A. Firm Information Smith Brothers Financial, LLC (“Smith Brothers Financial” or the “Advisor”) is a registered investment advisor with the U.S. Securities and Exchange Commission. Smith Brothers Financial was organized as a Limited Liability Company (“LLC”) under the laws of the State of Connecticut in 1988 and became a registered investment advisor in September 2022. Smith Brothers Financial is owned and operated by Joseph B. Smith (Chief Executive Officer) and Stephen R. Michaels (President).
This Disclosure Brochure provides information regarding the qualifications, business practices, and the advisory services provided by Smith Brothers Financial. For information regarding this Disclosure Brochure, please contact Andrea Camoin (Chief Compliance Officer) at (800) 426-6946.
B. Advisory Services Offered Smith Brothers Financial offers investment advisory services to individuals, high net worth individuals, trusts, estates, and retirement plans (each referred to as a “Client”).
The Advisor serves as a fiduciary to Clients, as defined under the applicable laws and regulations. As a fiduciary, the Advisor upholds a duty of loyalty, fairness and good faith towards each Client and seeks to mitigate potential conflicts of interest. Smith Brothers Financial’s fiduciary commitment is further described in the Advisor’s Code of Ethics. For more information regarding the Code of Ethics, please see Item 11 – Code of Ethics, Participation or Interest in Client Transactions and Personal Trading.
Investment Management Services Smith Brothers Financial provides customized investment advisory solutions for its Clients. This is achieved through continuous personal Client contact and interaction while providing discretionary investment management and related advisory services. Smith Brothers Financial works closely with each Client to identify their investment goals and objectives, as well as risk tolerance and financial situation in order to create a portfolio strategy. Smith Brothers Financial will primarily construct an investment portfolio, consisting of diversified mutual funds and/or exchange-traded funds (“ETFs”) to achieve the Client’s investment goals. The Advisor may also utilize individual stocks, bonds, unaffiliated money managers, and/or other types of investments, as appropriate, to meet the needs of its Clients (as described below). The Advisor may retain certain legacy investments based on portfolio fit and/or tax considerations.
Smith Brothers Financial’s investment approach is primarily long-term focused, but the Advisor may buy, sell or re-allocate positions that have been held for less than one year to meet the objectives of the Client or due to market conditions. Smith Brothers Financial will construct, implement and monitor the portfolio to ensure it meets the goals, objectives, circumstances, and risk tolerance agreed to by the Client. Each Client will have the opportunity to place reasonable restrictions on the types of investments to be held in their respective portfolio, subject to acceptance by the Advisor.
Smith Brothers Financial evaluates and selects investments for inclusion in Client portfolios only after applying its internal due diligence process. Smith Brothers Financial may recommend, on occasion, redistributing investment allocations to diversify the portfolio. Smith Brothers Financial may recommend specific positions to increase sector or asset class weightings. The Advisor may recommend employing cash positions as a possible hedge against market movement. Smith Brothers Financial may recommend selling positions for reasons that include, but are not limited to, harvesting capital gains or losses, business or sector risk exposure to a specific security or class of securities, overvaluation or overweighting of the position[s] in the portfolio, change in risk tolerance of the Client, generating cash to meet Client needs, or any risk deemed unacceptable for the Client’s risk tolerance.
At no time will Smith Brothers Financial accept or maintain custody of a Client’s funds or securities, except for the limited authority as outlined in Item 15 – Custody. All Client assets will be managed within the designated account[s] at the Custodian, pursuant to the terms of the advisory agreement. Please see Item 12 – Brokerage Practices.
Use of Independent Managers – Smith Brothers Financial may recommend to Clients that all or a portion of their portfolio be implemented by utilizing one or more unaffiliated money managers or investment platforms (herein the “Independent Managers”). The Client will be required to enter into one or more separate agreements with the Independent Manager[s] that provide for discretionary management by the Independent Managers of the investment platform.
Smith Brothers Financial serves as the Client’s primary advisor and relationship manager and will oversee the account[s] to ensure the Independent Manager[s] are managing consistent with the selected investment strategy[ies]. However, the Independent Manager[s] will assume discretionary authority for the day-to-day investment management of those assets placed in their control. Smith Brothers Financial will assist and advise the Client in establishing investment objectives for their account[s], the selection of the Independent Manager[s], and defining any restrictions on the account[s]. Smith Brothers Financial will continue to provide oversight of the Client’s account[s] and ongoing monitoring of the activities of these unaffiliated parties.
The Independent Manager[s] will implement the selected investment strategies based on their investment mandates. The Client may be able to impose reasonable investment restrictions on these accounts, subject to the acceptance of these third parties.
Prior to entering into an agreement with an Independent Manager, the Client will be provided with each Independent Manager[s] Form ADV Part 2A – Disclosure Brochure (or a brochure that makes the appropriate disclosures) as well as a disclosure statement that defines the relationship between Smith Brothers Financial and the Independent Manager[s]. Smith Brothers Financial does not receive any compensation from these Independent Managers or Investment Platforms, other than Smith Brothers Financial’s investment advisory fee, as described in Item 5 – Fees and Compensation.
Retirement Accounts – When the Advisor provides investment advice to Clients regarding ERISA retirement accounts or individual retirement accounts (“IRAs”), the Advisor is a fiduciary within the meaning of Title I of the Employee Retirement Income Security Act (“ERISA”) and/or the Internal Revenue Code (“IRC”), as applicable, which are laws governing retirement accounts. When deemed

to be in the Client’s best interest, the Advisor will provide investment advice to a Client regarding a distribution from an ERISA retirement account or to roll over the assets to an IRA, or recommend a similar transaction including rollovers from one ERISA sponsored Plan to another, one IRA to another IRA, or from one type of account to another account (e.g. commission-based account to fee-based account). Such a recommendation creates a conflict of interest if the Advisor will earn a new (or increase its current) advisory fee as a result of the transaction. No client is under any obligation to roll over a retirement account to an account managed by the Advisor.
Financial Planning Services Smith Brothers Financial will typically provide a variety of financial planning and consulting services to Clients, pursuant to a written financial planning agreement. Services are offered in several areas of a Client’s financial situation, depending on their goals, objectives and financial circumstance.
Generally, such financial planning services involve preparing a formal financial plan or rendering a specific financial consultation based on the Client’s financial goals and objectives. This planning or consulting services may encompass one or more areas of need, including but not limited to, college planning, retirement planning, and small business owner planning. Smith Brothers Financial Wealth will conduct a thorough assessment of the Client’s financial situation to understand the Client’s financial goals, concerns, and dreams. The Advisor will gather and analyze the Client’s existing investment portfolios and any other existing financial plans. The Advisor will identify any gaps that may exist. A financial plan developed for, or financial consultation rendered to the Client will usually include general recommendations for a course of activity or specific actions to be taken by the Client. The Advisor will conduct in-person or virtual meetings to gather initial due diligence and subsequent delivery of the financial plan recommendations. Additional meetings are scheduled based on the Client needs.
Smith Brothers Financial may also refer Clients to an accountant, attorney or other specialists, as appropriate for their unique situation. For certain financial planning engagements, the Advisor will provide a written summary of the Client’s financial situation, observations, and recommendations. For consulting or ad-hoc engagements, the Advisor may not provide a written summary. Plans or consultations are typically completed within six (6) quarters of contract date, assuming all information and documents requested are provided promptly.
Financial planning and consulting recommendations pose a conflict between the interests of the Advisor and the interests of the Client. For example, the Advisor has an incentive to recommend that Clients engage the Advisor for investment management services or to increase the level of investment assets with the Advisor, as it would increase the amount of advisory fees paid to the Advisor. Clients are not obligated to implement any recommendations made by the Advisor or maintain an ongoing relationship with the Advisor. If the Client elects to act on any of the recommendations made by the Advisor, the Client is under no obligation to implement the transaction through the Advisor.
Retirement Plan Advisory Services Smith Brothers Financial provides both 3(21) non-discretionary and 3(38) discretionary retirement plan advisory services on behalf of the retirement plans (each a “Plan”) and the company (the “Plan Sponsor”). The Advisor’s retirement plan advisory services are designed to assist the Plan Sponsor in meeting its fiduciary obligations to the Plan and its Plan Participants. Each engagement is customized to the needs of the Plan and Plan Sponsor.
Services may include some or all of the following: ●Investment Policy Statement (“IPS”) ●Plan Participant enrollment ●Plan Participant education ●Vendor due diligence ●Investment Management (3(38) Services) ●Performance Reporting ●Benchmarking Services These services are provided by Smith Brothers Financial serving in the capacity as a fiduciary under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). In accordance with ERISA Section 408(b)(2), the Plan Sponsor is provided with a written description of Smith Brothers Financial’s fiduciary status, the specific services to be rendered and all direct and indirect compensation the Advisor reasonably expects under the engagement.
C. Client Account Management Prior to engaging Smith Brothers Financial to provide investment advisory services, each Client is required to enter into one or more agreements with the Advisor that define the terms, conditions, authority and responsibilities of the Advisor and the Client. These services may include: ●Establishing an Investment Strategy – Smith Brothers Financial, in connection with the Client, will develop a strategy that seeks to achieve the Client’s goals and objectives.
●Asset Allocation – Smith Brothers Financial will develop a strategic asset allocation that is targeted to meet the investment objectives, time horizon, financial situation and tolerance for risk of each Client.
●Portfolio Construction – Smith Brothers Financial will develop a portfolio for the Client that is intended to meet the stated goals and objectives of the Client.
●Investment Management and Supervision – Smith Brothers Financial will provide investment management and ongoing oversight of the Client’s investment portfolio.
D. Wrap Fee Programs Smith Brothers Financial may include, in addition to securities transaction fees, custodial costs , and administrative fees (herein “Covered Costs”) together with its investment advisory fees. Including these fees into a single asset-based fee is considered a “Wrap Fee Program”. The Advisor customizes its investment management services for its Clients. The Advisor sponsors the Smith Brothers Financial Wrap Fee Program solely as a supplemental disclosure regarding the combination of fees. Depending on the level of trading required for the Client’s account[s] in a particular year, the Client may pay more or less in total fees than if the Client paid its own transaction fees. Please see Appendix 1 – Wrap Fee Program Brochure, which is always included as a supplement to this Disclosure Brochure.
E. Assets Under Management As of December 31, 2023 Smith Brothers Financial manages $846,535,879 in Client assets, $153,894,890 of which are on a discretionary basis and $692,640,989 of which are on a non-discretionary basis. Clients may request more current information at any time by contacting the Advisor.