A. Richard Brothers, Financial Advisors is a corporation formed on September 30, 1996 in
the State of Maine. Richard Brothers, Financial Advisors became licensed as an Investment
Adviser Firm in 2002. Richard Brothers, Financial Advisors’ full legal name is Allegiance
Financial Group, Inc. However, Richard Brothers, Financial Advisors’ primary business
name is Richard Brothers, Financial Advisors. Richard Brothers, Financial Advisors is
owned by Neal Patrick Richard and Randall Jon Richard. Randall Jon Richard is Richard
Brothers, Financial Advisors’ President and Chief Compliance Officer. Allegiance Capital,
L.L.C., d/b/a Richard Brothers Securities (broker dealer and FINRA Member) is an
affiliated broker dealer.
B. As discussed below, Richard Brothers, Financial Advisors offers to its clients (individuals,
business entities, trusts, estates and charitable organizations, etc.) investment advisory
services, and, to the extent specifically requested by a client, financial planning and related
consulting services.
DISCRETIONARY AND NON-DISCRETIONARY ADVISORY PROGRAM
Richard Brothers, Financial Advisors provides discretionary and non-discretionary
investment advisory and investment management services (its “Advisory Program” or the
“Program”).
Discretionary clients stand to receive Whole Picture Planning, which is Richard Brothers,
Financial Advisors’ approach to financial planning. Clients may take advantage of financial
planning that address one or more of the following five topics: (1) retirement security, (2)
business transition, (3) estate protection, (4) education funding, and (5) income sources.
Pershing LLC (“Pershing”) serves as the custodian for client accounts in the Program.
Richard Brothers, Financial Advisors provides investment advisory services specific to the
needs of each client. Before providing investment advisory services, an investment adviser
representative will ascertain each client’s investment objectives. Thereafter, Richard
Brothers, Financial Advisors will allocate and/or recommend that the client allocate
investment assets consistent with their designated investment objectives. Richard Brothers,
Financial Advisors primarily recommends various open and closed end registered
investment companies in accordance with the client’s designated investment objectives.
Once allocated, Richard Brothers, Financial Advisors provides ongoing monitoring and
review of account performance, asset allocation and client investment objectives.
LIMITED NON-DISCRETIONARY PROGRAM
Richard Brothers, Financial Advisors provides limited non-discretionary advisory services
only upon specific request of certain clients. These limited non-discretionary services are
provided only to clients at their specific request who are not charged the standard advisory
fee and who receive limited services for the fee charged. The services include a quarterly
call with the client to determine if there are any financial needs or issues, followed by an
annual meeting to thoroughly review and implement the client’s investment objectives(s)
and financial plan. Richard Brothers, Financial Advisors will coordinate with the client’s
accountant regarding tax information, if necessary. Richard Brothers, Financial Advisors
does not regularly review or manage the client’s assets, nor does it provide ongoing
financial planning or trading of these assets. Richard Brothers, Financial Advisors
facilitates trades only upon the specific request of the client. Prior to engaging Richard
Brothers, Financial Advisors to provide investment advisory services, clients are required
to enter into an agreement with Richard Brothers, Financial Advisors setting forth the terms
and conditions of the engagement (including termination), describing the scope of the
services to be provided, and the fee that is due from the client.
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
To the extent requested by a client, Richard Brothers, Financial Advisors may determine
to provide financial planning and/or consulting services (including investment and non-
investment related matters, including estate planning, insurance planning, etc.) on a stand-
alone or separate basis. Prior to engaging Richard Brothers, Financial Advisors to provide
planning or consulting services, clients are generally required to enter into a Financial
Planning Agreement with Richard Brothers, Financial Advisors setting forth the scope of
the services to be provided. If requested by the client, Richard Brothers, Financial Advisors
may recommend the services of other professionals for implementation purposes, including
Richard Brothers, Financial Advisors’ representatives in their individual capacities as
registered representatives of Richard Brothers Securities or as licensed insurance agents.
(See disclosure at Item 10 C). The client is under no obligation to engage the services of
any recommended professional. The client retains absolute discretion over all
implementation decisions and is free to accept or reject any recommendation from Richard
Brothers, Financial Advisors. If the client engages any recommended professional, and a
dispute arises, the client agrees to seek recourse exclusively from the engaged professional.
Each client is responsible to notify promptly Richard Brothers, Financial Advisors if there
is ever any change in their financial situation or investment objectives so that Richard
Brothers, Financial Advisors can review, and if necessary, revise its previous advice.
Financial planning can be added to the Program fee for a flat fee, paid quarterly. Richard
Brothers, Financial Advisors has the sole discretion to determine if it has or will be
expected to provide too much financial planning under the Program agreement and will
then require the client enter into a separate financial planning agreement.
RETIREMENT CONSULTING
Richard Brothers, Financial Advisors also provides non-discretionary pension consulting
services, pursuant to which it assists sponsors of self-directed retirement plans with the
selection and/or monitoring of investment alternatives (generally open-end mutual funds)
from which plan participants shall choose in self-directing the investments for their
individual plan retirement accounts. In addition, to the extent requested by the plan
sponsor, Richard Brothers, Financial Advisors shall also provide participant education
designed to assist participants in identifying the appropriate investment strategy for their
retirement plan accounts. The terms and conditions of the engagement shall generally be
set forth in a Retirement Plan Consulting Agreement between Richard Brothers, Financial
Advisors, and the plan sponsor.
VARIABLE ANNUITY ADVISORY PROGRAM
The client can also engage Richard Brothers, Financial Advisors to provide discretionary
investment advisory services through its Variable Annuity Advisory Program (the “VA
Program”). Under the VA Program, Richard Brothers, Financial Advisors allocates client
investment assets on a discretionary basis among the investment sub accounts of variable
annuity products previously purchased by the client. Richard Brothers, Financial Advisors
generally proposes allocations to individual equity and fixed income investments,
exchange traded funds, and mutual funds, consistent with the client’s designated
investment objectives. Once allocated, Richard Brothers, Financial Advisors provides
ongoing monitoring and review of sub-account performance, asset allocation, and client
investment objectives. The variable annuity issuer may provide limitations on the
frequency or manner in which Richard Brothers, Financial Advisors employees may trade
in the account, and its advice and trading may be more limited than in the Program.
Richard Brothers, Financial Advisors charges advisory fees on products that are placed
through Richard Brothers Securities. Such fees are charged directly to the client and are
not debited from the annuity product purchased. Such fees will result in an increase in
Richard Brothers, Financial Advisors revenues and a may result in a decrease in the market
value of the client’s asset regardless of account performance. Prior to any purchase, all
annuities are reviewed for suitability for the specific client by Richard Brothers Securities.
No client is under any obligation to purchase a variable annuity from Richard Brothers
Securities.
MISCELLANEOUS
Limitations of Financial Planning and Non-Investment Consulting/Implementation
Services. As indicated above, to the extent requested by the client, Richard Brothers,
Financial Advisors may provide financial planning and related consulting services
regarding non-investment related matters, such as estate planning, tax planning, insurance
planning. This may be through Whole Picture Planning or through one of our other
services. Richard Brothers, Financial Advisors
does not provide legal or tax advice, and
no portion of its services should be construed as legal or accounting services. Accordingly,
Richard Brothers, Financial Advisors does not prepare estate planning documents or tax
returns. To the extent requested by a client, Richard Brothers, Financial Advisors may
recommend the services of other professionals for certain non-investment implementation
purposes (i.e. attorneys, accountants, insurance agents), including representatives of
Richard Brothers, Financial Advisors in their separate individual capacities as
representatives of Richard Brothers Securities, an SEC registered and FINRA member
broker-dealer. The client is under no obligation to engage the services of any recommended
professional. The client retains absolute discretion over all implementation decisions and
is free to accept or reject any recommendation from Richard Brothers, Financial Advisors
or its representatives. The recommendation by Richard Brothers, Financial Advisors’
representative that a client purchase a securities or insurance commission product through
a Richard Brothers, Financial Advisors’ representative as a registered representative of
Richard Brothers Securities, presents a conflict of interest, as the receipt of commissions
provides an incentive to recommend investment products based on the commissions to be
received, rather than on a particular client’s need. No client is under any obligation to
purchase any securities or insurance commission products through Richard Brothers
Securities or through a representative of Richard Brothers, Financial Advisors. Clients are
reminded that they may purchase securities and insurance products recommended by
Richard Brothers, Financial Advisors through other, non-affiliated broker-dealers. Richard
Brothers, Financial Advisors’ Chief Compliance Officer, Randall J. Richard, remains
available to address any questions that a client or prospective client may have regarding
the above conflict of interest.
Retirement Rollovers. A client or prospective client leaving an employer typically has
four options regarding an existing retirement plan (and may engage in a combination of
these options): (i) leave the money in the former employer’s plan, if permitted, (ii) roll over
the assets to the new employer’s plan, if one is available and rollovers are permitted, (iii)
roll over to an Individual Retirement Account (“IRA”), or (iv) cash out the account value
(which could, depending upon the client’s age, result in adverse tax consequences). If
Richard Brothers, Financial Advisors recommends that a client roll over their retirement
plan assets into an account to be managed by Richard Brothers, Financial Advisors, such a
recommendation creates a conflict of interest if Richard Brothers, Financial Advisors will
earn an advisory fee on the rolled over assets. No client is under any obligation to roll over
retirement plan assets to an account managed by Richard Brothers, Financial Advisors.
Richard Brothers, Financial Advisors’ Chief Compliance Officer, Randall J. Richard,
remains available to address any questions that a client or prospective client may have
regarding the conflict of interest presented by rollover recommendations.
Non-Discretionary Service Limitations. Clients that determine to engage Richard
Brothers, Financial Advisors on a non-discretionary investment advisory basis must be
willing to accept that Richard Brothers, Financial Advisors cannot effect any account
transactions without obtaining prior consent to such transaction(s) from the client. Thus, in
the event that Richard Brothers, Financial Advisors would like to make a transaction for a
client’s account (including in the event of an individual holding or general market
correction), and the client is unavailable, Richard Brothers, Financial Advisors will be
unable to effect the account transaction(s) (as it would for its discretionary clients) without
first obtaining the client’s consent.
Independent Managers. Richard Brothers, Financial Advisors may select one or more
independent investment managers or recommend to a client to invest using an independent
investment manager in accordance with the client’s designated investment objectives (each
an “Independent Manager”). In these situations, the Independent Manager will have the
day-to-day responsibility for the discretionary management of the assets allocated to it.
Richard Brothers, Financial Advisors will continue to monitor and review the client’s
account performance, asset allocation and investment objectives. Factors which Richard
Brothers, Financial Advisors considers in recommending an Independent Manager include
the client’s designated investment objective(s), and the Independent Manager’s
management style, performance, reputation, financial strength, reporting capabilities,
pricing structure, and published research. The investment management fee charged by the
Independent Manager is in addition to, Richard Brothers, Financial Advisors’ advisory fee
outlined in Item 5. This may result in a fee that is greater than the fees imposed by other
investment advisors.
Unaffiliated Private Investment Funds. Richard Brothers, Financial Advisors may
provide investment advice regarding unaffiliated private investment funds. Richard
Brothers, Financial Advisors, on a non-discretionary basis, may also recommend that
certain qualified clients consider an investment in unaffiliated private investment funds.
Richard Brothers, Financial Advisors’ role is limited to the initial and ongoing due
diligence of the investment. If a client determines to become a private fund investor, the
amount of assets invested in the fund will be included as part of “assets under management”
for purposes of Richard Brothers, Financial Advisors calculating its investment advisory
fee. Richard Brothers, Financial Advisors’ clients are under absolutely no obligation to
consider or make an investment in a private investment fund.
Private investment funds generally involve various risk factors, including, but not limited
to, potential for complete loss of principal, liquidity constraints and lack of transparency, a
complete discussion of which is set forth in each fund’s offering documents, which will be
provided to each client for review and consideration. Unlike liquid investments that a client
may own, private investment funds do not provide daily liquidity or pricing. Each
prospective client investor will be required to complete a Subscription Agreement, pursuant
to which the client shall provide Richard Brothers, Financial Advisors sufficient
information to establish that he/she is qualified for investment in the fund, and
acknowledges and accepts the various risk factors that are associated with such an
investment.
In the event that Richard Brothers, Financial Advisors references private investment funds
owned by the client on any supplemental account reports prepared by Richard Brothers,
Financial Advisors, the value for all private investment funds owned by the client will
reflect the most recent valuation provided by the fund sponsor, which in certain
circumstances can be the initial purchase price. The client’s advisory fee will be based on
the valuation provided by the fund sponsor.
Trade Error Policy. Richard Brothers, Financial Advisors shall reimburse accounts for
losses resulting from Richard Brothers, Financial Advisors’ trade errors, and shall credit
accounts for such errors resulting in market gains. The gains and losses are first reconciled
within Richard Brothers, Financial Advisors’ custodian firm account.
Client Obligations. Richard Brothers, Financial Advisors will not be required to verify
any information received from the client or from the client’s other professionals and is
expressly authorized to rely on the information in its possession. Clients are responsible
for promptly notifying Richard Brothers, Financial Advisors if there is ever any change in
their financial situation or investment objectives so that Richard Brothers, Financial
Advisors can review, and if necessary, revise its previous recommendations or services.
C. Richard Brothers, Financial Advisors shall provide investment advisory services specific
to the needs of each client. Prior to providing investment advisory services, an investment
adviser representative will determine each client’s investment objectives. Thereafter,
Richard Brothers, Financial Advisors will invest or recommend that the client invest their
account consistent with their investment objectives. The client may, at any time, impose
reasonable restrictions, in writing, on Richard Brothers, Financial Advisors’ services.
D. Richard Brothers, Financial Advisors does not participate in a wrap fee program.
E. As of March 14, 2024, Richard Brothers, Financial Advisors had $130,579,701 in assets
under management, of which $126,273,662 was managed on a discretionary basis and
$3,887,471 on a non-discretionary basis.