Our firm manages assets for many different types of clients to help meet their financial goals while
remaining sensitive to risk tolerance and time horizons. As a fiduciary, it is our duty to always act in
the client’s best interest. This is accomplished in part by knowing the client. Our firm has established
a service-oriented advisory practice with open lines of communication. Working with clients to
understand their investment objectives while educating them about our process, facilitates the kind
of working relationship we value.
Our firm sponsors and offers a wrap fee program, which allows clients to pay a single fee for
investment advisory services and associated custodial transaction costs. Transaction fees will be paid
by our firm via individual transaction charges. Because our firm absorbs client transaction fees, an
incentive exists to limit trading activities in client accounts.
Our recommended custodian, Raymond James, does not charge transaction fees for U.S. listed
equities and exchange traded funds. Since we pay the transaction fees charged by the custodian to
clients participating in our wrap fee program, this presents a conflict of interest because we are
incentivized to recommend equities and exchange traded funds over other types of securities in order
to reduce our costs.
Our Wrap Advisory Services
Wrap Comprehensive Portfolio Management:
As part of our Wrap Comprehensive Portfolio Management service clients will be provided asset
management and financial planning or consulting services. This service is designed to assist clients
in meeting their financial goals through the use of a financial plan or consultation. Our firm conducts
client meetings to understand their current financial situation, existing resources, financial goals, and
tolerance for risk. Based on what is learned, an investment approach is presented to the client,
consisting of individual stocks, bonds, ETFs, options, mutual funds and other public and private
securities or investments. Once the appropriate portfolio has been determined, portfolios are
continuously and regularly monitored, and if necessary, rebalanced based upon the client’s individual
needs, stated goals and objectives. Upon client request, our firm provides a summary of observations
and recommendations for the planning or consulting aspects of this service.
The maximum
annual fee charged for this service will not exceed 1.50%. Fees to be assessed will be
outlined in the advisory agreement to be signed by the Client. Annualized fees are billed on a pro-
rata basis monthly in advance based the last day of the previous month. Our firm bills on cash unless
indicated otherwise in writing. Fees are negotiable and will be deducted from client account(s).
Adjustments will be made for deposits and withdrawals during the quarter. Our firm does not offer
direct invoicing. As part of this process, Clients understand the following:
a) The client’s independent custodian sends statements at least quarterly showing the
market values for each security included in the Assets and all account disbursements,
including the amount of the advisory fees paid to our firm;
b) Clients will provide authorization permitting our firm to be directly paid by these terms.
Our firm will send an invoice directly to the custodian; and
ADV Part 2A, Appendix 1 – Wrap Fee Brochure Page 5 Callahan Wealth Advisory, LLC
c) If our firm sends a copy of our invoice to the client, legend urging the comparison of
information provided in our statement with those from the qualified custodian will be
included.
Other Types of Fees & Expenses:
In addition to our advisory fees above, clients may also pay holdings charges imposed by the chosen
custodian for certain investments, charges imposed directly by a mutual fund, index fund, or
exchange traded fund, which shall be disclosed in the fund’s prospectus (e.g.., fund management fees
and other fund expenses), distribution fees, surrender charges, variable annuity fees, IRA and
qualified retirement plan fees, mark-ups and mark-downs, spreads paid to market makers, fees for
trades executed away from custodian, wire transfer fees and other fees and taxes on brokerage
accounts and securities transactions. Our firm does not receive a portion of these fees.
Termination and Refunds:
Either party may terminate the advisory agreement signed with our firm for Comprehensive
Portfolio Management services in writing at any time. Upon notice of termination our firm will
process a pro-rata refund of the unearned portion of the advisory fees charged in advance.
Wrap Fee Program Recommendations:
Our firm may recommend or offer the wrap program services of other providers.