CBM Financial, LLC, dba Watercolor Financial, an LLC in the state of Texas, was established in November 2020 by Hal Bleckley Dobbs, Jr., Cathryn Grange, and Megan K. Poore. Watercolor Financial is owned by Hal Bleckley Dobbs, Jr., Cathryn Grange, and Megan K. Poore. Our main office is located in Austin, TX 78759. 4a1: Principal Members
• Megan K. Poore, President; Hal Bleckley Dobbs, Jr., Chief Compliance Officer and Cathryn Grange, Financial Advisor are the principal members of CBM Financial, LLC. They may be contacted by email at [email protected] or by telephone at (512) 250-1544. 4b: Types of Advisory Services Watercolor Financial offers investment advisory services to our clients’ accounts with discretionary authority. Watercolor Financial’s services include investment management, financial planning, consulting services and retirement advisory services. Prior to providing advisory services, clients are required to enter into a written agreement with Watercolor Financial. When we provide investment advice to you regarding your retirement plan account or individual retirement account, we are fiduciaries within the meaning of Title I of the Employee Retirement Income Security Act and/or the Internal Revenue Code, as applicable, which are laws governing retirement accounts. The way we make money creates some conflicts with your interests, so we operate under a special rule that requires us to act in your best interest and not put our interests ahead of yours. As fiduciaries we are obligated to do the following:
• Meet a professional standard of care when making investment recommendations (give prudent advice);
• Never put our financial interests ahead of yours when making recommendations (give loyal advice);
• Avoid misleading statements about conflicts of interest, fees, and investments;
• Follow policies and procedures designed to ensure that we give advice that is in your best interest;
• Charge no more than is reasonable for our services; and
• Give you basic information about conflicts of interest. Investment Management Services We work with our clients to identify their investment goals and objectives as well as risk tolerance in order to create an initial portfolio investment strategy designed to integrate with their specific financial goals and objectives. The Firm focuses on providing clients with investment portfolios designed to balance client specific risk and return requirements. Portfolios are constructed using a strategic asset allocation approach to provide a globally balanced investment strategy. Portfolios are constructed with diversified mutual funds, and exchange traded funds. Individual stocks and bonds can be used if appropriate for individual client needs. Each portfolio will initially be designed to meet a particular investment goal which Watercolor Financial has determined to be suitable to our client’s circumstances. Once the appropriate portfolio construction has been determined, we will monitor and rebalance the account based upon our client’s individual needs, stated goals and objectives. Watercolor Financial’s strategy, generally, will be to seek to meet client investment objectives while providing clients with access to personal advisory services. Watercolor Financial may also provide advice about any type of legacy investment holding or other investments held in client portfolios. As a fiduciary, Watercolor Financial always acts solely in your best interests. Your portfolio is customized based on your investment objectives. You may make requests or make suggestions in writing regarding the investments made in your portfolio. Restrictions on trading which, in our opinion, are not in your best interest cannot be honored and if forced may result in the termination of our agreement. Financial Planning Services Watercolor Financial offers a range of financial planning services for our clients. Planning services are provided in conjunction with our investment management services. Financial Planning services are generally complimentary for clients that have investment management services. The exception would be if financial planning is requested for complex situations beyond our normal scope listed below. The services take into account information collected from the client such as financial status, investment objectives, tax status, and financial resources, among other data. With respect to estate planning and tax planning, our role will be that of a coordinator between you and your designated professional(s). Financial Planning includes, in all or part, but is not limited to, the preparation of a financial plan for an investment advisory client which may include reviews and recommendations on any or all of the following areas depending on the client’s circumstances: ▪ Investment Planning: Determine with the client, based on their goals, time horizon and risk tolerance, how to structure a suitable portfolio (using mutual funds and ETF’s) using principles of diversification, asset allocation, and sometimes asset location. ▪ Investment Policy Statements: Determining specific parameters within which a client’s investments will be managed that can include the weighting of stocks to bonds to cash, the limitation on the use of any particular type of security, the methodology used for rebalancing and so on. ▪ Portfolio review and evaluation: Assessment of a client’s existing portfolio to determine suitability of their current investments and in some cases, evaluating the differences between such and the methods Watercolor Financial utilizes to manage assets. Evaluation can include weighting of asset classes, types of securities used, concentrated positions, tax efficiency of investments, expense ratios and so forth. ▪ Capital Needs Analysis (Goal Funding): A method using time value of money calculations to determine how much a client would need to save, at a given level of return, every month or year in order to achieve a certain financial goal, such as paying for 4 years of college for their child. ▪ Tax Management and Planning: Forward-looking tax strategy that can help a client minimize their tax expenses and maximize what they have to invest. This can include planning for Roth Conversions, Strategic Charitable giving, Deferring income into tax advantaged retirement accounts, and tax-loss harvesting. ▪ Trust and Estate Planning: Helping a client understand how assets are distributed upon death and at times, working with their estate planning attorneys to achieve both their financial and estate planning goals. This also involves review of beneficiary designations and ensuring clients have the proper and updated documents drafted to ensure they are always in control of how assets will be distributed. ▪ Retirement Planning: Gathering data that relates to a client’s assets, liabilities, expenses, goals and savings, and evaluating such to determine the most appropriate strategy to achieving the greatest probability of being able to retire in the lifestyle they desire and maintain such for the rest of their lives. ▪ Social Security: Helping a client decide when to file for social security is a critical part of the retirement planning process. Married clients are advised on how to make their selections based on their particular circumstances as a couple and can involve a complex analysis that depends on longevity, income needs, and whether the client/s intend to work in their retirement. ▪ Employee Benefits: If a client is an employee and has access to benefits, an analysis of available benefits can be done together with the client, offering advice on what benefits should be selected based upon the particular client’s wishes, goals and family needs. This can include various types of insurance, Flexible Spending accounts, Employee Stock Purchase plans, Restricted Stock Awards, Options, and so on. ▪ Education Planning: Helping clients plan financially for the expenses involved in education and the function of various tax advantaged ways of saving for such expenses such as with a 529 plan and annual gifting. ▪ Budgeting and Cash Flow Planning: Determining with the client what their net income and monthly/annual expenses are so as to determine where costs might be reduced to produce additional cash flow that can be allocated towards goals. ▪ Debt Management: Where

a client has debts, gathering data on the nature and interest rates being paid on all liabilities, then completing a cash flow analysis to come up with the best strategy for tackling the paying down of debt in the most efficient way possible. ▪ Business Planning: If a client has or wishes to set up a small business, advice can be provided on entity selection, setting up of a retirement plan, employee benefits, and potentially a cross-purchase/buy-sell agreement. ▪ Charitable Giving: When a client wishes to be philanthropic, Watercolor Financial can assist the client in how to leverage their investments to maximize contributions and provide tax advantages simultaneously. This can include gifting of required minimum distributions (RMD’s), setting up of Donor Advised Funds or gifting of highly appreciated shares, to name a few. ▪ Risk Management (Life and Disability Insurance): Watercolor Financial does not sell insurance products but can offer advice on what types of insurance a client may need or be lacking and how much would be adequate to ensure their goals are still met in the event of a disability or premature death. ▪ Disability Planning and Income Protection: Using various planning tools, an analysis of any current income protection a client may have through work (or owned individually) is completed to determine whether there any “gaps” that might leave the client’s family unable to meet financial goals and if so, providing advice with finding the appropriate coverage. Retirement Plan Advisory Services The Retirement Plan Advisory Services we offer help employer plan sponsors to establish, monitor and review their company’s retirement plan. As the needs of the plan sponsor dictate, areas of advising could include investment selection and monitoring plan structure and participant education. Our firm provides its advisory services as an investment advisor as defined under Section 3(21) and Section 3(38) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). We offer investment management of 401(k) accounts, profit sharing plans and defined contribution plans on a Plan level by managing the investment line-up making changes as necessary. Our firm will establish the plan’s needs and objectives through an initial meeting to collect data, review plan information and assist in developing or updating the plan’s provision. Ongoing services may include recommendations regarding the selection and review of unaffiliated mutual funds that, in the Firm’s judgment, are suitable for plan assets to be invested. We periodically review the investment options selected and make recommendations to keep or replace plans investment options as appropriate. For employer-sponsored retirement plans, we provide advisory services as an investment advisor as defined under Section 3(38) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). When serving as an ERISA 3(38) investment manager, the plan sponsor is relieved of all fiduciary responsibility for the investment decisions made by our firm. We are the discretionary investment manager in accordance with the terms of a separate ERISA 3(38) Investment Management Agreement between our firm and the plan sponsor. Our investment management is limited in that it has the discretion solely to replace funds in plan fund lineups and initiate the transfer of existing balances to the replacements without prior approval from the client. Additionally, our firm offers Retirement Plan Consulting Services to our Plan Sponsors. Our Firm may assist the Plan Sponsor by acting as a service provider liaison, providing participant enrollment meetings, and assisting with participant education. While the primary clients for these services will be pension, profit sharing and 401(k) plans, we offer these services, where appropriate, to individuals and trusts and organizations. Pension Consulting Services are comprised of four distinct services. Clients may choose to use any or all of these services.
• SELECTION OF INVESTMENT VEHICLES - We assist plan sponsors in constructing appropriate asset allocation models. We will then review various mutual funds (both index and managed) to determine which investments are appropriate. The number of investments to be recommended will be determined by the client.
• MONITORING OF INVESTMENT PERFORMANCE - We monitor client investments continually, based on the procedures and timing intervals detailed in the Investment Policy Statement. Although our firm is not involved in any way in the purchase or sale of these investments, we supervise the client's portfolio and will make recommendations to the client as market factors and the client's needs dictate.
• PARTICIPANT ENROLLMENT - We will assist Plan Sponsor in enrolling Plan participants in the Plan, including conducting an agreed upon number of enrollment meetings. As part of such meetings, we will provide participants with information about the Plan, which may include information on the benefits of Plan participation, the benefits of increasing Plan contributions, the impact of preretirement withdrawals on retirement income, the terms of the Plan, and the operation of the Plan.
• PLAN EDUCATION - We will assist participant education, which may include preparation of education materials and/or conducting investment education seminars and meetings for Plan Participants. Such meetings may be on a group and/or individual basis. Such meetings shall not include specific investment advice about investment options under the Plan as being appropriate for a particular participant but may include the use of education investment models. Plan participants have the ability to exercise control over the assets in their account, and we have no authority or discretion to direct the investment of assets of any participant’s account under the Retirement Plan Consulting services offered by our firm.
• ADDITIONAL INFORMATION CONCERNING PENSION & RETIREMENT PLAN CONSULTING- All pension consulting services shall be in compliance with applicable State rules and statutes and/or the Investment Advisers Act of 1940, rules and regulations thereunder regulating the services provided by this Agreement. This section applies to an Account that is a pension or other employee benefit plan (a “Plan”) governed by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). If the Account is part of a Plan and we accept appointments to provide advisory services to such Account, Advisor acknowledges that it is a fiduciary within the meaning of Section 3(21) of ERISA (but only with respect to the provision of services described in section 1 of this agreement). Client represents that (i) Advisor’s appointment and services are consistent with the Plan documents, (ii) Client has furnished Advisor true and complete copies of all documents establishing and governing the Plan and evidencing your authority to retain Advisor. Client further represents that he will promptly furnish Advisor with any amendments to the Plan, and Client agrees that, if any amendment affects our rights or obligations, such amendment will be binding on Advisor only with our prior written consent. If ERISA or other applicable law requires bonding with respect to the assets in the account, Client will obtain and maintain at his/her/its expense bonding that satisfies this requirement and covers Advisor and any of our affiliates. 4c: Client Tailored Relationships and Restrictions As a fiduciary, Watercolor Financial always acts solely in your best interests. Your portfolio is customized based on your investment objectives. You may make requests or make suggestions regarding the investments made in your portfolio. Restrictions on trading which, in our opinion, are not in your best interest cannot be honored and if forced may result in the termination of our agreement. You are under no obligation to act upon Watercolor Financial's or associated person's recommendations. 4d: Wrap Fee Program Watercolor Financial does not sponsor nor provide portfolio management services to a wrap fee program. 4e: Assets under Management (AUM) As of 12/31/2023 Watercolor Financial has $152,823,767 in assets managed on a discretionary basis and $0 in assets managed on a non-discretionary basis.