reports, or post-meeting communication(s) at the discretion of the Adviser.
When providing advice on investments within retirement plans, the advice and any recommendations are
limited to plan offerings.
Clients requiring assistance on issues relating to matters outside of financial and investment advisory topics
should consult their personal tax adviser, legal counsel, or other professionals for expert opinions.
Hourly Financial Planning Services will not include portfolio monitoring, investment reviews, investment
management and implementation of advice and/or recommendations pertaining to securities or non-
securities matters. In these cases, the client is welcome to implement advice/recommendations in whole or
in part, entirely at the client’s discretion via the service provider(s) of the client’s choice.
Financial planning services are hourly based and are not ongoing services. The services to be provided and
the Adviser’s fee(s) are agreed upon at the time of engagement. If the client wishes to initiate any follow-
up or review services, these services will be provided under a new hourly client agreement. CND Financial
will not provide additional services that will result in additional fees without the client’s prior approval and
a new or amended client agreement.
Note: These same services are otherwise included in the Adviser’s Investment Management Services
Agreement for investment clients (at no additional cost) and initiated at the request of the client.
4. C Client Tailored Services and Client Imposed Restrictions
CND Financial focuses on providing individualized services and can tailor services to focus only on certain
portfolio components and certain components of financial planning. In providing consultation services,
clients determine their topics of interest and the scope of services desired. Services are agreed to at the time
of engagement. However, where client services or information provided to the Adviser are limited, clients
must understand that comprehensive financial and/or investment needs and objectives may not be fully
considered due to the client’s option to receive limited services, the lack of information received, and/or
client disclosure.
Clients may impose reasonable restrictions on investing in certain securities or types of securities, as agreed
to by the Adviser. Clients are welcome to set parameters on the Adviser’s limited discretionary authority
in writing as to types of investments and amounts purchased or sold.
Where clients retain authority to implement recommendations, they are welcome to do so in whole or in
part via the financial services provider(s) of their choice.
Retirement Plan / IRA Rollovers: CND Financial is a fiduciary to each of its clients and fiduciary duties
apply to investment advice in connection with the client’s retirement plan account or individual retirement
account 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. CND Financial charges asset-
based fees for managed accounts and this creates some conflicts with client interests, Therefore, CND
Financial must operate under a special rule that requires the Adviser to act in the client’s best interest and
not put the firm’s interests ahead of the client. At the time of a rollover recommendation, CND Financial
will provide the client with a written disclosure discussing the reasons the rollover is in the client’s best
interests. Also, under this special rule’s provisions, CND Financial must:
• Meet the Prudent Expert standard of care when making investment recommendations
• Abide by a duty of loyalty by never putting the Adviser’s financial interests ahead of the client’s
interests when making recommendations
• Provide basic information about conflicts of interests and fees while avoiding misleading
statements about these topics and investments
• Follow policies and procedures designed to ensure that CND Financial gives advice that is in the
client’s best interest
• Charge no more than is reasonable for services
Certain clients may engage in self-directed transactions. As mutual fund specialists, we generally do not
recommend investing in individual stocks, preferring instead the broad diversification offered by stock
mutual funds. That being said, we will accommodate clients if they would like to self-direct us to buy and
sell stocks for their account(s) as a courtesy. If this is the case, the client will authorize in writing, via our
client Investment Management Agreement, acknowledging that they assume sole responsibility for the
performance and buy/sell decisions related to these individual stocks. As such, CND Financial bears no
liability or responsibility with respect to these individual stocks, and therefore does not assess advisory fees
on such stocks. Stocks that are self-managed by the client do not receive a suitability review by CND
Financial. These stocks will be identified as “exempt assets” with respect to billing/fees.
If instead, you request that we accept individual stocks into your account(s) and would like CND Financial
to manage those positions, normal CND Financial fees will apply. This request would need to be authorized
in writing via our client Investment Management Agreement. CND Financial will monitor client stock
positions. Decision making is limited to a “hold” recommendation, or a “sell and reinvest in mutual funds”
recommendation. CND Financial utilizes a mathematical model combining the opinions and ratings of
companies such as Standards & Poor, Morningstar and Charles Schwab & Co. If the stock’s combined
rating becomes downgraded, CND Financial would implement its “sell and reinvest in mutual funds”
recommendation.
In granting CND Financial limited discretionary authority, CND Financial will take action on these
holdings in accordance with client’s designed investment objectives and strategies. As with any investments
we manage, there is no guarantee that CND Financial’s investment decisions will be profitable.
4.D Wrap Fee Programs
CND Financial does not recommend wrap fee programs nor does the Adviser sponsor or act as a manager
of a wrap fee program.
4. E ASSETS UNDER MANAGEMENT
CND Financial’s assets under management as of the close of business on December 31, 2023 totaled
$154,400,000 for 190 clients.