A. Firm Information
Optimum Financial Services, LLC (“Optimum” or the “Advisor”) is a registered investment advisor with the U.S.
Securities and Exchange Commission (“SEC”). The Advisor is organized as a Limited Liability Company (LLC)
under the laws of Mississippi. Optimum was founded in 1990 and is a wholly owned subsidiary of Optimum
Holdings, LLC. Optimum is operated by John W. Garrard II, (President, Chief Compliance Officer, and Asset
Manager) and William (“Billy”) H. Garrard (Executive Vice President and Asset Manager). This Disclosure
Brochure provides information regarding the qualifications, business practices, and the advisory services
provided by Optimum.
B. Advisory Services Offered
Optimum offers investment advisory services to individuals, high net worth individuals, trusts, estates,
partnerships, bank or thrift corporations, charitable organizations, businesses, and retirement plans (each
referred to as a “Client”).
The Advisor serves as a fiduciary to Clients, as defined under the applicable laws and regulations. As a
fiduciary, the Advisor upholds a duty of loyalty, fairness and good faith towards each Client and seeks to
mitigate potential conflicts of interest. Optimum's fiduciary commitment is further described in the Advisor’s Code
of Ethics. For more information regarding the Code of Ethics, please see Item 11 – Code of Ethics, Participation
or Interest in Client Transactions and Personal Trading.
Investment Management Services
Optimum provides customized investment advisory solutions for its Clients. This is achieved through continuous
personal Client contact and interaction while providing discretionary and non-discretionary investment
management and related advisory services. Optimum works closely with each Client to identify their investment
goals and objectives as well as risk tolerance and financial situation in order to create a portfolio strategy.
Optimum will then construct an investment portfolio consisting of low-cost, diversified mutual funds and/or
exchange-traded funds (“ETFs”) to achieve the Client’s investment goals. The Advisor may also utilize individual
stocks and bonds, or precious metals to meet the needs of its Clients. The Advisor may retain certain types of
investments based on a Client’s legacy investments based on portfolio fit and/or tax considerations.
Optimum’s investment strategies are primarily long-term focused, but the Advisor may buy, sell, or re-allocate
positions that have been held for less than one year to meet the objectives of the Client or due to market
conditions. Optimum will construct, implement and monitor the portfolio to ensure it meets the goals, objectives,
circumstances, and risk tolerance agreed to by the Client. Each Client will have the opportunity to place
reasonable restrictions on the types of investments to be held in their respective portfolio, subject to acceptance
by the Advisor.
Optimum evaluates and selects investments for inclusion in Client portfolios only after applying its internal due
diligence process. Optimum may recommend, on occasion, redistributing investment allocations to diversify the
portfolio. Optimum may recommend specific positions to increase sector or asset class weightings. The Advisor
may recommend employing cash positions as a possible hedge against market movement. Optimum may
recommend selling positions for reasons that include, but are not limited to, harvesting capital gains or losses,
business or sector risk exposure to a specific security or class of securities, overvaluation or overweighting of
the position[s] in the portfolio, change in risk tolerance of the Client, generating cash to meet Client needs, or
any risk deemed unacceptable for the Client’s risk tolerance.
At no time will Optimum accept or maintain custody of a Client’s funds or securities, except for the limited
authority as outlined in Item 15 – Custody. All Client assets will be managed within the designated account[s] at
the Custodian, pursuant to the terms of the advisory agreement. Please see Item 12 – Brokerage Practices.
Retirement Accounts – When deemed to be in the Client’s best interest, the Advisor will recommend that a
Client take a distribution from an ERISA sponsored plan or to roll over the assets to an Individual Retirement
Accounts (“IRAs”), or recommend a similar transaction including rollovers from one ERISA sponsored Plan to
another, one IRA to another IRA, or from one type of account to another account (e.g. commission-based
account to fee-based account). In such instances, the Advisor will serve as an investment fiduciary as that term
is defined under The Employee Retirement Income Security Act of 1974 (“ERISA”) and/or the Internal Revenue
Code (“IRC”), as applicable, which are laws governing retirement accounts. Such a recommendation creates a
conflict of interest if the Advisor will earn a new (or increase its current) advisory fee as a result of the
transaction. No client is under any obligation to roll over a retirement account to an account managed by the
Advisor.
Investment Consulting Services
Optimum provides a variety of investment consulting services to Clients, pursuant to a written investment
consulting services agreement. Services are offered in several areas related to a Client’s investment portfolio,
financial situation, and other areas of need. Generally, such consulting services involve preparing a specific
investment plan or rendering a specific investment consultation based on the Client’s investment goals and
objectives. This consulting may encompass one or more areas of need, which may include the following
services:
• General investment plan
• Portfolio review and evaluation
• Ongoing investment consulting
• Risk analysis
• Overlap analysis
• Back-tested portfolio analysis
• Correlation analysis, and/or
• Fee analysis of underlying investments
• Negotiation of the purchase of a substantial asset (i.e., residence, vacation home, business, etc.)
The Client may engage the Advisor for other services not listed above. An investment consultation rendered to
the Client will usually include general recommendations for a course of activity or specific actions to be taken by
the Client. Through the creation of an investment proposal outlining the Client’s previously stated investment
considerations and an investment policy statement, the Advisor may advise on best trading and investment
practices including security selection, commission costs, alternatives, liquidity, methods of investing, sell criteria
(if any), dollar cost averaging, and timing. Optimum may also refer Clients to an accountant, attorney, or other
specialist, as appropriate for their unique situation. For consultations or ad-hoc engagements, the Advisor may
not provide a written summary. Consultations are typically completed within six (6) months of contract date,
assuming
all information and documents requested are provided promptly.
Investment consulting recommendations pose a conflict between the interests of the Advisor and the interests of
the Client. For example, the Advisor has an incentive to recommend that Clients engage the Advisor for
investment management services or to increase the level of investment assets with the Advisor, as it would
increase the advisory fees paid to the Advisor. Clients are not obligated to implement any recommendations
made by the Advisor or maintain an ongoing relationship with the Advisor. If the Client elects to act on any of the
recommendations made by the Advisor, the Client is under no obligation to implement the transaction through
the Advisor.
Investment Management Platform
Betterment Institutional Platform – Optimum may recommend that certain Clients implement their investment
portfolios through Betterment Institutional, a division of Betterment LLC (herein “Betterment Institutional” or the
“Investment Platform”). Betterment Institutional is what is often termed a “robo-advisor”, an online wealth
management service that provides automated, algorithm-based portfolio management advice. Robo-advisors
use technology to deliver similar services as traditional advisors, but generally only offer portfolio management
and do not get involved in a Client’s personal situation, such as taxes and retirement or estate planning.
Optimum chose to affiliate with Betterment Institutional due to the Investment Platform’s customized portfolio
allocations, automated rebalancing, and competitive fees. Optimum utilizes Betterment Institutional as a
complement to its comprehensive financial planning services to provide cost effective investing coupled with
personalized financial planning.
To establish accounts with Betterment Institutional, the Client will also enter into one or more agreements with
Betterment that provides the authority for discretionary investment management by the Investment Platform.
Optimum remains the Client’s primary advisor and relationship contact and will select or construct a portfolio of
ETFs and/or cash equivalents from the universe of investments included on the Investment Platform.
Optimum will have the discretionary authority to instruct Betterment Institutional with respect to portfolio
construction, asset allocation, and other investment decisions, subject to the limitations described herein.
Betterment Institutional will implement the portfolio and be responsible for the discretionary trading of the ETFs
in the Client’s portfolio, including the purchase and sale of investments and the automatic rebalancing back to
targets.
Betterment Institutional utilizes between ten to twelve different ETF’s, representing various asset classes for the
construction of investment portfolios. As discussed above, Optimum will work with each Client to
select/construct a portfolio to meets the needs of the Client. The Client has limited ability to put restrictions on its
accounts. The account[s] cannot contain investments that are not included in the Betterment Institutional
universe of ETFs and cash equivalents.
Betterment Institutional, under its discretionary authority, will automatically adjust and rebalance the Client’s
accounts daily based on the drift tolerance established for the positions in the investment portfolio. The
Advisor’s investment philosophy is long-term, but the Advisor may make such tactical overrides to take
advantage of market pricing anomalies or strong market sectors. The Advisor does not actively trade in the
Client’s account[s] and is also limited to a enter one allocation change per account per trading day through
Betterment Institutional, the Client should be aware of these potential disadvantages.
For its services, Betterment Institutional will charge an asset-based fee that includes the securities transaction
fees for all trades. The Advisor does not charge its own investment advisory fee on assets referred to
Betterment Institutional as detailed in Item 5.A. below and does not share in any fees earned by Betterment
Institutional.
The Client, prior to entering into an agreement with the Investment Platform, will be provided with the
Investment Platform's Form ADV Part 2A (or a brochure that makes the appropriate disclosures).
Retirement Plan Advisory Services
Optimum provides retirement plan advisory services on behalf of the retirement plans (each a “Plan”) and the
company (the “Plan Sponsor”), pursuant to the terms of the retirement plan advisory agreement. The Advisor’s
retirement plan advisory services are designed to assist the Plan Sponsor in meeting its fiduciary obligations to
the Plan. Each engagement is customized to the needs of the Plan and Plan Sponsor. Services generally
include:
• Vendor Analysis
• Plan Participant Enrollment and Education Tracking
• Investment Oversight Services (ERISA 3(21))
• Investment Management Services (ERISA 3(38))
• Performance Reports
• Ongoing Investment Recommendation and Assistance
These services are provided by Optimum serving in the capacity as a fiduciary under the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”). In accordance with ERISA Section 408(b)(2), the Plan
Sponsor is provided with a written description of Optimum’s fiduciary status, the specific services to be rendered
and all direct and indirect compensation the Advisor reasonably expects under the engagement.
C. Client Account Management
Prior to engaging Optimum to provide investment advisory services, each Client is required to enter into one or
more agreements with the Advisor that define the terms, conditions, authority and responsibilities of the Advisor
and the Client. These services may include:
• Establishing an Investment Strategy – Optimum, in connection with the Client, will develop a strategy
that seeks to achieve the Client’s goals and objectives.
• Asset Allocation – Optimum will develop a strategic asset allocation that is targeted to meet the
investment objectives, time horizon, financial situation and tolerance for risk for each Client.
• Portfolio Construction – Optimum will develop a portfolio for the Client that is intended to meet the stated
goals and objectives of the Client.
• Investment Management and Supervision – Optimum will provide investment management and ongoing
oversight of the Client’s investment portfolio.
D. Wrap Fee Programs
Optimum does not manage or place Client assets into a wrap fee program. Investment management services
are provided directly by Optimum.
E. Assets Under Management
As of December 31, 2023, Optimum manages $257,166,368 in Client assets, of which $257,450,141 are
managed on a discretionary basis and $283,773 on a non-discretionary basis. Clients may request more current
information at any time by contacting the Advisor.