A. Firm Information
Stonebrook Private Inc. (“Stonebrook” or the “Advisor”) is a registered investment advisor with the U.S.
Securities and Exchange Commission (“SEC”). The Advisor is organized as a Corporation under the laws of
the State of Michigan. Stonebrook was founded in February 2023 and became a registered investment
advisor in March 2023. Stonebrook is owned and operated by Todd D. Knickerbocker (Managing Partner)
and Spencer J. Knickerbocker, CFP®, CFA®, CAIA® (Partner and Chief Investment Officer)
This Disclosure Brochure provides information regarding the qualifications, business practices, and the
advisory services provided by Stonebrook. For information regarding this Disclosure Brochure, please
contact Roseann Higgins (Chief Compliance Officer) at 513.977.8459.
B. Advisory Services Offered
Stonebrook offers wealth management services, including investment management and financial planning,
to individuals, high net worth individuals, trusts, estates, businesses, 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. Stonebrook'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.
Wealth Management Services
Stonebrook 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. Stonebrook 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.
Stonebrook will then construct an investment portfolio utilizing exchange-traded funds (“ETFs”), individual
stocks, covered options, and/or alternative investments. The Advisor may also utilize investment
management programs sponsored the Custodian and its affiliates. The investment programs provide access
to investment products and unaffiliated money managers (as described below). The Advisor may also utilize
mutual funds and/or other types of investments, as appropriate, to meet the needs of the Client. The Advisor
may retain certain legacy investments based on portfolio fit and/or tax considerations.
Stonebrook’s investment strategies are 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. Stonebrook 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.
Stonebrook evaluates and selects investments for inclusion in Client portfolios only after applying its internal
due diligence process. Stonebrook may recommend, on occasion, redistributing investment allocations to
diversify the portfolio. Stonebrook 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.
Stonebrook may recommend selling positions for reasons that include, but are not limited to, harvesting
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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 Stonebrook 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.
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.
Participant Account Management – As part of the Advisor’s Investment Management Services, when
appropriate, the Advisor will use a third-party platform, Pontera Solutions, Inc. (“Pontera”), to facilitate
management of held away assets such as defined contribution plan participant accounts, with investment
discretion. The platform enables the Advisor to gain access to Client account without having access
through the Client’s credentials. This independent advisor access ensures that the Advisor will not have
custody of Client funds or securities when implementing trades for the Client. The Advisor is not affiliated
with the platform in any way and receives no compensation from the platform. A link will be provided to
the Client allowing them to connect their account[s] to the platform for the Advisor’s secure access. The
Advisor includes the costs of the Pontera platform in its overall advisory fee.
Use of Independent Managers – Stonebrook may recommend that a Client utilize one or more unaffiliated
investment managers or investment platforms (collectively “Independent Managers”) for all or a portion of a
Client’s investment portfolio. In such instances, the Client may be required to authorize and enter into an
agreement with the Independent Manager[s] that defines the terms in which the Independent Manager[s]
will provide investment management and related services. The Advisor will assist in the development of the
initial policy recommendations and managing the ongoing Client relationship. The Advisor will perform
initial and ongoing oversight and due diligence over the selected Independent Manager[s] to ensure the
Independent Managers’ strategies and target allocations remain aligned with its clients’ investment
objectives and overall best interests. The Client, prior to entering into an agreement with unaffiliated
investment manager[s] or investment platform[s], will be provided with the Independent Manager's Form
ADV 2A (or a brochure that makes the appropriate disclosures).
Financial Planning Services
Stonebrook will typically provide a variety of financial planning and consulting services to Clients as part of
a wealth management engagement. Services are offered in several areas of a Client’s financial situation,
depending on their goals and objectives. 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 may encompass one or more areas of need, including but not limited
to, investment planning, retirement planning, personal savings, education savings, insurance needs, and/or
other areas of a Client’s financial situation.
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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. For example,
recommendations may be made that the Client start or revise their investment programs, commence or alter
retirement savings, establish education savings and/or charitable giving programs.
Stonebrook 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) months 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.
Financial Institution Consulting Services
Stonebrook receives a consulting fee based on the assets under MSI’s management from Brokerage
Customers who have provided written consent to MSI to receive the consulting service from Stonebrook. The
consulting fee is calculated from the assets under MSI’s management as of the end of a calendar quarter
period multiplied by the annualized rate of 17 basis points. The initial fee is paid only after the completion of
one full calendar quarter period following the date of the executed agreement with MSI.
Investment Management Platform
Betterment Institutional Platform - Stonebrook may recommend that certain Clients implement their
investment portfolios through Betterment Institutional, a division of Betterment LLC (herein “Betterment
Institutional” or the “Investment Platform”). Betterment Institutional is what is often termed a “robo-
advisor”, an online wealth management service that provides automated, algorithm-based portfolio
management advice. Robo-advisors use technology to deliver similar services as traditional advisors, but
generally only offer portfolio management and do not get involved in a Client’s personal situation, such as
taxes and retirement or estate planning. Stonebrook chose to affiliate with Betterment Institutional due to
the Investment Platform’s customized portfolio allocations, automated rebalancing, and competitive fees.
Stonebrook utilizes Betterment Institutional as a complement to its comprehensive financial planning
services to provide cost effective investing coupled with personalized financial planning.
To establish accounts with Betterment Institutional, the Client will also enter into one or more agreements
with Betterment that provides the authority for discretionary investment management by the Investment
Platform. Stonebrook remains the Client’s primary advisor and relationship contact and will select or
construct a portfolio of ETFs and/or cash equivalents from the universe of investments included on the
Investment Platform.
Stonebrook will have the discretionary authority to instruct Betterment Institutional with respect to
portfolio construction, asset allocation and other investment decisions, subject to the limitations described
herein.
Betterment Institutional will implement the portfolio and be responsible for the discretionary trading of the
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ETFs in the Client’s portfolio, including the purchase and sale of investments and the automatic rebalancing
back to targets.
Betterment Institutional utilizes between ten to twelve different ETF’s, representing various asset classes
for the construction of investment portfolios. As discussed above, Stonebrook will work with each Client to
select/construct a portfolio to meets the needs of the Client. The Client has limited ability to put restrictions
on its accounts. The account[s] cannot contain investments that are not included in the Betterment
Institutional universe of ETFs and cash equivalents.
Betterment Institutional, under its discretionary authority, will automatically adjust and rebalance the
Client’s accounts daily based on the drift tolerance established for the positions in the investment portfolio.
The Advisor’s investment philosophy is long-term, but the Advisor may make such tactical overrides to take
advantage of market pricing anomalies or strong market sectors. The Advisor does not actively trade in the
Client’s account[s] and is also limited to a enter one allocation change per account per trading day through
Betterment Institutional, the Client should be aware of these potential disadvantages.
For its services, Betterment Institutional will charge an asset-based fee that is in addition to the Advisor’s
fee. Betterment Institutional’s fee includes the securities transaction fees for all trades. The Advisor will only
receive its investment advisory fees as detailed in Item 5.A. below and does not share in any fees earned by
Betterment Institutional.
The Client, prior to entering into an agreement with the Investment Platform, will be provided with the
Investment Platform's Form ADV Part 2A (or a brochure that makes the appropriate disclosures).
Retirement Plan Advisory Services
Stonebrook provides 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 generally include:
• Plan Participant Enrollment and Education Tracking
• Investment Policy Statement (“IPS”) Design and Monitoring
• Investment Oversight (ERISA 3(21))
• Investment Management (ERISA 3(38))
• Ongoing Investment Recommendation and Assistance
These services are provided by Stonebrook 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 Stonebrook’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 Stonebrook to provide investment advisory services, each Client is required to enter into a
wealth management agreement with the Advisor that define the terms, conditions, authority and
responsibilities of the Advisor and the Client.
These services may include:
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• Establishing an Investment Strategy – Stonebrook, in connection with the Client, will develop a
strategy that seeks to achieve the Client’s goals and objectives.
• Asset Allocation – Stonebrook will develop a strategic asset allocation that is targeted to meet the
investment objectives, time horizon, financial situation and tolerance for risk for each Client.
• Portfolio Construction – Stonebrook will develop a portfolio for the Client that is intended to meet the
stated goals and objectives of the Client.
• Investment Management and Supervision – Stonebrook will provide investment management and
ongoing oversight of the Client’s investment portfolio.
D. Wrap Fee Programs
Stonebrook does not manage or place Client assets into a wrap fee program.
E. Assets Under Management
As of January 30, 2024, Stonebrook manages approximately $657,333,876 in Client assets, all of which are managed
on a discretionary basis.