A. AFG is a corporation formed in the state of Arkansas in 1982 and became an SEC registered
investment adviser on April 17, 1985. Frederick E. Adkins III, Kristina K. Bolhouse and John R.
Broadwater are the principal owners of AFG.
This Disclosure Brochure describes the business of AFG. Certain sections will also describe the
activities of its “Supervised Persons”. Supervised Persons are any of AFG’s officers, partners,
directors (or other persons occupying a similar status or performing similar functions), employees,
or any other person who provides investment advice on AFG’s behalf and is subject to AFG’s
supervision or control.
B. AFG offers wealth management services to its clients on a fee only basis, which generally include
a broad range of financial planning services as well as the discretionary management of investment
portfolios. In the event that the client requires extraordinary planning and/or consultation services
(to be determined in the sole discretion of AFG), AFG 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.
To commence the investment advisory process, AFG will ascertain each client’s investment
objective(s) and then allocate the client’s assets consistent with the client’s designated investment
objective(s). Once allocated, AFG provides ongoing supervision of the account(s). Before
engaging AFG to provide any of the foregoing investment advisory services, the client is required
to enter into one or more written agreements with AFG setting forth the terms and conditions of
the engagement (including termination), describing the scope of the services to be provided, and
the fee that is due from the client (collectively the “Agreement”).
WEALTH MANAGEMENT SERVICES
Core Financial Planning Services
Depending upon the needs and direction of the client, the financial planning component of the
wealth management offering can generally include the following services:
• Preparation of a wealth management foundational report;
• Development of an individualized investment policy statement (“IPS”);
• Review and monitoring of wealth management plans;
• Consultation, analysis, advice and assistance related to financial issues or decisions that
may arise in the future; and
• Administration of investment accounts.
Investment Management Services
Clients engage AFG to manage their investment assets on a discretionary basis.
AFG primarily invests clients’ assets among mutual funds, exchange-traded funds (“ETFs”), and
individual debt securities. Individual equity securities, options, and the securities components of
variable annuities and variable life insurance contracts are held only at the client’s request or
pending liquidation. All investments are made in accordance with the investment objectives of the
client.
AFG also may render discretionary investment management services to clients relative to variable
life/annuity products that they may own, their individual employer-sponsored retirement plans, or
other products that may not be held by the client’s primary custodian. In so doing, AFG either
directs or recommends the allocation of client assets among the various investment options that
are available with the product. Client assets are maintained at the specific insurance company or
custodian designated by the product.
MISCELLANEOUS
Limitations of Planning and Non-Investment Consulting/Implementation Services: To the
extent requested by a client, AFG will provide financial planning and related consulting services
regarding non-investment related matters, such as estate planning, tax planning and insurance
review and / or planning, for a separate fee (see Item 5 below) per the terms and conditions of a
written financial planning agreement between AFG and the client. Clients are generally required
to enter into a Financial Planning and Consulting Agreement with AFG 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 AFG commencing services.
AFG does not serve as a law firm, accounting firm, or insurance agency, and no portion of AFG’s
services should be construed as legal, accounting, or insurance implementation services.
Accordingly, AFG does not prepare estate planning or any other type of legal documents, tax
returns or sell insurance products. Neither AFG, nor any of its representatives will assist clients
with implementing aspects of a financial plan, unless they have agreed to do so in writing. To the
extent requested by a client, AFG may recommend the services of other professionals for certain
non-investment implementation purposes (i.e. attorneys, accountants, insurance agents, etc.).
Clients are ultimately responsible for determining whether to hire an unaffiliated recommended
professional (e.g., attorneys, accountants, insurance agents), even if they hire an unaffiliated
recommended professional at AFG’s recommendation and clients are reminded that they are under
no obligation to engage the services of any recommended professional. The client retains absolute
discretion over all such implementation decisions and is free to accept or reject any
recommendation made by AFG or its representatives. If the client engages any unaffiliated
recommended professional, and a dispute arises thereafter, the client agrees to seek recourse
exclusively from the engaged professional. At all times, the engaged licensed professional(s) (i.e.
attorney, accountant, insurance agent, etc.), and not AFG, shall be responsible for the quality and
competency of the services provided.
The fee for financial planning services is separate from, and in addition to, AFG’s investment
management fee. Both AFG’s financial planning and investment management fees are discussed
at Item 5 below. Please Note: AFG believes that it is important for the client to address financial
planning issues on an ongoing basis. AFG’s advisory/financial planning fee, as set forth at Item 5
below, will remain the same regardless of whether or not the client determines to address financial
planning issues with AFG.
Use of Mutual Funds and ETFs: AFG utilizes mutual funds and exchange traded funds for its
client portfolios. While AFG may recommend or invest in mutual funds or exchange traded funds
(“ETFs”) that are not available directly to the public, AFG may also recommend or invest in
publicly-available mutual funds and ETFs that the client could obtain without engaging AFG as
an investment adviser. However, if a client or prospective client determines to invest in these
securities without engaging AFG as an investment adviser, the client or prospective client would
not receive the benefit of AFG’s initial and ongoing investment advisory services. In addition to
AFG’s investment management fee described at Item 5 below, and transaction and/or custodial
fees discussed below, clients will also incur, relative to all mutual fund and ETF purchases, charges
imposed at the fund level (e.g. management fees and other fund expenses).
ERISA PLAN and 401(k) INDIVIDUAL ENGAGEMENTS:
• Trustee Directed Plans. AFG may be engaged to provide discretionary investment
advisory services to ERISA retirement plans, whereby the Firm shall manage Plan assets
consistent with the investment objective designated by the Plan trustees. In such
engagements, AFG will serve as an investment fiduciary as that term is defined under The
Employee Retirement Income Security Act of 1974 (“ERISA”). AFG will generally
provide services on an “assets under management” fee basis per the terms and conditions
of an Investment Advisory Agreement between the Plan and the Firm.
• Client Retirement Plan Assets. If requested to do so, AFG shall provide investment
advisory services relative to 401(k) plan assets maintained by the client in conjunction with
the retirement plan established by the client’s employer. In such event, AFG shall allocate
(or recommend that the client allocate) the retirement account assets among the investment
options available on the 401(k) platform. AFG’s ability shall be limited to the allocation of
the assets among the investment alternatives available through the plan. AFG will not
receive any communications from the plan sponsor or custodian, and it shall remain the
client’s exclusive obligation to notify AFG of any changes in investment alternatives,
restrictions, etc. pertaining to the retirement account. Unless expressly indicated by AFG
to the contrary, in writing, the client’s 401(k) plan assets shall be included as assets under
management for purposes of AFG calculating its advisory fee.
Retirement Rollovers-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). If AFG recommends that a
client roll over their retirement plan assets into an account to be managed by AFG, such a
recommendation creates a conflict of interest if AFG will earn new (or increase its current)
compensation as a result of the rollover. Whether AFG provides a recommendation as to whether
a client should engage in a rollover or not, AFG 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 AFG. AFG’s Chief Compliance
Officer, Mary E. McCraw, remains available to address any questions that a client or
prospective client may have regarding the potential for conflict of interest presented by such
rollover recommendation.
Custodian Charges-Additional Fees: As discussed below at Item 12 below, when
requested to
recommend a broker-dealer/custodian for client accounts, AFG generally recommends that
Fidelity Brokerage Service, LLC and National Financial Services, LLC (collectively “Fidelity”)
serve as the broker-dealer/custodian for client investment management assets. Broker-dealers such
as Fidelity charge brokerage commissions, transaction, and/or other type fees for effecting certain
types of securities transactions (i.e., including transaction fees for certain mutual funds, and mark-
ups and mark-downs charged for fixed income transactions, etc.). The types of securities for which
transaction fees, commissions, and/or other type fees (as well as the amount of those fees) shall
differ depending upon the broker-dealer/custodian (while certain custodians, including Fidelity
generally do not currently charge fees on individual equity transactions (including ETFs), others
do. Please Note: there can be no assurance that Fidelity will not change their transaction fee pricing
in the future. Please Also Note: When beneficial to the client, individual fixed‐income and/or
equity transactions may be effected through broker‐dealers with whom AFG and/or the client have
entered into arrangements for prime brokerage clearing services, including effecting certain client
transactions through other SEC registered and FINRA member broker‐dealers (in which event, the
client generally will incur both the transaction fee charged by the executing broker‐dealer and a
“trade-away” fee charged by Fidelity). These fees/charges are in addition to AFG’s investment
advisory fee at Item 5 below. AFG does not receive any portion of these fees/charges. ANY
QUESTIONS: AFG’s Chief Compliance Officer, Mary E. McCraw, remains available to
address any questions that a client or prospective client may have regarding the above.
Portfolio Activity: AFG has a fiduciary duty to provide services consistent with the client’s best
interest. As part of its investment advisory services, AFG will review client portfolios on an
ongoing basis to determine if any changes are necessary based upon various factors, including, but
not limited to, investment performance, fund manager tenure, style drift, account
additions/withdrawals, and/or a change in the client’s investment objective. Based upon these
factors, there may be extended periods of time when AFG determines that changes to a client’s
portfolio are neither necessary nor prudent. AFG’s investment advisory fee, as described at Item
5 below, remains payable during periods of account inactivity. Of course, as indicated below, there
can be no assurance that investment decisions made by AFG will be profitable or equal any specific
performance level(s).
ByAllAccounts and eMoney Advisor Platform. Via its PlanFirst tool, and/or the online platform
hosted by “eMoney Advisor” (“eMoney”), AFG may also provide access to account aggregation
services, which can incorporate all of the client’s investment assets, including those investment
assets that are not part of the assets that we manage (the “Excluded Assets”). AFG does not provide
investment management, monitoring, or implementation services for the Excluded Assets. Unless
otherwise specifically agreed to, in writing, AFG’s service relative to the Excluded Assets is
limited to reporting only. Therefore, AFG shall not be responsible for the investment performance
of the Excluded Assets. Rather, the client and/or their advisor(s) that maintain management
authority for the Excluded Assets, and not AFG, shall be exclusively responsible for such
investment performance. Without limiting the above, AFG shall not be responsible for any
implementation error (timing, trading, etc.) relative to the Excluded Assets. The client may choose
to engage AFG to manage some or all of the Excluded Assets pursuant to the terms and conditions
of an Investment Advisory Agreement between AFG and the client.
Cash Sweep Accounts. Account custodians generally require that cash proceeds from account
transactions or cash deposits be swept into and/or initially maintained in the custodian’s sweep
account. The yield on the sweep account is generally lower than those available in money market
accounts. To help mitigate this issue, AFG shall generally purchase a higher yielding money
market fund available on the custodian’s platform with cash proceeds or deposits, unless AFG
reasonably anticipates that it will utilize the cash proceeds during the subsequent 30-day period to
purchase additional investments for the client’s account. Exceptions and/or modifications can and
will occur with respect to all or a portion of the cash balances for various reasons, including, but
not limited to, the amount of dispersion between the sweep account and a money market fund, the
size of the cash balance, an indication from the client of an imminent need for such cash, or the
client has a demonstrated history of writing checks from the account.
Please Note: The above does not apply to the cash component maintained within AFG’s actively
managed investment strategy (the cash balances for which shall generally remain in the custodian
designated cash sweep account), an indication from the client of a need for access to such cash,
assets allocated to an unaffiliated investment manager, and cash balances maintained for fee
billing purposes. Please Also Note: The client shall remain exclusively responsible for yield
dispersion/cash balance decisions and corresponding transactions for cash balances maintained in
any of AFG’s unmanaged accounts.
Cybersecurity Risk. The information technology systems and networks that AFG and its third-
party service providers use to provide services to AFG’s clients employ various controls, which
are designed to prevent cybersecurity incidents stemming from intentional or unintentional actions
that could cause significant interruptions in AFG’s operations and result in the unauthorized
acquisition or use of clients’ confidential or non-public personal information. Clients and AFG 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 AFG has established its processes to reduce the risk of
cybersecurity incidents, there is no guarantee that these efforts will always be successful,
especially considering that AFG 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.
Cross Transactions. In limited circumstances, when determined to be in the best interest of its
clients, AFG may engage in a cross-transaction pursuant to which AFG may effect transactions
between two of its managed client accounts (i.e., arranging for the clients’ securities trades by
“crossing” these trades when AFG believes that such transactions [generally, thinly traded bonds]
are beneficial to its clients). This may present a conflict of interest. For all such transactions,
neither AFG nor any affiliate will be acting as a broker. Additionally. AFG will not receive any
commission or transaction-based compensation although AFG has an interest in the price at which
the cross trades are conducted since AFG’s asset-based fees will be negatively impacted by lower
bond values. These transactions will be effected through Fidelity, Fidelity will determine the price
of the cross transactions and Fidelity will charge the client a transaction fee for the cross
transactions. The client may revoke AFG’s cross-transaction authority at any time upon written
notice to AFG. AFG’s Chief Compliance Officer, Mary E. McCraw, remains available to
address any questions that a client or prospective client may have regarding the above.
Cash Positions. AFG continues to treat cash as an asset class. As such, unless determined to the
contrary by AFG, all cash positions (money markets, etc.) shall continue to be included as part of
assets under management for purposes of calculating AFG’s advisory fee. At any specific point in
time, depending upon perceived or anticipated market conditions/events (there being no
guarantee that such anticipated market conditions/events will occur), AFG may maintain cash
positions for defensive purposes. In addition, while assets are maintained in cash, such amounts
could miss market advances. Depending upon current yields, at any point in time, AFG’s advisory
fee could exceed the interest paid by the client’s money market fund. AFG’s Chief Compliance
Officer, Mary E. McCraw, remains available to address any questions that a client or
prospective may have regarding the above fee billing practice.
Client Obligations. In performing its services, AFG shall not be required to verify any information
received from the client or from the client’s other professionals and is expressly authorized to rely
thereon. Clients are advised that it remains their responsibility to promptly notify AFG if there is
ever any change in their financial situation or investment objectives for the purpose of reviewing
and evaluating, and if necessary, revising its previous recommendations or services.
Disclosure Brochure. A copy of AFG’s written Privacy Notice, written Disclosure Brochure as
set forth in this Part 2A and 2B of Form ADV and Form CRS (Client Relationship Summary) shall
be provided to each client prior to, or contemporaneously with, the execution of a wealth
management agreement.
C. AFG tailors its advisory services to the individual needs of clients. AFG consults with clients
initially and on an ongoing basis to develop and maintain an Investment Policy Statement based
upon the client’s investment objective, goals, risk tolerance, and time horizon.
D. AFG does not participate in a wrap program.
E. AFG managed $755,112,171 in assets on a discretionary basis as of December 31, 2023.