Strategic Financial Services, Inc., which you'll hear us refer to as Strategic (or simply "we," "us," or "our"), is a registered investment advisor with the U.S. Securities and Exchange Commission. Since opening our doors in 1979, we're proud to say we're 100% employee owned. We offer personalized planning and advisory services for individuals, families, institutions, corporations and employer retirement plans, all tailored to meet your specific needs. Wealth Management Services Strategic Gold and Platinum Programs In our Strategic Gold and Platinum tiers, we provide comprehensive financial planning and investment management services. This program is tailored for clients who have at least $500,000 in investable assets. However, we're flexible and may make exceptions on a case-by-case basis. Our financial planning is tailored to match your individual needs and ambitions. From the get-go, we'll have conversations to understand your great life, financial stituation, commitments, and how you feel about risk. We'll develop an initial plan that makes sure your financial setup mirrors your values and life aspirations. This includes recommending an investment strategy through our in-house services and potentially advising you to consult with other professionals like attorneys or accountants, who may charge their own fees. This plan is dynamic, adapting as your life, goals, or circumstances evolve. Whether we discuss changes in person or provide updates in writing, your plan is designed to grow with you. Here's a closer look at the areas we cover:
• Finances: We help with budgeting and saving to build your future, ensuring your finances are streamlined and growth-oriented.
• Investments: Focused on managing risk and implementing strategies that match your goals.
• Estate: We work to protect your family and assets, ensuring peace of mind for the future.
• Insurance: Covering you against life's unexpected turns, providing security when you need it most.
• Retirement: Our goal is to guide you towards financial independence through personalized retirement planning, acknowledging the uncertainties of financial markets and life changes .

• Education: We support your efforts to fund education by exploring savings and financing strategies, aiming to make educational aspirations more achievable within the context of your financial landscape.
• Navigating Life Events: Life events often drive the need for financial planning. Whether it's a marriage, the birth of a child, a career change, or retirement, we're here to help you navigate these important milestones, ensuring your financial plan evolves with you. For our Gold and Platinum clients, your investment portfolios are not only tailored to your unique financial situation but are also grounded in our model-based strategies. These models are the foundation upon which we build, allowing us to leverage a wide range of investment vehicles tailored to meet your needs. This approach ensures a balance between personalization and the effectiveness of model portfolios, taking into account your risk tolerance, financial goals, and tax considerations. Here's how we approach investment management for Gold and Platinum tiers:
• Model-Based Customized Strategies: While your portfolio benefits from the personalized attention of our investment team, it is primarily based on our model portfolios. This ensures a consistent and strategic approach, aligning with your specific financial objectives. Your investments might mirror those in similar profiles, optimizing for a strategic fit that reflects your unique circumstances.
• Personal Investment Preferences: Recognizing you may have specific investment preferences or the desire to retain certain assets, we aim to accommodate these within the context of our model strategies. It’s important to communicate any such preferences to us. Although accommodating specific requests might impact the alignment and performance of your portfolio, we're committed to finding solutions that respect your wishes while maintaining strategic integrity.
• Navigating Brokerage Practices: For insight into how we address potential conflicts of interest and manage the intricacies of model portfolio management, please see Item 12 - Brokerage Practices. Our service for Gold and Platinum tiers primarily offers discretionary management, allowing us to dynamically adjust your portfolio in response to market conditions and opportunities. For clients interested in a more hands-on approach, we provide the option for non-discretionary accounts, where you direct trading decisions, tailored to suit your specific requirements. These requests are managed on a case-by-case basis. Considerations include expected trade volume and the size of the relationship. Strategic Blue Program The Strategic Blue Program caters to individuals with investable assets under $500,000, providing a planning and investment management approach that emphasizes planning and guidance at your request, offering tools and advice to empower you in effectively managing your assets In the Blue Program, we stand ready to assist you with a broad array of financial planning services. While we actively support these services, the engagement in specific areas is largely initiated by you, the client, based on your evolving needs and our regular communications about various planning topics. These communications are designed to inform and empower you, potentially sparking the desire for deeper exploration of certain services. Here's how we can assist, upon your request:
• Retirement: We're here to help guide you in creating a comprehensive plan for a secure retirement, so that you can navigate the roadmap to your future.
• Education: We offer strategies and tools for managing current education expenses and loan payments, while supporting your journey towards future educational planning goals.
• Insurance: With the goal of ensuring you and your loved ones are protected, we'll help you analyze your current coverage and suggest adjustments as needed.
• Estate: We guide you in organizing your estate documents, ensuring your assets and family are safeguarded according to your wishes.
• Access to Professional Services: For those moments when you need specialized advice, we connect you with our network of preferred accountants and attorneys.
• Budgeting and Debt Management: Upon your request, we provide insights and strategies for managing your finances more effectively. Additionally, through our Strategic Blue Program, you gain access to self-guided planning tools, a Financial Welness Program, workflows, and checklists. These resources are designed not just to enhance your financial understanding but to encourage proactive engagement with your financial planning process, at your pace and based on your interests. For the Blue Program, we tailor your investment strategy to match your unique financial situation, using exchange trades funds (ETFs) and our model-based strategies. This approach is based on our understanding of your risk tolerance, investment timeline, and tax implications to help ensure your portfolio supports your financial goals. Here’s our investment management approach in the Blue Program:
• Model Strategies: We manage your assets using model strategies, which means your investments may be similar to those in other accounts. This method helps us efficiently manage portfolios while striving to achieve your individual investment objectives.
• Investment Restrictions: If you have preferences, such as holding onto certain investments, please communicate them to us. Although we try to accommodate such requests, they might affect the portfolio's alignment and performance. If you wish to retain specific securities, we might suggest relocating them to an appropriate account to maintain your strategy's effectiveness. It's essential that you share any investment restrictions with us. We will carefully review each request and, if necessary, propose alternatives.
• Understanding Potential Conflicts: For details on how we address potential conflicts in our model portfolio management, we encourage you to refer to Item 12 - Brokerage Practices. Our primary mode of investment management in the Blue Program is discretionary, where we make investment decisions on your behalf. This allows us to manage your portfolio proactively, ensuring that we can adapt to market conditions and seize opportunities for your benefit. Institutional Services For our institutional clients, including not-for-profit organizations, businesses, and endowments, we provide specialized advisory services tailored to meet the unique needs and goals of each institution. Our comprehensive service model includes:
• Reviewing Your Mission and Objectives: We start by understanding your organization's core mission and goals to ensure our services align with your vision.
• Setting Investment Policy Statements: We help you develop clear investment policy statements that guide your investment strategies and objectives.
• Investment Portfolio Management: While your portfolio benefits from the personalized attention of our investment team, it is primarily based on our model portfolios. This ensures a consistent and strategic approach, aligning with your specific financial objectives. Your investments might mirror those in similar profiles, optimizing for a strategic fit that reflects your unique circumstances.
• Fiduciary Oversight and Education: Providing guidance and education on fiduciary responsibilities to ensure your organization is well-equipped to manage its investments responsibly. In employing model allocation strategies, we aim for efficiency and strategic coherence across portfolios, recognizing the need for flexibility:
• Investment Restrictions: We accommodate institutional requests for specific portfolio restrictions or preferences, understanding these may necessitate deviations from our standard strategies. Should you wish to retain particular securities or impose investment limits, we’re prepared to adapt, possibly by segregating these assets to preserve the integrity of your overall investment approach.
• Communication of Restrictions: Clear communication of any investment restrictions is imperative. Our team diligently reviews each request, and, in instances where accommodating a specific restriction isn’t feasible, we will engage with you to seek out viable alternatives. For detailed information on how we manage potential conflicts of interest in our model portfolio management, we encourage you to refer to Item 12 - Brokerage Practices. Employer Retirement Plan Services (ERPS) We provide comprehensive investment advisory services tailored to employer-sponsored retirement plans, focusing on three key areas: employee services, plan sponsor services, and investment management. Employers have the flexibility to choose the specific services that best meet their needs. Employee Services Our offerings aim to enhance plan participation and financial literacy among employees through:
• Plan Enrollment Meetings: Helping employees sign up and understand their retirement plan.
• One-on-One Meetings/Calls: Personalized sessions to educate participants on plan options and investment basics.
• Group Education Meetings: Sessions designed to inform participants about their plan options, investment concepts, and more. Plan Sponsor Services We support plan sponsors with services that enhance plan design and operation:
• Plan Design and Communications: Assisting in creating a retirement plan that meets the organization's goals.
• Plan Service Provider Search: Helping find the best providers for your plan's needs.
• General Plan Reviews: Evaluating your plan's costs, investments, cash flow, and demographics to ensure efficiency.
• Plan Operations and Administrative Assistance: Offering support for the smooth operation of your retirement plan. Investment Management Services Our investment management services are tailored to each plan's needs, including:
• Acting as a 3(38) Advisor: We take on fiduciary responsibility for selecting, monitoring, and replacing investment options, focusing solely on those chosen by Strategic.
• Acting as a 3(21) Advisor: We provide guidance on investment options without assuming fiduciary responsibility, leaving final investment decisions to the plan sponsor/trustee. Additionally, we can offer participant-directed accounts access to Asset Allocation Model Portfolios, designed to suit various investment strategies based on time horizon and risk tolerance. These models are available where supported by the plan recordkeeper and are managed and rebalanced according to model goals, not individual participant needs. For details on how we handle potential conflicts in our model portfolio management, please see Item 12 - Brokerage Practices. We recommend specific plan providers and platforms to employers, though the choice ultimately rests with the plan sponsor. However, our ability to work with certain plans may depend on the chosen platform. We do offer a Pooled Employer Plan (PEP) program that allows individual qualified retirement plans to pool assets together in the same retirement plan. Advisor Trust acts as the PEP’s Pooled Plan Provider (PPP). Strategic acts as ERISA 3(38) investment fiduciary. Strategic, as the PEP’s 3(38) investment fiduciary, provides the following services:
• Develop and adopt an Investment Policy Statement appropriate for the PEP.
• Investment menu construction and oversight.
• A discretionary asset management program for plan participants.
• PEP oversight and compliance. We do not have a stated account or relationship minimum that an ERPS client must satisfy. However, before providing these services Strategic will evaluate each relationship to make sure that it is a good fit for both the client and Strategic. Total Assets Under Management As of December 31, 2023, discretionary assets under management totaled $1,827,831,538 and non-discretionary assets totaled $136,540,012. Miscellaneous Additions Limitation of Financial planning and Non-Investment Counseling: Strategic offers financial planning and counseling on non-investment-related matters, such as estate planning, insurance, and tax planning, only when specifically requested by the client. It's crucial to understand that Strategic does not act as an attorney, insurance agent, or accountant. Accordingly, our services should not be seen as legal, insurance, or accounting advice. We do not prepare estate documents or tax returns. Here are key points to note:
• Referrals to Other Professionals: For services outside our expertise, we may refer clients to other professionals. The decision to engage any recommended professional remains entirely with the client.
• Fees for Non-Investment Services: Engaging services of professionals we recommend may incur fees separate from those charged by Strategic.
• Liability and Disputes: In the event of a dispute with a professional recommended by Strategic but not affiliated with us, the client agrees to seek resolution directly from the engaged professional, excluding Strategic from any recourse. 529 College Savings Plan: As part of creating a financial plan, Strategic might suggest setting up a 529 college savings plan for education savings. Here's how we approach this recommendation:
• Direct or Consumer Plans:

We prefer to recommend "direct or consumer" 529 plans that do not pay advisor commissions, focusing on plans that are most beneficial to the client without additional costs.
• State Tax Benefits: If there's a tax advantage for you, we'll suggest opening the plan in your state of legal residence to capitalize on those benefits.
• Alternative Options: In cases where your state doesn't offer a tax benefit for a 529 plan, we might recommend the New York State 529 program as an alternative.
• Authority Level: Our role in managing the 529 plan can vary. Depending on the specific state-sponsored plan and your preferences, our authority might range from having no involvement to holding a limited power of attorney. This variance affects whether we directly manage the account's allocations or provide you with recommendations for you to implement.
• Client Agreement: You'll be asked to sign a form specifying the level of authority you're comfortable granting Strategic in managing the 529 plan account. Annuities: Strategic offers services and solutions tailored to your annuity accounts. If you bring in existing annuity accounts as you transition your assets to us, we'll collaborate with our partners to assess the best course of action for these accounts. This includes a thorough review of factors such as surrender charges, potential capital gains, ongoing costs, and the current benefits of your annuity. Depending on the specific details of your situation, our recommendations may include:
• Liquidating the annuity to transfer funds into a brokerage account, aiming to streamline and possibly enhance your investment strategy.
• Moving to a fee-based annuity through one of our partners, which may offer more favorable terms or lower costs.
• Keeping the existing annuity but updating the agent of record to an agent from DPL Financial Partners, ensuring you continue to receive specialized support and advice. For each of these options, we aim to provide you with a solution that aligns with your financial goals and the particulars of your annuity account For cash management solutions, Strategic provides recommendations tailored to your needs, particularly when you hold significant cash amounts that exceed FDIC insurance limits in a single account. We partner with various firms to offer cash management solutions designed for investment advisory clients. It's important to be aware that Strategic may charge a fee on these assets, which will be fully disclosed to you and is determined at our discretion. Additionally, the service provider offering the cash management solution may also have their own fees. Strategic is a member of the DPL Financial Partners network, for which we pay a membership fee. Being part of this network gives us access to a variety of commission-free insurance and annuity products. It's important for you to know that when we suggest you buy an insurance or annuity product through DPL or move an existing annuity product to them, Strategic does not receive any compensation from DPL for making these recommendations. However, there are situations where Strategic may apply an Assets Under Management (AUM) fee to an annuity product, specifically when it's considered a fee-based annuity. While DPL does earn compensation based on the sale of products, our relationship with them is focused on providing you with access to commission-free options that best suit your financial needs. We do not exclusively use DPL for insurance and annuity product recommendations. As part of our investment advisory services, we offer guidance on withdrawing assets from an employer's retirement plan, including the possibility of rolling these assets into an individual retirement account (IRA) that Strategic manages. Choosing to roll over assets to an IRA managed by us will incur an asset-based fee as detailed in the agreement you sign with our firm. It's important to recognize this creates a conflict of interest, as our advisors have an incentive to recommend rollovers to generate fees, rather than solely basing this advice on your individual needs. However, you are not contractually obligated to proceed with the rollover, nor are you required to have your IRA managed by us. You generally have four options regarding employer retirement plan assets: 1. Leave the funds in the employer's (or former employer's) plan. 2. Transfer the funds to a new employer’s retirement plan. 3. Opt for a taxable distribution by cashing out. 4. Roll the funds into an IRA. Before making any changes, we recommend consulting with your CPA and/or tax attorney, as each option has its own set of benefits and drawbacks. If you are considering rolling over your retirement funds to an IRA for us to manage, here are a few points to consider before you do so:
• Determine whether the investment options in your employer's retirement plan address your needs or whether you might want to consider other types of investments.
• Employer retirement plans generally have a more limited investment menu than IRAs.
• Employer retirement plans may have unique investment options not available to the public such as employer securities, or previously closed funds. o Your current plan may have lower fees than our fees.
• If you are interested in investing only in mutual funds, you should understand the cost structure of the share classes available in your employer's retirement plan and how the costs of those share classes compare with those available in an IRA.
• You should understand the various products and services you might take advantage of at an IRA provider and the potential costs of those products and services. o Our strategy may have a higher risk than the option(s) provided to you in your plan. o Your current plan may also offer financial advice. o If you keep your assets titled in a 401k or retirement account, you could potentially delay your required minimum distribution beyond age 72. o Your 401k may offer more liability protection than a rollover IRA; each state may vary.
• Generally, federal law protects assets in qualified plans from creditors. Since 2005, IRA assets have been, in most cases, protected from creditors in bankruptcies. However, there can be some exceptions to the general rules, so you should consult with an attorney if you are concerned about protecting your retirement plan assets from creditors.
• You may be able to take out a loan on your 401k, but not from an IRA.
• IRA assets can be accessed any time; however, distributions are subject to ordinary income tax and may also be subject to a 10% early distribution penalty unless they qualify for an exception such as disability, higher education expenses, or the purchase of a home.
• If you own company stock in your plan, you may be able to liquidate those shares at a lower capital gains tax rate.
• Your plan may allow you to hire us as the manager and keep the assets titled in the plan name. Participants in retirement plans we manage have the option to transfer assets from an existing IRA Rollover or a previous employer’s retirement plan into the plan we oversee. Whether you can do this depends on the specific rules outlined in the plan document. If you decide to move assets into a plan we manage, those assets will incur the plan's fees, including any management fee we charge, as detailed in the agreement you have with our firm. This situation could lead to a conflict of interest because our advisors might have a financial incentive to suggest rolling assets into the plan to generate fee-based income, rather than focusing solely on what’s best for you. It’s important to remember that you're not obligated to proceed with the rollover. When advising wealth management clients or prospective clients, we employ a software tool to compare the costs, services, and suitability of their current situation against our proposed recommendation. This analysis provides clarity and helps clients make informed decisions. We request clients to review and sign a copy of this analysis. For participants in retirement plans we manage, we typically do not make specific recommendations. Instead, we offer general education on the pros and cons of various options available to them. This approach ensures participants have the knowledge needed to make informed decisions regarding their retirement assets. Client Obligations: It's important for you to promptly notify us if there are any changes in your financial situation or investment objectives. This allows us to review and potentially revise our previous recommendations and services to better suit your evolving needs and goals. Acting for Multiple Clients: Each client should be aware that we perform advisory services for various other clients. This relationship, in general, creates a conflict of interest when we render our services to several clients. A conflict could arise when we invest one or more clients in different instruments or classes of securities of the same issuer. For example, some clients may own the common stock of Company XYZ, and different clients may own bonds issued by Company XYZ. In the event of bankruptcy, we would be representing each client’s interests, and the client’s ability to recoup their investment may vary significantly based on where their investment falls within the issuers’ capital structure. During an issuer bankruptcy, the investors who take the least risk are paid first. For example, secured creditors take less risk because the credit they extend is usually backed by collateral, such as a mortgage or other company assets. They know they will get paid first if the company declares bankruptcy. Bondholders have a greater potential for recovering their losses than stockholders because bonds represent the company's debt, and the company has agreed to pay bondholders interest and return their principal. Stockholders own the company and take a greater risk. They could make more money if the company does well, but they could lose money if the company does poorly. The owners are last in line to be repaid if the company fails. Bankruptcy laws determine the order of payment. Digital Planning and Aggregation Platforms: As part of our Wealth Management services, we may provide you with access to an online platform designed to facilitate financial planning and aggregation of accounts. This platform enables you to update your information and explore various "what-if" scenarios to gauge the potential impact on your financial goals. It's important to note that the outputs generated by these platforms should not be considered as advice or recommendations from us. We cannot be held accountable for any adverse outcomes resulting from your engagement in financial planning activities or utilizing other functions available on the platform without our guidance. Additionally, the online platform allows you to aggregate accounts that are not under our management, providing you with a comprehensive view of your financial situation. However, Strategic bears no responsibility for overseeing or managing the investment performance of these external accounts. Borrowing Against Assets: If you have a need to borrow money, Strategic offers two internal options:
• Margin – The account custodian or broker-dealer lends money to the client. The custodian charges the client interest for the right to borrow money, and uses the assets in the client’s account as collateral.
• Pledged Asset Loan – In consideration for a lender to make a loan to the client, the client pledges its investment assets held at the account custodian as collateral. These kinds of loans can help clients who have a home purchase in progress, allow the repayment of more costly debt, or let them borrow without having to sell their existing account positions and pay capital gain taxes. However, these loans also have significant potential risk for the client’s investment assets. The lender can claim the client’s investment assets if the loan is not paid back or if the assets drop below a certain level. There is also a conflict of interest when a client uses a Pledged Asset Loan, because by choosing the loan instead of taking out the money from their account, Strategic continues to charge a fee on those assets. For margin accounts, we bill on the net value of the account. Charles Schwab Institutional Intelligent Portfolios: For a small group of clients, we offer an automated investment program (the “Program”) through which clients are invested in a range of investment strategies we have constructed and manage, each consisting of a portfolio of exchange-traded funds (“Funds”) and a cash allocation. Clients do not have the ability to place restrictions on the funds and models selected. The client’s portfolio is held in a brokerage account opened by the client at Charles Schwab & Co., Inc. (“CS&Co.”). We use the Institutional Intelligent Portfolios® platform (“Platform”), offered by Schwab Performance Technologies (“SPT”), a software provider to independent investment advisors and an affiliate of CS&Co., to operate the Program. We are independent of and not owned by, affiliated with, or sponsored or supervised by SPT, CS&Co., or their affiliates (together, “Schwab”). Strategic, and not Schwab, are the client’s investment advisor and primary point of contact with respect to the Program. We are solely responsible, and Schwab is not responsible for determining the program's appropriateness, choosing a suitable investment strategy and portfolio for the client’s investment needs and goals, and managing that portfolio on an ongoing basis. We have contracted with SPT to provide us with the Platform, which consists of technology and related trading and account management services for the Program. The Platform enables us to make the Program available to clients online and includes a system that automates certain key parts of our investment process (the “System”). The System includes an online questionnaire that can help us determine the client’s investment objectives and risk tolerance and select an appropriate investment strategy and portfolio. Clients should note that the System will automatically recommend a portfolio in response to the client’s answers to the online questionnaire. However, Strategic, working with the client, will make the final decision and select a portfolio based on our review of the client’s financial situation, investment objectives, and risk tolerance. The System also includes an automated investment engine through which we manage the client’s portfolio on an ongoing basis through automatic rebalancing and tax-loss harvesting (if the client is eligible and elects). Clients do not pay SPT fees in connection with the program. However, Strategic will charge the client a fee for its advisory services, as described in the section titled Fees and Compensation. Clients do not pay brokerage commissions or any other fees to Schwab as part of the Program. However. Schwab does receive revenue in connection with the program as described in the Program Disclosure Brochure. Strategic does not pay SPT fees for the Platform so long as we maintain $100 million in client assets in accounts at Schwab that are not enrolled in the Program. If we do not meet this condition, then we pay SPT an annual licensing fee of 0.10% (10 basis points) on the value of our client assets in the Program. This fee arrangement gives us an incentive to recommend or require that our clients with accounts not enrolled in the Program be maintained with CS&Co. This conflict is mitigated by the relatively low level of assets required to be maintained with CS&Co. While we maintain active accounts on this platform, we are not actively opening new accounts on the platform.