A. Blom & Howell Financial Planning, Inc. (referred to herein as “Adviser”) offers the following types
of advisory services through a wrap fee program:
Services
i. Comprehensive Wealth Management: Adviser offers comprehensive wealth management
services through the provision of either discretionary or non-discretionary investment
management services combined with financial planning services as described below.
These combined services are provided exclusively through a wrap fee program for which
Adviser serves as the sponsor and portfolio manager.
In general, Adviser provides comprehensive wealth management through the
implementation and management of tailored portfolios of diversified assets that are
typically comprised of some combination of stocks, bonds, mutual funds,
exchange-traded funds (“ETFs”), and real estate investment trusts (“REITs”). Such
portfolios are rebalanced periodically to remain in-line with the client’s agreed-upon asset
allocation, though the asset allocation may be changed from time to time based on
changes to a client’s specific situation. In all instances, Adviser accounts for the client’s
current financial condition, goals, risk tolerance, income, liquidity requirements,
investment time horizon, and other information that is relevant to the management of
clients’ account(s).
ii. Financial Planning: Adviser provides a variety of standalone financial planning and
consulting services to clients for the management of financial resources based upon an
analysis of current situations, goals, and objectives. Financial planning services will
typically involve preparing a financial plan or rendering a financial consultation for clients
based on the client’s financial goals and objectives. This planning or consulting may
encompass, but is not limited to, Investment Planning, Retirement Planning, Estate
Planning, Charitable Planning, Education Planning, General Tax Planning, Real Estate
Analysis, Cash Flow/Budget Analysis, Mortgage/Debt Analysis, Debt Management,
Insurance Analysis, or Business and Personal Financial Planning.
Financial plans (delivered in written or digital form depending on the financial planning
technology utilized) or financial consultations rendered to clients usually include general
recommendations for a course of activity or specific actions to be taken by clients.
Implementation of the recommendations will be at the discretion of the client. Financial
consultations are not typically accompanied by a written summary of observations and
recommendations, as the process is less formal than the planning service. Assuming that
all the information and documents requested from the client are provided promptly, plans
or consultations are typically completed within three (3) months of the client signing an
agreement and may encompass multiple meetings.
When rendering financial planning services, a conflict exists between Adviser’s interests
and the interests of its clients; clients are under no obligation to act upon Adviser’s
financial planning recommendations. If a client elects to act on any of the
recommendations made by Adviser, the client is under no obligation to effect the
transaction through Adviser.
iii. Selection of Other Investment Advisers: As part of our asset management
services, TA may recommend that you use the services of a third-party money manager
for asset allocation services to manage your investment portfolio. BHFP acts as a
solicitor to, and recommends, the third-party money management services of AssetMark,
Inc. (“AssetMark”), an unaffiliated Securities and Exchange Commission Registered
Investment Advisor. A conflict of interest exists as we are compensated based on our
asset management advisory fees by AssetMark. After gathering information about your
financial situation and objectives, we may recommend that you engage AssetMark for
discretionary asset management services. Factors that we take into consideration when
making our recommendation of AssetMark include, but are not limited to, the following:
their performance, methods of analysis, fees, your financial needs, investment goals,
risk tolerance, and investment objectives. We will periodically monitor AssetMark’s
performance to ensure its management and investment style remains aligned with your
investment goals and objectives. BHFP will review the calculations on the client’s
quarterly statements for accuracy. BHFP will assist clients in all paperwork including, but
not limited to a risk tolerance or similar document, new account forms, and all other fact-
finding paperwork. BHFP will meet with clients at least once a year regarding managed
accounts with AssetMark.
Fees and Compensation
Adviser is compensated for its comprehensive wealth management services by fees charged
based on a client’s assets under management with Adviser. For clients that do not wish to engage
Adviser to provide comprehensive wealth management services, Adviser alternatively offers
separate financial planning services on a fixed-fee
or hourly basis apart from its wrap fee program
(please refer to Adviser’s separate brochure for a description of such fixed and hourly fees). Fees
are negotiable, and each client’s specific fee schedule is included as part of the investment
advisory agreement signed by Adviser and the client.
Adviser’s maximum comprehensive wealth management fee is 1.00% per annum of client’s
assets under Adviser’s management, charged monthly in arrears based on the average daily
account balance over the course of the previous month. The comprehensive wealth
management fee is inclusive of brokerage and other transaction charges that would
otherwise be charged directly to clients directly by Charles Schwab & Co., Inc. (“Charles
Schwab”), the broker-dealer that Adviser recommends to clients as further described below;
Adviser pays such brokerage and other transaction charges on behalf of clients as part of its
wrap fee program. Clients should be aware that this creates a conflict of interest in that
Adviser is incentivized to trade less frequency so as to not incur such brokerage and
transaction costs. In addition, Charles Schwab has eliminated commissions for online trades
of equities, ETFs and options (subject to $0.65 per contract fee). This means that, in most
cases, when Adviser buys and sells these types of securities, Adviser will not have to pay
any commissions to Charles Schwab. Adviser encourages clients to review Charles
Schwab’s pricing to compare the total costs of entering into a wrap fee arrangement versus
a non-wrap fee arrangement. If a client chooses to enter into a wrap fee arrangement, the
total cost to invest could exceed the cost of paying for brokerage and advisory services
separately. To see what clients would pay for transactions in a non-wrap account please
refer to Charles Schwab’s most recent pricing schedules available at
schwab.com/aspricingguide.
Clients will also typically incur additional fees and expenses imposed by independent and
unaffiliated third-parties, which can include qualified custodian fees, fees for trades executed
away from the qualified custodian, mutual fund or ETF fees and expenses, mark-ups and
mark-downs, spreads paid to market makers, wire transfer fees, check-writing fees,
early-redemption charges, certain deferred sales charges on previously-purchased mutual funds,
margin fees, charges or interest, IRA and qualified retirement plan fees, and other fees and taxes
on brokerage accounts and securities transactions. These additional charges are separate and
apart from the fees charged by Adviser.
Please note that clients with accounts held at American Funds will be subject to an annual fee of
Fees may be payable via direct debit from the client’s account(s), or via ACH, debit/credit card, or
check for clients that elect not to have fees directly debited from their account(s).
If Adviser or a client terminates the advisory agreement before the end of a quarterly billing
period, Adviser’s fees will be prorated through the effective date of the termination and billed to
the client.
Lower fees for comparable services may be available from other sources. Neither Adviser nor any
of its supervised persons accepts compensation for the sale of securities or other investment
products.
B. The wrap fee program offered by Adviser may cost a client more or less than purchasing such
comprehensive wealth management services separately through a non-wrap account, depending
on the volume of trading and the size of the client’s account. In general, a wrap fee program can
be comparatively less expensive for actively traded accounts; conversely, non-wrap fee programs
can be comparatively less expensive for accounts in which there is minimal trading activity.
C. Though wrap fees are inclusive of brokerage commissions and transaction fees, they are
exclusive of other related costs and expenses which may be incurred by the client. Clients may
incur certain charges imposed by custodians, brokers, and other third parties such as deferred
sales charges, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on
brokerage accounts and securities transactions. Mutual fund and exchange traded funds also
charge internal management fees, which are disclosed in a fund’s prospectus. Such charges,
fees and commissions are exclusive of and in addition to the wrap fee, and we shall not receive
any portion of these commissions, fees, and costs.
D. Since Adviser and its investment adviser representatives (“IARs”) generally recommend that
clients participate in the wrap fee program described in this brochure, it will receive compensation
from the client as described above. This compensation may be more or less than if the client
engaged Adviser or an alternative investment adviser to manage his or her account(s) through a
non-wrap fee program in which brokerage and transaction fees are paid separately by clients.
Therefore, Adviser and its IARs have an incentive to recommend its wrap fee program to clients.