A. Description of the Advisory Firm
Sherwood Financial Partners, LLC (hereinafter “SFPL”) is a Limited Liability Company
organized in the State of California. The firm was formed in February 2019, and the
principal owner is Matthew Davis.
B. Types of Advisory Services
Portfolio Management Services
SFPL offers ongoing portfolio management services based on the individual goals,
objectives, time horizon, and risk tolerance of each client. SFPL creates an Investment
Policy Statement for each client, which outlines the client’s current situation (income, tax
levels, and risk tolerance levels) and then constructs a plan to aid in the selection of a
portfolio that matches each client's specific situation. Portfolio management services
include, but are not limited to, the following:
• Investment strategy • Personal investment policy
• Asset allocation • Asset selection
• Risk tolerance • Regular portfolio monitoring
SFPL evaluates the current investments of each client with respect to their risk tolerance
levels and time horizon. SFPL will request discretionary authority from clients in order to
select securities and execute transactions without permission from the client prior to each
transaction. Risk tolerance levels are documented in the Investment Policy Statement.
SFPL seeks to provide that investment decisions are made in accordance with the
fiduciary duties owed to its accounts and without consideration of SFPL’s economic,
investment or other financial interests. To meet its fiduciary obligations, SFPL attempts to
avoid, among other things, investment or trading practices that systematically advantage
or disadvantage certain client portfolios, and accordingly, SFPL’s policy is to seek fair and
equitable allocation of investment opportunities/transactions among its clients to avoid
favoring one client over another over time. It is SFPL’s policy to allocate investment
opportunities and transactions it identifies as being appropriate and prudent among its
clients on a fair and equitable basis over time.
SFPL has discretion to choose third-party investment advisers to manage all or a portion
of the client's assets. Before selecting other advisers for clients, SFPL will always ensure
those other advisers are properly licensed or registered as an investment adviser. SFPL
conducts due diligence on any third-party investment adviser, which may involve one or
more of the following: phone calls, meetings, and review of the third-party adviser's
performance and investment strategy. SFPL then makes investments with a third-party
investment adviser by investing with the third-party adviser. SFPL will review the
ongoing performance of the third-party adviser as a portion of the client's portfolio.
Family Office Engagement
SFPL’s Family Office Engagement is a service offering for high-net-worth families which
span multiple generations. These services aim to provide practical management of the
finances for entire households and one-stop concierge assistance. Clients under a Family
Office Engagement also receive the Portfolio Management Services described above, and
the fee structure is based on assets under management.
Intelligent Investing Engagement
Sherwood’s Intelligent Investing engagement consists of basic financial planning and
initial and discretionary investment portfolio management through an automated
investment program (“the Program”). As part of SFPL’s Intelligent Investing service, SFPL
allocates client assets among ETFs and a cash allocation in accordance with clients’ stated
investment objectives.
Use of Schwab Institutional Intelligent Portfolios
As mentioned above, Sherwood manages client portfolios through the Program, an
automated investment program through which clients are invested in a range of
investment strategies SFPL constructs and manages. The client’s portfolio is held in a
brokerage account opened by the client at Charles Schwab & Co., Inc. (“Schwab”). The
Program is operated by us using the Institutional Intelligent Portfolios platform
(“Platform”) offered by Schwab Performance
technologies (“SPT”), a software provider
to independent investment advisors and an affiliate of Schwab. Sherwood is independent
of and not owned by, affiliated with, or sponsored or supervised by SPT, Schwab, or their
affiliates. SFPL is the client’s investment adviser and primary point of contact with respect
to the Program. SFPL is solely responsible for determining the appropriateness of the
Program for the client, choosing a suitable investment strategy and portfolio for the
client’s investment needs and goals, and managing that portfolio on an on-going basis.
SFPL has contracted with SPT to provide Sherwood the Platform, which consists of
technology and related trading and account management services for the Program. The
Platform enables Sherwood to make the Program available to clients online and includes
a system that automates certain key parts of SFPL’s investment process. Clients do not
pay brokerage commissions or any other fees to Schwab as part of the Program.
Financial Planning
Financial plans and financial planning may include but are not limited to investment
planning, life insurance, tax concerns, retirement planning, college planning, and
debt/credit planning.
In offering financial planning, a conflict exists between the interests of the investment
adviser and the interests of the client. The client is under no obligation to act upon the
investment adviser’s recommendation, and, if the client elects to act on any of the
recommendations, the client is under no obligation to affect the transaction through the
investment adviser.
Basic Tax Preparation
SFPL provides basic federal and state tax preparation services to individuals and small
businesses.
Services Limited to Specific Types of Investments
SFPL generally limits its investment advice to mutual funds and ETFs, although SFPL
primarily recommends value-based indexing with active management on the bond side.
SFPL may use other securities as well to help diversify a portfolio when applicable.
Written Acknowledgement of Fiduciary Status
When we provide investment advice to you regarding your retirement plan account or
individual retirement account, we are fiduciaries 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. The way we make money
creates some conflicts with your interests, so we operate under a special rule that
requires us to act in your best interest and not put our interest ahead of yours. Under
this special rule’s provisions, we must:
• Meet a professional standard of care when making investment recommendations
(give prudent advice);
• Never put our financial interests ahead of yours when making recommendations
(give loyal advice);
• Avoid misleading statements about conflicts of interest, fees, and investments;
• Follow policies and procedures designed to ensure that we give advice that is in
your best interest;
• Charge no more than is reasonable for our services; and
• Give you basic information about conflicts of interest.
C. Client Tailored Services and Client Imposed Restrictions
SFPL will tailor a program for each individual client. This will include an interview
session to get to know the client’s specific needs and requirements as well as a plan that
will be executed by SFPL on behalf of the client. SFPL may use model allocations together
with a specific set of recommendations for each client based on their personal restrictions,
needs, and targets. Clients may not impose restrictions in investing in certain securities or
types of securities in accordance with their values or beliefs.
D. Wrap Fee Programs
A wrap fee program is an investment program where the investor pays one stated fee that
includes management fees and transaction costs. SFPL does not participate in wrap fee
programs.
E. Assets Under Management
SFPL has the following assets under management:
Discretionary Amounts: Non-discretionary Amounts: Date Calculated:
$ 291,568,048.00 $ 9,807.00 December 2023