The Darrow Company, Inc. d/b/a Darrow Wealth Management ("DWM") is a fee-only wealth management and investment advisory firm that has operated since September 1987. DWM manages assets by employing financial strategies based on each client's individual and unique requirements.
DWM provides financial modeling, consulting, and investment management services. DWM's primary office is in Needham, Massachusetts, but it also maintains offices in Boston, Massachusetts. DWM is owned by Kristin McKenna.
As of December 31, 2023, we provide continuous management services for $245,506,410 in client assets managed on a discretionary basis. We also manage $20,516,427 in client assets on a non- continuous basis, which is commonly referred to as "assets under advisement." Prior to engaging DWM to provide any of the foregoing investment advisory services, the client is required to enter into one or more written agreements with DWM setting forth the terms and conditions under which DWM renders its services (collectively the "Agreement").
This disclosure brochure describes the business of DWM. Certain sections will also describe the activities of Supervised Persons. Supervised Persons are any of DWM's officers, partners, directors or employees, or any other person who provides investment advice on DWM's behalf and is subject to DWM's supervision or control.
Investment Management Services DWM provides its investment management services principally through its Darrow Money Management program. Under this program, investment management services are based on a client's risk profile and unique set of financial goals and objectives, DWM assists its clients in determining an appropriate investment objective used to manage the client's financial assets. DWM creates for its clients a personal investment portfolio of carefully selected mutual funds and ETFs selected to meet their elected investment objectives. The client's asset allocation is determined based on the client's investment objectives and goals. DWM 's investment management process includes: creating a diversified portfolio that reflects a client's risk and return profile; monitoring portfolios to enable DWM to make changes as needed to accommodate new requirements, new strategies, or new interests; and maintaining a responsive investment program sensitive to a client's needs as they evolve, rebalancing a portfolio and modifying risk as circumstances warrant. DWM imposes a $2,000,000 household asset minimum for Darrow Money Management Services. DWM, in its sole discretion, may accept or retain clients with a smaller portfolio for various reasons as listed under the minimum account size section of this document.
Clients can engage DWM to manage all or a portion of their assets on a discretionary basis. If you participate in our discretionary investment management services, we require that you grant our firm discretionary authority to manage your account. Discretionary authorization allows us to determine the specific securities, and the amount of those securities, to be purchased or sold for your account without your prior approval. Discretionary authority is typically granted by the Agreement you sign with our firm and execution of the appropriate trading authorization forms through your account custodian.
DWM primarily allocates clients' investment management assets among low-cost exchange-traded funds (ETFs) and select mutual funds in accordance with the investment objectives of the client. From time to time depending on a client's individual financial situation, DWM also allocates clients' investment management assets among certificates of deposit and other securities. DWM may also provide advice about any type of investment held in clients' portfolios.
DWM tailors its advisory services to the individual needs of clients. DWM consults with clients initially and on an ongoing basis to determine risk tolerance, time horizon and other factors that may impact the clients' investment needs. DWM ensures that clients ' investments are suitable for their investment needs, goals, objectives, and risk tolerance. Depending on a client's unique financial situation and holdings, the client may request, or DWM may advise, various options strategies to help the client reach their objectives. Options can offer additional income, protection, or leverage, depending on the strategy. Please refer below to Item 8 Methods of Analysis, Investment Strategies and Risk of Loss regarding option strategies for additional information on their risk.
Clients are advised to promptly notify DWM if there are changes in their financial situation or investment objectives or if they wish to impose any reasonable restrictions upon DWM's management services. Clients may impose reasonable restrictions or mandates on the management of their account if, in DWM's sole discretion, the conditions will not materially impact the performance of a portfolio strategy or prove overly burdensome to its management efforts.
Private Wealth Management Those clients who meet the minimum annual Management fee of $5,000 per year under the Darrow Money Management Program are eligible to participate in DWM's Private Wealth Management program. DWM offers those clients a limited range of ongoing financial planning and advisory support, including periodic review meetings where we will review your current financial situation, such as your employment and cash flow needs to see how these changes may impact your financial picture and our previous recommendations. Along the way, we may provide the following types of services as it may pertain to the client:
• Retirement planning strategies.
• Development of a savings plan for goals and/or major purchases.
• Reviewing changes to executive compensation and investment strategies.
• Education savings strategies.
• Discussions on retirement income strategies and potential tax implications. Should the client request a comprehensive financial model, the client would need to execute a separate agreement and would be charged a separate fee for this service. DWM may, at its discretion, waive the separate fee for this service.
Advisory, Consulting and Support Services ("ACS") DWM may provide to its clients under

separate agreement the following advisory, consulting and support ("ACS") services:
•Financial Modeling Services: include a Financial Model showing Cash Flow Projections, a Net Worth Statement, and Monte Carlo analysis. Specific components of the Model will depend on your situation and goals, but may include alternate scenarios (what-if analysis), business, college, and retirement planning, equity compensation analysis and multi-year diversification plan, alternative investment objectives, major purchase(s), longevity, life insurance, etc.
•Divorce Consulting Services: include such discussions around asset division, assessing your cash flow needs, an analysis of your income sources and expenses, reviewing your entire portfolio of financial assets, such as retirement and investment accounts, cash, private equity, trusts, real estate, and business interests, to identify which may be most favorable for you to retain during the division of assets, and so on.
•Estate Settlement Services: involve the preparation and processing of various custodial paperwork needed for the retitling and distribution of estate assets according to the decedent's estate plan at the direction of the client's attorney/estate.
•Discovery Support Services: involve the gathering of financial documentation and correspondence necessary for case litigation (QDRO prep, inheritance litigation, etc.). In performing ACS services, DWM is not required to verify any information received from the client or from the client's other professionals (e.g., attorney, accountant, etc.) and is expressly authorized to rely on such information as provided by the client. DWM may recommend the services of itself and/or other professionals for the implementation of its financial planning/investment recommendations. Clients are advised that a conflict of interest exists if DWM recommends its own services. The client retains absolute discretion over all such implementation decisions and is free to accept or reject any of DWM's recommendations. Clients are advised that it remains their responsibility to promptly notify DWM if there is ever any change in their financial situation or investment objectives for the purpose of reviewing, evaluating, or revising DWM's previous recommendations and /or services.
Retirement Plan and Pension Consulting Services DWM offers pension consulting services to employee benefit plans and their fiduciaries based upon the needs of the plan and the services requested by the plan sponsor or named fiduciary. In general, these services may include an existing plan review and analysis, plan-level advice regarding fund selection and investment options, education services to plan participants, investment performance monitoring, and/or ongoing consulting. These pension consulting services will generally be non- discretionary and advisory in nature. The ultimate decision to act on behalf of the plan shall remain with the plan sponsor or other named fiduciary.
We may also assist with participant enrollment meetings and provide investment-related educational seminars to plan participants on such topics as:
•Diversification;
•Asset allocation;
•Risk tolerance; and
•Time horizon Our educational seminars may include other investment-related topics specific to the particular plan.
We may also provide additional types of pension consulting services to plans on an individually negotiated basis. All services, whether discussed above or customized for the plan based upon requirements from the plan fiduciaries (which may include additional plan-level or participant-level services) shall be detailed in a written agreement and be consistent with the parameters set forth in the plan documents.
Either party to the pension consulting agreement may terminate the agreement upon written notice to the other party in accordance with the terms of the agreement for services. The pension consulting fees will be prorated for the quarter in which the termination notice is given and any unearned fees will be refunded to the client.
Rendering Investment Advice for Retirement Accounts Effective December 20, 2021, (or such later date as the US Department of Labor ("DOL") Field Assistance Bulletin 2018-02 ceases to be in effect), for purposes of complying with the DOL's Prohibited Transaction Exemption 2020-02 ("PTE 2020-02") where applicable, we are providing the following acknowledgment to you.
When DWM provides 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 interest ahead of yours. Under this special rule's provisions, we must:
•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. DWM benefits financially from the rollover of your assets from a retirement account to an account that DWM manages or provides investment advice on, as rollover assets increase our assets under management and, in turn, our advisory fees. As a fiduciary, DWM only recommends a rollover when DWM believes it is in your best interest.
As disclosed in the Advisory Agreement, certain of the foregoing services are provided by DWM as a fiduciary under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). In accordance with ERISA Section 408(b)(2), each plan sponsor is provided with a written description of DWM 's fiduciary status, the specific services to be rendered and all direct and indirect compensation the Firm reasonably expects under the engagement.