Description of Firm James Reed Financial Services, Inc., d/b/a Reed Financial Services, Inc. ("RFS," "Firm", "we," "our," and "us"), is an Ohio corporation headquartered in Cleveland, Ohio. We have been providing investment advisory services since December 1, 1986. We are owned by James M. Reed, Amanda E. Lisachenko, Janet S. Edwards and Evan Watson; Ms. Lisachenko is principal owner.
This Brochure provides important information about RFS, its programs and services, compensation and costs of participating in its programs, and other important information Clients should consider. In reading this Brochure, keep in mind that a number of separate businesses provide the investment products and services described in this Brochure. RFS's investment adviser representatives ("Representatives") are associated as registered representatives of an independent broker-dealer, APW Capital, Inc. ("APW"), and are also licensed insurance agents appointed by various independent insurance companies. Clients sometimes choose to purchase non-advisory brokerage or insurance products through their Representative, as discussed in Item 10; however, there is no obligation to purchase any such brokerage or insurance product. RFS is not affiliated with APW or any insurance company; however, RFS is registered as an insurance agency. Purchases of non-advisory products represent only a small percentage, less than 10%, of the overall business of RFS and its Representatives; our core business focuses on our investment management and planning services described below.
Clients who have questions about our services or this Brochure should contact their Representative at the email address, telephone number, or street address shown on the cover of this Brochure or on the Brochure Supplement provided by the Representative. You can reach our senior management, including our Chief Compliance Officer, by telephone at (216) 464-2090, by email at [email protected], or by mail at the address shown on the front of this Brochure.
About Our Firm At Reed Financial Services, Inc., we follow a team approach to Client service so that at least three people know you and your unique needs. Having you feel known, offering a high level of service with quick response, providing long-term continuity — these are important goals.
Our Representatives have primary responsibility to learn and understand your unique needs and goals, to develop a financial plan to meet those needs, to answer any questions, and to keep your plan on track. Other team members help to implement and monitor the plan, freeing the Representative allowing him or her to focus primarily on the Client. For example, members of our Investment Committee focuses on developing and managing our model portfolios used in our Investment Management Program on an ongoing basis. Our Services We offer the following investment solutions to help meet the needs of our clients:
•Investment Management Program
•Financial Planning Services
•Consulting Services 4 Please note the information provided below is necessarily general and does not address all details of RFS's programs and services. Because many aspects of a client's relationship with us are negotiable, clients should always refer to their individual investment management agreement ("Agreement") for terms that apply specifically to them.
Investment Management Program In the Investment Management Program ("IM Program" or simply, the "Program"), RFS offers Clients a fully discretionary managed account solution based on core model portfolios. Our Investment Committee develops our model portfolios from mutual funds and exchange-traded funds ("ETFs") that are carefully allocated across equity, fixed income, and cash asset classes. Clients who own variable annuities may have variable annuities in their account; however, the purchase of a variable annuity is not a requirement of our Program.
For many clients, RFS is able to meet their investment needs through one of our core model portfolios.
For clients with more complex investment needs, RFS is able to develop portfolios comprised of a broader range of securities and asset classes, including individual stocks and bonds, or other classes of securities. However, where possible and consistent with the needs of the client, we will tend to use mutual funds or ETFs to broaden a portfolio's exposure to additional asset classes or to expand style or capitalization holdings; Clients should not expect these additional types of securities in their portfolio unless they discuss them with us in advance. The securities about which we offer advice are much broader than the securities we recommend for Client portfolios. In many cases, Clients ask our opinion with respect to securities they acquired before they became our Client. Suitability Information and Account Profile The Representative will obtain from the Client information about the Client's personal and financial situation, and will assist the Client to designate for the account maintained with the Custodian (the "Managed Account") in which Client deposits the assets we manage (the "Managed Assets"), an appropriate investment objective and target for risk/volatility to guide management of the account. The information regarding the Client's personal and financial situation, and the investment objective and target for risk/volatility for the Managed Account maintained with the Custodian is referred to collectively as the "Suitability Information." Based on the Suitability Information, the Representative will work with the Client to designate one of RFS's model portfolios that is suitable for investment of the Managed Assets allocated to the Managed Account. To meet the individual needs of a particular Client, RFS may modify an existing model portfolio, or blend two or more existing model portfolios, to achieve desired characteristics of the Portfolio for a Managed Account. RFS will invest and re-invest the Managed Assets of the Managed Account according to the designated Portfolio (or any successor Portfolio selected by the Representative), allocated among appropriate asset classes, in such proportions, and managed in a manner reasonably intended to achieve the Managed Account's investment objective and risk/volatility target, and any reasonable investment restrictions imposed by the client in writing.
Depending on whether the Client establishes more than one Managed Account and the customizations or complexities of each Portfolio, RFS reserves the right to manage the Client's Managed Accounts separately (on an "account-by-account" basis) or on an aggregate basis across all accounts of the Client's household participating in the IM Program (the "Household" basis). Client acknowledges that, in general, investment objectives, risk/volatility targets, and other characteristics are established and evaluated on an account-by-account basis. However, with RFS's consent, in its sole discretion, Client 5 may establish targets aggregated across all Household Managed Accounts. However, at any time, RFS retains the discretion to change the basis for managing and reporting Managed Accounts from an account-by-account basis to a Household basis, and vice versa.
Custodian Clients must maintain the Managed Accounts and Managed Assets with a qualified custodian (the "Custodian") acceptable to RFS. We recommend the custodial and brokerage services of Pershing Advisor Solutions, member FINRA/SIPC ("PAS" or "Pershing"). Pershing and RFS are not affiliated. For investments in subaccounts of variable annuities, the insurance company (or its transfer agent) serves as the Custodian. Clients are not required to purchase a variable annuity to participate in the Program, however, certain investments are only available as sub-managed accounts of a variable annuity. Investments in mutual funds may also be maintained in accounts held directly with the mutual fund company or its transfer agent, which serves as qualified custodian.
Portfolio Investments RFS has discretion to select the investments that will be used for each of the asset classes in a Portfolio. For many clients, the investments will be represented by investment company securities, such as mutual funds and ETFs (or similar subaccounts of variable annuities, if client owns such an annuity); however, depending on the client's needs, a broader range of investments, such as individual stocks, bonds, or other individual securities, may be used to represent the asset classes in the Portfolio, but only if we agree in advance. Discretionary Account All Managed Accounts are fully discretionary, except as provided below when RFS specifically agrees, in its sole discretion, to accept an Account on a non-discretionary basis. In a discretionary account, the client grants RFS and the Representative full authority and discretion to manage the Managed Assets and each Managed Account, without prior consent or notice to client, according to the terms of the Program and Agreement, other Program documents, Suitability Information, and other information provided to RFS and Representative from time to time. RFS and the Representative will provide continuous and regular supervisory or management services with respect to the Managed Assets to seek to achieve the Account objectives. RFS and the Representative may elect to change (on either a temporary or permanent basis) the asset classes and sub-classes, class weightings, credit quality, duration, market sector, style, volatility (risk characteristic), interest rate sensitivity, issuer, security types, or other characteristics or parameters of the investments comprising a Portfolio, all without prior notice or consent of the client; provided, RFS will inform client after a change of Portfolio for a Managed Account.
Non-Discretionary Accounts In its sole discretion, RFS may agree to accept an Account for management on a non-discretionary basis. Where possible, RFS will seek to have ongoing responsibility to select or make recommendations as to specific securities or other investments for the Account, and to have responsibility for arranging or effecting the security purchases or sales if its recommendations are accepted; and in such case, it will be deemed to provide continuous and regular investment supervisory or management services with respect to that Managed Account. If RFS is unsuccessful in obtaining such responsibility, it will not be considered to provide continuous or regular investment supervisory or management services for non-discretionary accounts. RFS's status with respect to the particular Account will be stated in the Agreement.
6 Clients of non-discretionary accounts should be aware that because of the time delays involved in obtaining client consent for trades, RFS's policies provide for it to place orders for discretionary accounts before contacting clients of non-discretionary accounts for their consent. Although this practice is not expected to affect investments in mutual funds (which should obtain the same daily NAV price), it may create a material difference between discretionary and non-discretionary accounts in prices received for other types of Portfolio investments where prices are set by the trading markets throughout the day. Although it is not possible to predict whether accounts whose orders are submitted earlier will always receive a more favorable price in every instance, RFS believes this may often be the case. Consequently, discretionary accounts may perform materially better than non-discretionary accounts over time as a result of their orders being submitted earlier.
Please refer to Item 8 for information about RFS's methods of analysis and investment strategies, the types of investments RFS generally recommends, and the material risks involved with respect to the IM Program. Refer to Item 12 for information regarding brokerage. Financial Advice and Financial Planning Services Financial

Advice and Financial Planning Services for Investment Management Program Clients Clients in the Program receive financial advice through on-going meetings and discussions with the Representative in order to identify an appropriate investment portfolio, and inform and support our investment management services. We also provide financial planning services to assist our Program clients organize their financial situation and plan for the successful transfer of wealth to the next generation in a tax-advantaged manner. The financial planning services provide a solid financial planning foundation and address topics drawn from the list below, appropriate for the client's personal situation (although not presented in the same detail as the separate, fee-based Financial Planning Services). There is no additional charge for the financial advice and financial planning services provided to Program Clients.
Fee-Based Financial Planning Services For non-Program Clients or Program Clients who seek more detailed presentation than included as part of the standard Program services, RFS offers fee-based financial planning services, covering topics drawn from the list below, appropriate for the client's personal situation (the "Financial Planning Services").
Fee-Based Financial Planning Services Topics Investment AnalysisRetirement Planning Insurance Needs Analysis Cash Flow ForecastingRetirement Plan Analysis Charitable Giving Asset Allocation Review Distribution PlanningBusiness Succession Planning RFS and the client will enter into a written agreement for fee-based Financial Planning Services (referred to herein as the "Agreement") that describes the Financial Planning Services RFS will provide, the Financial Planning Fees for such services, and the parties' mutual agreements with respect to whether RFS will agree to implement recommendations, whether RFS will monitor the actions, products, and services provided pursuant to the Agreement, whether RFS will monitor client's progress towards meeting established goals, and RFS's responsibility for updating financial planning recommendations and the timing of such updates. 7 Through our fee-based Financial Planning Services, the Representative will meet with the client to discuss and analyze the client's investments and financial situation, and help the client to identify his or her investment goals and objectives, tolerance for risk, and investment time horizon, among other key factors to developing a financial plan. Clients may be asked to provide detailed information about the client's personal and family situation, estate and retirement plans, trust agreements, wills, investments, insurance, or other information necessary to provide the specific services requested. Based on the information provided by the client, the Representative will develop recommendations to help the client towards achieving his or her investment objectives. Reliance on Information & Planning Assumptions In providing financial advice and financial planning services, RFS and the Representative will rely on assumptions and estimates regarding a number of important factors that may or may not turn out to be accurate at any time. These assumptions will often include subjects such as future market performance and investment returns, anticipated and reasonably foreseeable living and medical expenses, tax laws, interest rates, and other factors. RFS and the Representative will also rely on information provided by client and client's other Professional Services providers (e.g., attorneys, accountants, etc.).
RFS does not verify information received from the client or from such Professional Services providers, and RFS is expressly authorized to rely on such information. As a result of likely differences between the items assumed and the actual situation at any time in the future, client's (or client's successors') financial situation or needs may be materially different than anticipated and client's financial or investment objectives may not be achieved. Clients are advised that it remains their responsibility to promptly notify RFS of material changes in their financial situation or investment objectives, to allow for reviewing, evaluating, or revising RFS's previous recommendations or services.
Additional Compensation from Purchase of Insurance or Securities Recommendations; Conflict of Interest The financial plan will usually include recommendations to assist the client to achieve his or her financial goals and objectives through purchasing or selling securities (generally, mutual funds and ETFs) or updating or replacing insurance products or policies, establishing or participating in tax- qualified accounts, or increasing or decreasing amounts held in savings accounts or other liquid investments. In making such recommendations, a conflict of interest exists. See Item 10 for discussion of the conflicts of interest that arise as a result of the compensation to be received if the client chooses to accept a recommendation to purchase securities or insurance products from a Representative acting in a separate capacity as an insurance agent or registered representative of a broker-dealer.
Institutional Consulting Services Advisor provides a range of institutional and other consulting services addressing a variety of investment and non-investment matters, such as pension plan design, and other focused investment consultations. The scope of these project-based services varies, as each engagement is individually negotiated and tailored to accommodate the specific needs of a particular client. In these cases, the services we provide will be included in a Consulting Agreement negotiated between RFS and the client. We will charge a project or consulting fee, which will vary depending on the nature, complexity, and scope of the services to be provided, as well as other factors, such as the identity of the client, potential for new or additional assets or referrals, and other factors such to our discretion. Advice is based on objectives communicated, either orally or in writing, by the client or the client's advisers. Advice may be provided through individual consultations or a written plan document, as agreed between Advisor and client.
8 Information Regarding Our Services Changes in Client Circumstances Clients are advised that changes in their personal or financial situation, investment objectives, tolerance for risk, investment time horizon, or other Suitability Information may cause a Portfolio or strategy to become no longer suitable. In the event of any material change in client's personal or financial circumstances, client should contact the Representative or RFS promptly so that we may assist in identifying another Portfolio, program, strategy or other investments that better meet the client's needs.
Deposit Cash or Cash Equivalents; Excluded Assets In general, for the IM Program, Clients will typically deliver cash or cash equivalents to the Custodian, or the Client will transfer securities they already own to the Custodian with the expectation that the securities will be liquidated to cash as soon as reasonably practical so the proceeds can be invested consistently with the Portfolio identified for Client's Managed Account. In certain cases, based on prior discussions between the Client and RFS and the agreement of RFS, in its sole discretion, RFS may agree to accept securities that Client already owns because they happen to fit within its portfolios as substitutes for securities of certain asset classes already identified for its model portfolios.
Less commonly, and only with RFS's prior consent, in its sole discretion, prior to initiation of the asset transfer to the Managed Account, is the transfer of assets that Client wishes to be held in an account related to the Managed Account (such as a subaccount or other division of the Managed Account that will be included on the Managed Account statement for reporting purposes only by the Custodian), but that are not publicly traded or that cannot be promptly sold. The construction of RFS's portfolios as long-term investments and the preparation of reports regarding the portfolio are complicated by the ongoing presence of these restricted assets. Even when we agree such assets may be held in the Account, we shall require such assets to be treated as "Excluded Assets" and for reporting purposes only and for which we shall not have any responsibility to provide advice, manage, or value whatsoever, unless we specifically agree they shall be treated as Assets. Client will grant us and the Custodian the authority, in our respective discretion, to liquidate securities transferred into the Account or to require client to transfer such securities out of the Account upon request.
Clients may withdraw Assets on notice to RFS, subject to the usual and customary securities settlement procedures. RFS designs its portfolios as long-term investments and the withdrawal of assets may impair the achievement of a client's investment objectives. RFS may consult with its clients about the options and implications of transferring securities. Clients are advised that when transferred securities are liquidated, they may be subject to transaction fees, fees assessed at the mutual fund level (i.e. contingent deferred sales charge) and tax ramifications, for example.
Management of Account Until We Receive Notice Unless and until the client notifies us to designate a different Portfolio for their Managed Account, notifies us of material changes in their Suitability Information, or notifies us to impose (or change) reasonable restrictions on the investment of their Managed Account, we will continue to manage the Managed Account according to the Suitability Information in our records. Clients should inform us promptly of significant changes in their individual or family circumstances or financial situation, or in the investment goals or objectives, investment time horizon, tolerance for risk or volatility, or liquidity needs of the account so that appropriate changes can be made. Such notices shall be in writing.
9 IRA Rollover Recommendations According to the terms of the US Department of Labor ("DOL") Prohibited Transaction Exemption 2020-02 ("PTE 2020-02"), we are providing the following acknowledgment to you: 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 PTE 2020-02 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. We benefit financially from the rollover of your assets from a retirement account to an account that we manage or provide investment advice, because the assets increase our assets under management and, in turn, our advisory fees. As a fiduciary, we only recommend a rollover when we believe it is in your best interest.
Assets under Management As of December 31, 2022, we provided investment management services on a discretionary basis with respect to assets under management of $271,329,508.