A. Ownership/Advisory History
Brown Wealth Management, LLC (“RAI Wealth” or the “firm”) is an Illinois limited liability
company. RAI Wealth became registered as an investment adviser in 2014. The Principal Owner
of RAI Wealth is Scott Brown and the Chief Compliance Officer is Melissa Imbrogno.
B. Advisory Services Offered
The firm offers a variety of services, including financial planning and portfolio management for
individuals, families, and/or small businesses.
Portfolio Management Services
As part of its portfolio management services, in addition to other types of investments, RAI
Wealth may invest client assets according to one or more model portfolios developed by third-
party managers. These models are designed for investors with varying degrees of risk tolerance,
ranging from a more aggressive investment strategy to a more conservative investment
approach. Clients whose assets are invested in model portfolios may set restrictions on the
specific holdings or allocations within the model, such as the types of securities that can be
purchased in the model by providing us written notice related to these restrictions.
RAI Wealth’s portfolio management services may be offered through third-party investment
advisers on a sub-advised basis.
For its discretionary asset management services, RAI Wealth receives a limited power of attorney
to effect securities transactions on behalf of its clients that include securities and strategies
described in Item 8 of this brochure, and to retain and allocate all or a portion of the account to
sub-advisers and third-party asset managers.
Clients have the right to provide the firm with any reasonable investment restrictions that should
be imposed on the management of their portfolio (must be in writing and sent to the firm), and
should promptly notify the firm in writing of any changes in such restrictions or in the client's
personal financial circumstances, investment objectives, goals and tolerance for risk. RAI Wealth
will remind clients of their obligation to inform the firm of any such changes or any restrictions
that should be imposed on the management of the client’s account. RAI Wealth will also contact
clients at least annually to determine whether there have been any changes in a client's personal
financial circumstances, investment objectives and tolerance for risk.
Financial Planning Services
RAI Wealth provides one-time or ongoing financial planning services to the client. Clients will
receive a written financial analysis and plan designed to help achieve their stated financial goals
and objectives.
Based on the client’s needs, financial planning services may include (but are not limited to) the
following:
Net Worth Analysis
Business Planning
Cash Flow Analysis
Education Planning
Investment Planning
Retirement Planning
Estate Planning
Other Goal Planning
The client agrees to provide RAI Wealth, in a timely manner, any and all pertinent information
regarding the client’s financial situation in order for RAI Wealth to analyze the client’s financial
situation and make suitable recommendations. RAI Wealth may provide the client with a
financial information worksheet to assist in providing all pertinent information. The client
understands and acknowledges that all reports and/or recommendations are based upon
information furnished by the client to RAI Wealth. The client will provide RAI Wealth with
necessary supplemental information in writing, which may include any material changes in the
financial status of the client or changes in the financial goals of the client.
The client may implement or disregard, in whole or in part, any recommendation, suggestion, or
advice contained in the report or made by RAI Wealth. The client is under no obligation to
implement any recommendation through RAI Wealth or any affiliated entity of RAI Wealth. If the
client wishes to implement any recommendation, suggestion, or advice contained in the report
or made by RAI Wealth, the client may select any brokerage firm, private investment firm,
insurance agency, broker, carrier, bank, or any other financial services institution to implement
the client’s decisions.
Retirement Plan Advisory Services
RAI Wealth provides various consulting services to qualified employee benefit plans and their
fiduciaries. This suite of institutional services is designed to assist plan sponsors in structuring,
managing and optimizing their corporate retirement plans. Each engagement is individually
negotiated and customized, and may include any or all of the following services.
Ongoing Advisory Services – Plan Level
▪ Advisor will assume ERISA 3(21)(A) fiduciary status as described below. Advisor
acknowledges that its advice: may be relied upon by Plan Sponsor, will form the principal
basis of Plan Sponsor’s adoption of an investment policy or selection of service providers
and is tailored to the specific needs of the Plan.
▪ Advisor will provide guidance on properly structuring an Investment Committee and
participate on the Committee as a non-voting member.
▪ Advisor will assist the Plan Sponsor with the creation and maintenance of an Investment
Policy Statement (IPS). The IPS will include at least the following provisions:
• Plan summary information that outlines the
duties and responsibilities of all Plan
fiduciaries (internal and external);
• A review of the fiduciary standards which apply to each Plan fiduciary and service
provider;
• A review of the due diligence processes which will be followed by the Plan
fiduciaries with regard to matters relating to the IPS;
• A review of the risk evaluation and asset selection criteria which will be used by the
Plan fiduciaries to measure the performance of current and prospective Plan
investment options, together with a summary of the procedures to be followed by
Plan fiduciaries for adding or removing a Plan investment option; and
• A statement of investment criteria for selection of a qualified default, investments
alternative (QDIA) and any model portfolios.
▪ Advisor will, if applicable, conduct a Request for Proposal (RFP) for the selection of any
service providers to the Plan (i.e. custodians, record keepers, administrators, etc.).
Advisor will advise the Plan Sponsor on the hiring, compensation determination, and all
other matters relating to any persons, firms, companies, or corporations employed or
contracted to provide service to the Plan.
▪ Advisor will prepare and present a quarterly report to the Committee on matters related
to the Plan structure, cost, performance, adherence to the IPS, and any fiduciary concerns
that may arise.
▪ Advisor will assist Plan Sponsor in assuring compliance of all service providers with the
fee disclosure requirements of ERISA 408(b)(2) and ERISA Regulation 2550.408b-2 and
compliance of all service providers with the participant fee disclosure requirements of
ERISA 404(a) and ERISA Reg. 2550.404a-5.
▪ Goals for participant level education and advice and elections among investment
alternatives.
Ongoing Advisory Services (401(k) Plan) – Investment Level
▪ Advisor will assume ERISA 3(38) fiduciary status as described below.
▪ Advisor will employ a prudent process to screen, select, and monitor the investments
offered in the Plan. Advisor will monitor the performance of the investment offering in
accordance with the guidelines as set forth in the IPS and will advise the Plan Sponsor
whether said performance should cause the Plan Sponsor to remove any one or more
investment options from the Plan. Advisor will serve as the primary basis for the Plan
Sponsor’s decisions and the Plan Sponsor is entitled to rely on Advisor’s advice.
▪ In conjunction with its responsibilities in 2(B)(b)(i) above and in consultation with and as
directed by the Plan Sponsor, the Advisor will have the following specific obligations:
• Generally maintain the participant’s self-directed program in compliance with
Sections 404(a) and 404(c) of ERISA;
• Select investment alternatives that will allow participants to exercise meaningful
independent control over the assets in their accounts;
• Select investment alternatives that will allow participants to choose among a broad
range of investments and will permit diversification within and among those
alternatives;
• Select investment alternatives that will allow participants to materially affect the
potential return on assets over which the participants exercise control;
• Select and offer no less than three (3) investment alternatives which are diversified
and have materially different risk and return characteristics; and
• Choose a qualified default investment alternative (QDIA) for the Plan in compliance
with the requirements of the Pension Protection Act of 2006 (PPA) and applicable
regulations and other guidance.
Ongoing Advisory Services – Participant Level
▪ All participant level services are intended to qualify and shall qualify with all applicable
requirements for a fee neutral “eligible investment advice arrangement,” as defined in
Section 408(g)(2)(A)(i) of ERISA and applicable regulations and other guidance, and for
such purpose the Advisor shall take all steps necessary and bear all related costs to
qualify as a “fiduciary advisor” for the participant level services in compliance with
Sections 408(b)(14) and 408(g) of ERISA, and applicable regulations and other guidance.
▪ Advisor will prepare and distribute all required Participant Disclosures required under
ERISA 408(g)(6).
▪ Advisor will conduct group education meetings and provide one-on-one advice to
participants on a regularly scheduled basis as agreed upon by the Plan Sponsor and
Advisor.
▪ Advisor will negotiate with service provides to provide complete transparency of fees
consistent with ERISA 408(b)(2) requirements.
C. Client-Tailored Services and Client-Imposed Restrictions
Each client’s account will be managed on the basis of the client’s financial situation and
investment objectives and in accordance with any reasonable restrictions imposed by the client
on the management of the account—for example, restricting the type or amount of security to
be purchased in the portfolio.
D. Wrap Fee Programs
RAI Wealth does not participate in wrap fee programs, where brokerage commissions and
transaction costs are included in the asset-based fee charged to the client.
E. Client Assets Under Management
As of December 31, 2023, RAI Wealth managed $293,443,659 of discretionary assets and
$32,666,790 of non-discretionary assets.