AFM was founded in 1983 and is principally owned by Ryan Fleming and Mary Moore. Other
owners include Chris Rivers and Carl Holubowich. As of December 31, 2023, AFM managed
$897,608,211 million on a discretionary basis and $141,862,670 million on a non-discretionary
basis on behalf of approximately 447 household Clients.
Portfolio Management Services
AFM offers Clients investment management services as covered in the Portfolio Management
Agreement where each Client’s investment account and portfolio is managed on a regular and
continuous basis. AFM will assist the Client in determining, among other things, suitability,
investment objectives, goals, time horizons, and risk tolerances. The Client’s personal
investment allocation will be developed from these goals and objectives, and AFM will manage
the Client’s portfolio based on that allocation. Account supervision is guided by stated
objectives of the Client (i.e., maximum capital appreciation, growth, income, or growth and
income).
AFM believes that to the extent possible, the firm must tailor portfolio investment strategies to
the needs of the individual Client. In general, the firm's investment philosophy is to seek to
achieve capital appreciation and/or current income within the constraints of prudent risk-taking
in accordance with the Client's ability and willingness to accept risk. However, individual
portfolio strategies will vary according to the Client's stated objectives. Portfolios are structured
to meet current investment objectives of the Client and to anticipate future needs and changes in
the Client's longer-term goals.
AFM manages advisory accounts on a discretionary or a non-discretionary basis. Within its non-
discretionary capacity, AFM may, with Client consent, purchase or sell securities to meet the
cash needs of the Client on an as needed basis. These purchases and sales will be executed in a
manner such that the resulting allocations will generally match the allocation in the account prior
to the purchase or sale. However, in situations where consent to a transaction is required, non-
discretionary Clients will forgo trading until such time as AFM can contact the Client and
receive authorization for the transaction. The unavailability of a client to authorize a transaction
may have a materially negative impact on performance of the Client’s account; accordingly,
Client assumes all risk.
Commonwealth Equity Services, Inc. is a FINRA-registered broker/dealer and SEC-registered
investment advisor. Commonwealth Equity Services, Inc. has adopted the “doing business as”
name of Commonwealth Financial Network (hereinafter referred to as “Commonwealth”).
AFM has entered into an agreement with Commonwealth to offer AFM Clients access to
Commonwealth’s Advisory Services Program, PPS Custom Account Program, PPS Select
Account Program, PPS Direct Account Program and Retirement Plan Consulting Program. In
the case of the PPS Custom Account Program, AFM will assist Clients in the development of
personalized asset allocation programs. In the case of the PPS Select Account Program,
portfolio management is provided by Commonwealth’s Asset Management team. In the case of
the PPS Direct Account Program, AFM offers the services of approved money management
firms referred to as “Sub-Advisors” to assist in managing Client portfolios. In the case of the
Retirement Plan Consulting Program, AFM provides a fee-for-service consulting program
whereby advisors offer one-time or ongoing advisory services to qualified retirement plans.
Clients may engage AFM for Retirement Plan Consulting services on a negotiated hourly, flat,
fixed, or asset-based fee basis. The maximum annual account consulting fee, when stated as a
percentage of assets, is 1.50%,and is negotiable. Fees may be paid at the time of service, in
advance of service, or after service has been rendered. If fees are being charged on an hourly
basis, they may not exceed $500 per hour. Through the Retirement Plan Consulting Program,
AFM may assist plan sponsors with their fiduciary duties and provide individualized advice
based upon the needs of the plan and/or plan participants regarding investment management
matters, such as:
Investment policy statement support
Investment selection and monitoring
Overall portfolio composition
Participant advice programs
Clients who participate in one or more of Commonwealth’s PPS Programs will receive
Commonwealth’s Form ADV Part2A and/or Wrap Fee Brochure, in addition to AFM’s Form
ADV Part 2. Clients should refer to Commonwealth’s Form ADV Part 2or Wrap Fee Brochure
for detailed information about Commonwealth and Commonwealth’s PPS Programs.
Clients utilizing AFM’s portfolio management services must utilize the brokerage services of
Commonwealth, of which advisory personnel of AFM are registered representatives (See Other
Financial Industry Activities and Affiliations for more information). Fees for
brokerage/execution will be charged pursuant to Commonwealth’s then current transaction
schedule, which will be provided separately upon request. Accounts held at Commonwealth are
also subject to custodial and account servicing fees. AFM has no revenue or profit interest in
such fees.
Financial Planning Services
AFM offers financial planning services, including comprehensive or segmented (limited)
financial plans, investment plans, and/or individual consultations regarding a Client’s financial
affairs as covered in the Financial Planning Agreement. The design and implementation of a
financial plan may begin with the process of gathering data regarding income, expenses, taxes,
insurance coverage, retirement plans, wills, trusts, investments and/or other relevant information
pertaining to a Client’s overall financial situation. This information is carefully analyzed taking
into account a Client’s goals and stated objectives, and a series of recommendations and/or
alternative strategies will be developed which are designed to achieve optimum overall results.
Financial planning Clients are under no obligation to implement any recommendations through
AFM. However, AFM will be available to help the Client implement the recommendations,
including by providing securities (through Commonwealth) and insurance brokerage where
representatives of AFM have a profit interest in such transactions. Transaction and account fees
will generally follow the summary schedule included in the Portfolio Management section
above. AFM has a conflict of interest in recommending implementation of financial planning
recommendations through our advisors as our advisors will receive additional compensation
should you choose to implement the plan.
Hourly Consultation Services
In addition to offering portfolio management and financial planning services, AFM may also
offer specific administrative and consulting services on an hourly basis. This hourly consultation
service may take the form of general investment advice or other forms of consulting
arrangements. For consultation services provided by AFM, Client shall agree to pay AFM
hourly fees at the rates set forth in the schedule included in the Financial Planning section above.
Investment recommendations and advice offered by AFM and its advisors do not constitute legal,
tax, or accounting advice. Clients should coordinate and discuss the impact of the financial advice
they receive from their advisor with their attorney and accountant. Clients should also inform their
advisor promptly of any changes in their financial situation, investment goals, needs, or
objectives. Failure to notify the advisor of any material changes could result in investment advice
not meeting the changing needs of the client.
IRA Rollover Considerations
As part of AFM’s financial planning and advisory services, AFM may provide the Client with
recommendations and advice concerning Client’s employer retirement plan or other qualified
retirement account. When appropriate, AFM may recommend that Client withdraw assets from
Client’s employer-sponsored retirement
plan or other qualified retirement account and roll the
assets over to an individual retirement account (“IRA”) or other retirement savings account to be
managed by AFM or a Third-Party Manager that AFM recommends. If the Client elects to roll the
assets to an IRA under AFM’s management, AFM will charge the Client an asset-based fee as
described in Item 5. This practice presents a conflict of interest because AFM’s Advisory
Representative has an incentive to recommend a rollover to the Client for the purpose of
generating fee-based compensation rather than solely based on the Client’s needs. Client is under
no obligation, contractually or otherwise, to complete the rollover. Furthermore, if the Client
does complete the rollover, Client is under no obligation to have the Client’s IRA assets managed
under AFM’s or a Third-Party Managed Program. Client has the right to decide whether to
complete the rollover and the right to consult with other financial professionals.
Some employers permit former employees to keep their retirement assets in their company plan.
Also, current employees can sometimes move assets out of their company plan before they retire
or change jobs. In determining whether to complete the rollover to an IRA, and to the extent the
following options are available, the Client should consider the costs and benefits of each.
An employee will typically have four options:
1. Leave the funds in current employer’s (former employer’s) plan.
2. Roll over the funds to a new employer’s retirement plan.
3. Cash out and take a taxable distribution from the plan.
4. Roll the funds into an IRA or other Retirement plan account.
Each of these options has advantages and disadvantages. Before making a change, AFM
encourages Client to speak with a financial advisor, CPA and/or tax attorney.
Before rolling over the Client’s retirement funds to an IRA for AFM to manage or to a Third-
Party Managed Program, carefully consider the following. NOTE: This list is not exhaustive.
1. Determine whether the investment options in the Client’s employer’s retirement plan
address the Client’s needs or whether other types of investments are needed.
a. Employer retirement plans generally have a more limited investment menu than IRAs.
b. Employer retirement plans may have unique investment options not available to the public,
such as employer securities or previously closed funds.
2. Client’s current plan may have lower fees than AFM’s fee and/or the Third-Party
Manager’s fee combined.
a. If Client is interested in investing only in mutual funds, Client 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.
b. Client should understand the various products and services available through an IRA
provider and their costs.
c. It is likely Client will not be charged a management fee and will not receive ongoing
asset management services unless Client elects to have such services if such services
are offered. If Client’s plan offers management services, the fee associated with the
service may be more or less than our fee and/or the Third-Party Manager’s fee
combined.
3. The Third-Party Manager’s or AFM’s management strategy may have higher risk than the
options provided to Client in Client’s plan.
4. Client’s current plan may offer financial advice, guidance, management and/or portfolio
options at no additional cost.
5. If Client keeps assets titled in a 401(k) or retirement account, Client could potentially
delay Client’s required minimum distribution beyond age 72.
6. Client’s 401(k) may offer more liability protection than an IRA; each state varies.
Generally, Federal law protects assets in qualified plans from creditors. Since 2005, IRA assets
have been generally protected from creditors in bankruptcies; however, there can be exceptions.
Client should consult an attorney if Client is concerned about protecting Client’s retirement plan
assets from creditors.
7. Client may be able to take out a loan on Client’s 401(k), but not from an IRA.
8. 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 a home purchase.
9. If Client owns company stock in Client’s retirement plan, Client may be able to liquidate
those shares at a lower capital gains tax rate if Client rolls Client’s account to an IRA.
10. Client’s plan may allow Client to hire AFM or another firm as the manager and keep the
assets titled in the plan name.
It is important that you understand your options, their features and their differences, and decide
whether a rollover is best for you. If you have questions, contact us at our main number listed on
the cover page of this brochure.
Program Choices and Conflicts of Interest
Clients should be aware that the compensation to AFM and Client’s advisor will differ according
to the specific advisory program chosen. This compensation to AFM and Client’s advisor may be
more than the amounts we would otherwise receive if you participated in another program or paid
for investment advice, brokerage, and/or other relevant services separately. As a result of the
differences in fee schedules and other sources of compensation that exist among the various
advisory programs and services offered by AFM and Client’s advisor, AFM and Client’s advisor
have a financial incentive to recommend a particular program or service over other programs or
services.
As discussed in detail in Item 10 (Financial Industry Activities and Affiliations), AFM has chosen
to partner with Commonwealth to provide certain services, including but not limited to fee billing
and account performance reporting, to AFM and its clients. For the services it provides,
Commonwealth charges financial advisors an administrative fee at the same time clients are
charged asset-based fees. The administrative fee is charged to and paid by the financial advisor
rather than the advisor’s clients and is calculated as a percentage of the total account assets,
including cash and money market positions, held by the advisor’s clients. The administrative fee
covers Commonwealth’s maintenance costs associated with performance reporting, account
reconciliation, auditing, and quarterly statements. In the same manner as many advisors offer
asset management fee discounts to their larger clients, Commonwealth offers its advisors
administrative fee discounts based on their total assets under management. As advisors grow their
fee-based business on which Commonwealth provides administrative services, Commonwealth’s
economies of scale are shared with its advisors by reducing the percentage amount of
administrative fees that would otherwise be charged to the advisors. Advisors are offered
discounts on the administrative fee when they reach specified asset levels, starting at $10 million.
As the amount of advisors’ client assets in either their own asset management program(s) and/or
Commonwealth’s PPS programs grows above certain levels, advisors receive larger percentage
discounts to the administrative fees than they would otherwise receive with fewer assets in their
own asset management program(s) and/or Commonwealth’s PPS programs.
Additionally, advisors with assets under management of at least $25 million qualify for an
increased payout percentage on advisors’ clients’ account management fees, starting at 90.00%
and rising to a maximum of 98.00% as their assets under management grow.
These discounts in administrative fees and higher payouts for reaching various AUM levels
present a conflict of interest because they provide a financial incentive for Client’s advisor to
recommend either their own asset management programs or Commonwealth’s PPS programs over
other available managed or wrap account programs that do not offer such discounts or higher
payouts to Client’s advisor.