Item 5 - Additional Compensation .......................................................................................................................... 17
Item 6 - Supervision ..................................................................................................................................................... 17
Firm Description
Trott Brook Financial, Inc. (“Trott Brook”) was founded in 1999 and became registered to
offer investment advisory services in 2018. James Steffen is 100% owner.
Types of Advisory Services
ASSET MANAGEMENT
Trott Brook offers discretionary asset management services to advisory Clients. Trott
Brook will offer Clients ongoing asset management services through determining
individual investment goals, time horizons, objectives, and risk tolerance. Investment
strategies, investment selection, asset allocation, portfolio monitoring and the overall
investment program will be based on the above factors. The Client will authorize Trott
Brook discretionary authority to execute selected investment program transactions as
stated within the Investment Advisory Agreement.
ERISA PLAN SERVICES
Trott Brook provides service to qualified retirement plans including 401(k) plans, 403(b)
plans, pension and profit-sharing plans, cash balance plans, and deferred compensation
plans. Trott Brook may act as a 3(21) advisor:
Limited Scope ERISA 3(21) Fiduciary. Trott Brook may serve as a limited scope ERISA 3(21)
fiduciary that can advise, help and assist plan sponsors with their investment decisions. As an
investment advisor Trott Brook has a fiduciary duty to act in the best interest of the Client. The plan
sponsor is still ultimately responsible for the decisions made in their plan, though using Trott Brook
can help the plan sponsor delegate liability by following a diligent process.
1. Fiduciary Services are:
• Provide investment advice to the Client about asset classes and investment
alternatives available for the Plan in accordance with the Plan’s investment policies
and objectives. Client will make the final decision regarding the initial selection,
retention, removal and addition of investment options. Trott Brook acknowledges
that it is a fiduciary as defined in ERISA section 3 (21) (A) (ii).
• Assist the Client in the development of an investment policy statement (“IPS”). The
IPS establishes the investment policies and objectives for the Plan. Client shall have
the ultimate responsibility and authority to establish such policies and objectives
and to adopt and amend the IPS.
• Provide investment advice to the Plan Sponsor with respect to the selection of a
qualified default investment alternative for participants who are automatically
enrolled in the Plan or who have otherwise failed to make investment elections. The
Client retains the sole responsibility to provide all notices to the Plan participants
required under ERISA Section 404(c) (5) and 404(a)-5.
• Assist in monitoring investment options by preparing periodic investment reports
that document investment performance, consistency of fund management and
conformance to the guidelines set forth in the IPS and make recommendations to
maintain, remove or replace investment options.
• Meet with Client on a periodic basis to discuss the reports and the investment
recommendations.
2. Non-fiduciary Services are:
• Assist in the education of Plan participants about general investment information
and the investment alternatives available to them under the Plan. Client
understands Trott Brook’s assistance in education of the Plan participants shall be
consistent with and within the scope of the Department of Labor’s definition of
investment education (Department of Labor Interpretive Bulletin 96-1). As such,
Trott Brook is not providing fiduciary advice as defined by ERISA 3(21)(A)(ii) to the
Plan participants. Trott Brook will not provide investment advice concerning the
prudence of any investment option or combination of investment options for a
particular participant or beneficiary under the Plan.
• Assist in the group enrollment meetings designed to increase retirement plan
participation among the employees and investment and financial understanding by
the employees.
Trott Brook may provide these services or, alternatively, may arrange for the Plan’s other
providers to offer these services, as agreed upon between
Trott Brook and Client.
3. Trott Brook has no responsibility to provide services related to the following types of
assets (“Excluded Assets”):
• Employer securities;
• Real estate (except for real estate funds or publicly traded REITs);
• Stock brokerage accounts or mutual fund windows;
• Participant loans;
• Non-publicly traded partnership interests;
• Other non-publicly traded securities or property (other than collective trusts and
similar vehicles); or
• Other hard-to-value or illiquid securities or property.
Excluded Assets will not be included in calculation of Fees paid to Trott Brook on the ERISA
Agreement. Specific services will be outlined in detail to each plan in the 408(b)2
disclosure.
ONGOING FINANCIAL PLANNING AND CONSULTING
Ongoing financial planning services include an initial comprehensive evaluation of an
investor's current and future financial state and will be provided by using currently known
variables to predict future cash flows, asset values and withdrawal plans. Trott Brook will
use current net worth, tax liabilities, asset allocation, and future retirement and estate
plans in developing financial plans.
Typical topics reviewed in a financial plan may include but are not limited to:
• Financial goals: Based on an individual's or a family's clearly defined financial
goals, including funding a college education for the children, buying a larger home,
starting a business, retiring on time or leaving a legacy. Financial goals should be
quantified and set to milestones for tracking.
• Personal net worth statement: A snapshot of assets and liabilities serves as a
benchmark for measuring progress towards financial goals.
• Cash flow analysis: An income and spending plan determines how much can be set
aside for debt repayment, savings and investing each month.
• Retirement strategy: A strategy for achieving retirement independent of other
financial priorities. Including a strategy for accumulating the required retirement
capital and its planned lifetime distribution.
• Comprehensive
risk management plan: Identify all risk exposures and provide
the necessary coverage to protect the family and its assets against financial loss. The
risk management plan includes a full review of life and disability insurance,
personal liability coverage, property and casualty coverage, and catastrophic
coverage.
• Long-term investment plan: Include a customized asset allocation strategy based
on specific investment objectives and a risk profile. This investment plan sets
guidelines for selecting, buying and selling investments and establishing
benchmarks for performance review.
• Tax reduction strategy: Identify ways to minimize taxes on personal income to the
extent permissible by the tax code. The strategy should include identification of tax-
favored investment vehicles that can reduce taxation of investment income.
• Estate preservation: Help update accounts, review beneficiaries for retirement
accounts and life insurance, provide a second look at your current estate planning
documents, and prompt you to update your plan when the legal environment
changes or you have major life events such as a marriage, death, or births.
On an ongoing basis Clients should expect to receive an updated Financial statement,
cashflow, annual review, unlimited email and phone support.
If a conflict of interest exists between the interests of Trott Brook and the interests of the
Client, the Client is under no obligation to act upon Trott Brook’s recommendation. If the
Client elects to act on any of the recommendations, the Client is under no obligation to
effect the transaction through Trott Brook. Initial financial plans will be completed and
delivered inside of sixty (60) days contingent upon timely delivery of all required
documentation.
Client Tailored Services and Client Imposed Restrictions
The goals and objectives for each Client are documented in our Client files. Investment
strategies are created that reflect the stated goals and objectives. Clients may impose
restrictions on investing in certain securities or types of securities. Agreements may not be
assigned without written Client consent.
Wrap Fee Programs
Trott Brook’s wrap fee program is for legacy clients only.
Client Assets under Management
As-of December 31, 2022, Trott Brook has $97,393,000 in discretionary Client assets under
management and no non-discretionary Client assets under management.