A. Pinney & Scofield, Inc. (the “Firm”) is a corporation formed on July 1, 2003 in the
Commonwealth of Massachusetts. The Firm is owned by Richard Seeley and John
Goddard.
B. As discussed below, the Firm offers to its clients (generally individuals, trusts and
charitable organizations) the combined service of financial planning and investment
management. The Firm shall only be responsible for advising on financial
situations/positions for which the client has made the Firm aware.
The Firm’s portfolio management method is based on the idea that markets are efficient
and that market activity cannot be predicted. The Firm believes that the most prudent
method of investment management is the establishment of a fully diversified portfolio of
passively managed factor and/or index mutual funds or exchange traded funds (“ETFs”).
The allocation to fixed income is determined by the financial situation and risk preferences
of the client. The resulting split between fixed income and equities is then allocated by
percent across multiple assets classes within each. The portfolio structure is described by
an Investment Policy Statement, signed by the client, that describes both the desired asset
class weights and also the parameters as to when the portfolio is to be rebalanced back to
those weights. The management method then follows – periodic reviews of the portfolio
by the Firm, and a rebalancing back to policy weights when required, with capital flows
and taxes taken into consideration along with other factors. The Firm makes no attempt to
time or predict the future of the financial markets.
INVESTMENT ADVISORY SERVICES
The client can determine to engage the Firm to provide discretionary investment advisory
and financial planning combined services on a fee-only basis. The Firm’s annual
investment advisory fee is based upon a percentage (%) of the market value of the assets
placed under the Firm’s management, generally between 0.25% and 0.75%.
The Firm's investment advisory fee shall include investment advisory services, and
financial planning and consulting services. In the event that the client requires
extraordinary planning and/or consultation services (to be determined in the sole discretion
of the Firm), the Firm may determine to charge for such additional services, the dollar
amount of which shall be set forth in a separate written notice to the client.
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
The Firm may provide financial planning and/or consulting services (including investment
and non-investment related matters, estate planning, insurance planning, etc.) on a stand-
alone separate fee basis.
Prior to engaging the Firm to provide planning or consulting services, clients are generally
required to enter into a Financial Planning and Consulting Agreement with the Firm setting
forth the terms and conditions of the engagement (including termination), describing the
scope of the services to be provided, and the portion of the fee that is due from the client
prior to the Firm commencing services. If requested by the client, the Firm may recommend
the services of other professionals for implementation purposes. The client is under no
obligation to engage the services of any such recommended professional. The client retains
absolute discretion over all such implementation decisions and is free to accept or reject
any recommendation from the Firm.
If the client engages any professional (i.e., attorney, accountant, insurance agent, etc.),
recommended or otherwise, and a dispute arises thereafter relative to such engagement, the
client agrees to seek recourse exclusively from the engaged professional. At all times, the
engaged licensed professional(s), and not the Firm, shall be responsible for the quality and
competency of the services provided.
MISCELLANEOUS
Limitations of Financial Planning and Non-Investment Consulting/Implementation
Services. To the extent requested by a client, the Firm may provide financial planning and
related consulting services regarding non-investment related matters, such as estate
planning, tax planning, insurance, etc. The Firm does not serve as a law firm, accounting
firm, or insurance agency, and no portion of the Firm’s services should be construed as
legal, accounting, or insurance implementation services.
Accordingly, the Firm does not prepare estate planning documents, tax returns or sell
insurance products. To the extent requested by a client, the Firm may recommend the
services of other professionals for certain non-investment implementation purposes (i.e.,
attorneys, accountants, insurance agents, etc.).
Clients are reminded that they are under no obligation to engage the services of any such
recommended professional. The client retains absolute discretion over all such
implementation decisions and is free to accept or reject any recommendation made by the
Firm or its representatives.
If the client engages any professional (i.e., attorney, accountant, insurance agent, etc.),
recommended or otherwise, and a dispute arises thereafter relative to such engagement, the
client agrees to seek recourse exclusively from the engaged professional. At all times, the
engaged licensed professional(s), and not the Firm, shall be responsible for the quality and
competency of the services provided.
Retirement Plan Rollovers – No Obligation / Conflict of Interest. A client or
prospective client leaving an employer typically has four options regarding an existing
retirement plan (and may engage in a combination of these options): (i) leave the money in
the former employer’s plan, if permitted, (ii) roll over the assets to the new employer’s
plan, if one is available and rollovers are permitted, (iii) roll over to an Individual
Retirement Account (“IRA”), or (iv) cash out the account value (which could, depending
upon the client’s age, result in adverse tax consequences). As a general matter, the Firm
does not make a recommendation either to do or not to do a rollover to an IRA and will
leave any rollover determinations to the sole discretion of the client because such a
recommendation creates a conflict of interest if the Firm’s billable assets will increase as a
result. In the rare event that the Firm does recommend that a client rollover their retirement
plan assets into an account managed by the Firm, the Firm is acting as a fiduciary 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. No client is
under any obligation to roll over retirement plan assets to an account managed by the Firm.
Use of Mutual Funds and ETFs: Most mutual funds and ETFs are available directly to
the public. Therefore, a prospective client can obtain many of the funds that may be utilized
by the Firm independent of engaging the Firm as an investment advisor. However, if a
prospective client determines to do so, he/she will not receive the Firm’s initial and ongoing
investment advisory services.
In addition to the Firm’s investment advisory fee described below, and transaction and/or
custodial fees discussed below, clients will also incur, relative to all mutual fund and
exchange traded fund purchases, charges imposed at the fund level (e.g., management fees
and other fund expenses).
However, some mutual funds, such as those issued by Dimensional Fund Advisors
(“DFA”), are generally only available through registered investment advisers. The Firm
may allocate client investment assets to DFA mutual funds. Therefore, upon the
termination of the Firm’s services to a client, restrictions regarding transferability and/or
additional purchases of and/or reallocation among, DFA funds may apply.
Independent Managers. The Firm may allocate a portion of the client’s investment assets
among unaffiliated independent investment managers in accordance with the client’s
designated investment objective(s). In such situations, the Independent Managers shall
have day-to-day responsibility for the active discretionary management of the allocated
assets, including, to the extent applicable, proxy voting responsibility. The Firm shall
continue to render investment supervisory services to the client relative
to the ongoing
monitoring and review of account performance, asset allocation and client investment
objectives. Factors that the Firm shall consider in recommending Independent Managers
include the client’s designated investment objective(s), management style, performance,
reputation, financial strength, reporting, pricing, and research. The investment
management fee charged by the Independent Managers is separate from, and in addition
to, the Firm’s investment advisory fee disclosed at Item 5 below.
Account Aggregation Platforms. The Firm, in conjunction with the services provided by
third-party account aggregation platforms, may be engaged to provide comprehensive
management and reporting services incorporating a client’s investment assets not held in a
traditional broker-dealer/custodian account. These investment assets are typically held in
an employer sponsored retirement plan such as a 401(k) or 403(b) etc. In such cases, the
Firm will receive signed authorization from the client that the Firm may access these
accounts to trade on the client’s behalf and collect transactional, position and pricing data
using the platform’s services. These assets will be subject to the terms and conditions of
the
Investment Advisory Agreement and
Investment Policy Statement between the Firm and
the client and will be included as assets for the determination of the Firm’s fee as discussed
in Item 5a below.
Socially Responsible (ESG) Investing Limitations. Socially Responsible Investing
involves the incorporation of Environmental, Social and Governance (“ESG”)
considerations into the investment due diligence process. ESG investing incorporates a set
of criteria/factors used in evaluating potential investments: Environmental (i.e., considers
how a company safeguards the environment); Social (i.e., the manner in which a company
manages relationships with its employees, customers, and the communities in which it
operates); and Governance (i.e., company management considerations). The number of
companies that meet an acceptable ESG mandate can be limited when compared to those
that do not and could underperform broad market indices. Investors must accept these
limitations, including potential for underperformance. Correspondingly, the number of
ESG mutual funds and exchange-traded funds are limited when compared to those that do
not maintain such a mandate. As with any type of investment (including any investment
and/or investment strategies recommended and/or undertaken by the Firm), there can be
no assurance that investment in ESG securities or funds will be profitable or prove
successful. The Firm does not maintain or advocate an ESG investment strategy but will
seek to employ ESG if directed by a client to do so. If implemented, the Firm shall rely
upon the assessments undertaken by the unaffiliated mutual fund, exchange traded fund or
separate account portfolio manager to determine that the fund’s or portfolio’s underlying
company securities meet a socially responsible mandate.
Cash Positions. The Firm continues to treat cash as an asset class although the Firm does
not allocate specifically to it. As such, unless determined to the contrary by the Firm, all
cash positions (money markets, etc.) shall continue to be included as part of assets under
management for purposes of calculating the Firm’s advisory fee. At any specific point in
time, the Firm may maintain cash positions for fee deductions or upon client request or to
meet a known upcoming liquidity event. While assets are maintained in cash, such amounts
could miss market advances. Depending upon current yields, at any point in time, the
Firm’s advisory fee could exceed the interest paid by the client’s money market fund.
Client Obligations. In performing its services, the Firm shall not be required to verify any
information received from the client or from the client’s other designated professionals and
is expressly authorized to rely thereon. Moreover, each client is advised that it remains
their responsibility to promptly notify the Firm if there is ever any change in their financial
situation or investment objectives for the purpose of reviewing, evaluating or revising the
Firm’s previous recommendations and/or services.
Cybersecurity Risk. The information technology systems and networks that the Firm and
its third-party service providers use to provide services to the Firm’s clients employ various
controls, which are designed to prevent cybersecurity incidents stemming from intentional
or unintentional actions that could cause significant interruptions in the Firm’s operations
and result in the unauthorized acquisition or use of clients’ confidential or non-public
personal information. Clients and the Firm are nonetheless subject to the risk of
cybersecurity incidents that could ultimately cause them to incur losses, including for
example: financial losses, cost and reputational damage to respond to regulatory
obligations, other costs associated with corrective measures, and loss from damage or
interruption to systems. Although the Firm has established procedures to reduce the risk of
cybersecurity incidents, there is no guarantee that these efforts will always be successful,
especially considering that the Firm does not directly control the cybersecurity measures
and policies employed by third-party service providers. Clients could incur similar adverse
consequences resulting from cybersecurity incidents that more directly affect issuers of
securities in which those clients invest, broker-dealers, qualified custodians, governmental
and other regulatory authorities, exchange and other financial market operators, or other
financial institutions.
Cryptocurrency: For clients who want exposure to cryptocurrencies, including Bitcoin,
the Firm, will advise the client to consider a potential investment in corresponding
exchange traded securities, or an allocation to separate account managers and/or private
funds that provide cryptocurrency exposure. Crypto is a digital currency that can be used
to buy goods and services but uses an online ledger with strong cryptography (i.e., a
method of protecting information and communications through the use of codes) to secure
online transactions. Unlike conventional currencies issued by a monetary authority,
cryptocurrencies are generally not controlled or regulated and their price is determined by
the supply and demand of their market. Because cryptocurrency is currently considered
to be a speculative investment, the Firm will not exercise discretionary authority to
purchase a cryptocurrency investment for client accounts. Rather, a client must expressly
authorize the purchase of the cryptocurrency investment.
The Firm does not recommend or advocate the purchase of, or investment in,
cryptocurrencies. The Firm considers such an investment to be speculative.
Clients who authorize the purchase of a cryptocurrency investment must be prepared for
the potential for liquidity constraints, extreme price volatility and complete loss of
principal.
Disclosure Statement. A copy of the Firm’s written Brochure and Client Relationship
Summary, as set forth on Part 2A of Form ADV and Form CRS respectively, shall be
provided to each client prior to, or contemporaneously with, the execution of the
Investment Advisory Agreement or Financial Planning and Consulting Agreement.
The Firm’s Disclosure Brochure can also be accessed free of charge at any time on the
Firm’s website at
https://www.pinneyandscofield.com/resources.
C. The Firm shall provide investment advisory services specific to needs of each client. Prior
to providing investment advisory services, an investment adviser representative will
discuss with each client, their particular investment objective(s). The Firm shall allocate
each client’s investment assets consistent with their designated investment objective(s).
Clients may, at any time, impose restrictions, in writing, on the Firm’s services.
D. The Firm does not participate in a wrap fee program.
E. As of December 31, 2023, the Firm had $666,151,537 in assets under management on a
discretionary basis.