A. Godshalk Welsh Capital Management, Inc. (the “Registrant”) is a corporation formed
under the laws of the Commonwealth of Pennsylvania in 1991. The Registrant is owned
by Matthew Welsh. The Registrant was previously known as Eric M. Godshalk & Co.
B. As discussed below, the Registrant offers to its clients (individuals, high net worth
individuals, pension and profit-sharing plans, and charitable organizations) investment
advisory services and financial planning and consulting services.
INVESTMENT ADVISORY SERVICES
The client can engage the Registrant to provide discretionary investment advisory
services on a fee-only basis.
The Registrant provides investment advisory services specific to the needs of each client.
Before providing investment advisory services, an investment adviser representative will
ascertain each client’s investment objectives. Then, the Registrant will allocate and/or
recommend that the client allocate investment assets consistent with the designated
investment objectives.
The Registrant generally allocates or recommends that clients allocate investment assets
among exchange-listed securities, securities traded over-the-counter, mutual fund shares,
municipal bonds, corporate debt, exchange traded funds (“ETFs”), US government
securities, and certificates of deposit on a discretionary basis in accordance with the
client’s designated investment objective(s). Once allocated, the Registrant provides
ongoing monitoring and review of account performance, asset allocation and client
investment objectives.
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
To the extent requested by a client, the Registrant may also provide financial planning
and/or consulting services (including investment and non-investment related matters,
including estate planning, insurance planning, etc.) on a stand-alone separate fee basis.
Before engaging the Registrant to provide stand-alone planning or consulting services,
clients are required to enter into a Financial Planning and Consulting Agreement with
Registrant setting forth the terms and conditions of the engagement (including
termination), describing the scope of the services to be provided, and the portion of the
fee that is due from the client before Registrant commences services.
The client retains absolute discretion over all implementation decisions and is free to
accept or reject any recommendation from the Registrant. The Registrant does not serve
as an attorney, accountant, or insurance agency, and no portion of our services should be
construed as same. Accordingly, we do not prepare estate planning documents, tax
returns or sell insurance products. To the extent requested by a client, we may
recommend the services of other professionals for certain implementation purpose (i.e.,
attorneys, accountants, insurance, etc.). The client is under no obligation to engage the
services of any such recommended professional.
If the client engages any professional (i.e., attorney, accountant, insurance agent, etc.),
recommended or otherwise, and a dispute arises thereafter relative to such engagement,
the client agrees to seek recourse exclusively from the engaged professional. At all times,
the engaged licensed professional(s), and not Registrant, shall be responsible for the
quality and competency of the services provided.
Registrant’s financial planning and consulting services do not include ongoing
monitoring or updating of previously provided financial planning recommendations. It
remains the client’s responsibility to promptly notify the Registrant if there is ever any
change in his/her/its financial situation or investment objectives and to request a
review/evaluation/revision to Registrant’s previous recommendations and/or services.
MISCELLANEOUS
Limitations of Financial Planning and Non-Investment Consulting/Implementation
Services. To the extent requested by a client, Registrant may provide financial planning
and related consulting services regarding non-investment related matters, such as estate
planning, tax planning, insurance, etc. The Registrant does not serve as a law firm,
accounting firm, or insurance agency, and no portion of Registrant’s services should be
construed as legal, accounting, or insurance implementation services. Accordingly,
Registrant does not prepare estate planning documents, tax returns or sell insurance
products. To the extent requested by a client, Registrant may recommend the services of
other professionals for certain implementation purposes (i.e., attorneys, accountants,
insurance agents, etc.). Clients are reminded that they are under no obligation to engage
the services of any such recommended professional. The client retains absolute discretion
over all such implementation decisions and is free to accept or reject any
recommendation made by Registrant or its representatives.
If the client engages any professional (i.e., attorney, accountant, insurance agent, etc.),
recommended or otherwise, and a dispute arises thereafter relative to such engagement,
the client agrees to seek recourse exclusively from the engaged professional. At all times,
the engaged licensed professional(s), and not Registrant, shall be responsible for the
quality and competency of the services provided.
Use of Mutual and Exchange Traded Funds. Registrant utilizes mutual funds and
exchange traded funds for its client portfolios. In addition to Registrant’s investment
advisory fee described below, and transaction and/or custodial fees discussed above,
clients will also incur, relative to all mutual fund and exchange traded fund purchases,
charges imposed at the fund level (e.g., management fees and other fund expenses).
In addition, certain clients may transfer certain previously acquired mutual funds to
Registrant’s management, including mutual funds issued by Dimensional Fund Advisors
(“DFA”). DFA funds are generally only available through registered investment advisers.
With respect to these transferred DFA fund positions, restrictions regarding additional
purchases of, or reallocation among other, DFA funds will generally apply.
Retirement Rollovers-Potential for Conflict of Interest. A client or prospective client
leaving an employer typically has four options regarding an existing retirement plan (and
may engage in a combination of these options): (i) leave the money in the former
employer’s plan, if permitted, (ii) roll over the assets to the new employer’s plan, if one is
available and rollovers are permitted, (iii) roll over to an Individual Retirement Account
(“IRA”), or (iv) cash out the account value (which could, depending upon the client’s
age, result in adverse tax consequences). If Registrant recommends that a client roll over
their retirement plan assets into an account to be managed by Registrant, such a
recommendation creates a conflict of interest if Registrant will earn new (or increase its
current) compensation as a result of the rollover. If Registrant provides a
recommendation as to whether a client should engage in a rollover or not (whether it is
from an employer’s plan or an existing IRA), Registrant is acting as a fiduciary 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. No client is
under any obligation to roll over retirement plan assets to an account managed by
Registrant, whether it is from an employer’s plan or an existing IRA.
Socially Responsible (ESG) Investing Limitations. Socially Responsible Investing
involves the incorporation of Environmental, Social and Governance (“ESG”)
considerations into the investment due diligence process. ESG investing incorporates a
set of criteria/factors used in evaluating potential investments: Environmental (i.e.,
considers how a company safeguards the environment); Social (i.e., the manner in which
a company manages relationships with its employees, customers, and the communities
in which it operates); and Governance (i.e., company management considerations). The
number of companies that meet an acceptable ESG mandate can be limited when
compared to those that do not and could underperform broad market indices. Investors
must accept these limitations, including
potential for underperformance.
Correspondingly, the number of ESG mutual funds and exchange-traded funds are
limited when compared to those that do not maintain such a mandate. As with any type of
investment (including any investment and/or investment strategies recommended and/or
undertaken by Registrant), there can be no assurance that investment in ESG securities or
funds will be profitable or prove successful. Registrant does not maintain or advocate an
ESG investment strategy but will seek to employ ESG if directed by a client to do so. If
implemented, Registrant shall rely upon the assessments undertaken by the unaffiliated
mutual fund, exchange traded fund or separate account portfolio manager to determine
that the fund’s or portfolio’s underlying company securities meet a socially responsible
mandate.
Portfolio Activity. Registrant has a fiduciary duty to provide services consistent with the
client’s best interest. As part of its investment advisory services, Registrant will review
client portfolios on an ongoing basis to determine if any changes are necessary based
upon various factors, including, but not limited to, investment performance, account
additions/withdrawals, mutual fund manager tenure, style drift, and/or a change in the
client’s investment objective. Based upon these factors, there may be extended periods of
time when Registrant determines that changes to a client’s portfolio are neither necessary
nor prudent. Clients nonetheless remain subject to the fees described in Item 5 below
during periods of account inactivity. Of course, as indicated below, there can be no
assurance that investment decisions made by Registrant will be profitable or equal any
specific performance level(s).
Cryptocurrency: For clients who want exposure to cryptocurrencies, including Bitcoin,
the Registrant, may advise the client to consider a potential investment in corresponding
exchange traded securities, or an allocation to separate account managers and/or private
funds that provide cryptocurrency exposure. Crypto is a digital currency that can be
used to buy goods and services but uses an online ledger with strong cryptography (i.e.,
a method of protecting information and communications through the use of codes) to
secure online transactions. Unlike conventional currencies issued by a monetary
authority, cryptocurrencies are generally not controlled or regulated and their price is
determined by the supply and demand of their market. Because cryptocurrency is
currently considered to be a speculative investment, the Registrant will not exercise
discretionary authority to purchase a cryptocurrency investment for client accounts.
Rather, a client must expressly authorize the purchase of the cryptocurrency investment.
The Registrant does not recommend or advocate the purchase of, or investment in,
cryptocurrencies. The Registrant considers such an investment to be speculative.
Clients who authorize the purchase of a cryptocurrency investment must be prepared for
the potential for liquidity constraints, extreme price volatility and complete loss of
principal.
Cash Positions. Depending upon perceived or anticipated market conditions/events
(there being no guarantee that such anticipated market conditions/events will occur), the
Registrant may maintain cash and cash equivalent positions (such as money market
funds, etc.) for defensive, liquidity, or other purposes. Unless otherwise agreed in writing,
all such cash positions are included as part of assets under management for purposes of
calculating the Registrant’s advisory fee.
Cash Sweep Accounts. Certain account custodians can require that cash proceeds from
account transactions or new deposits, be swept to and/or initially maintained in a
specific custodian designated sweep account. The yield on the sweep account will
generally be lower than those available for other money market accounts. When this
occurs, to help mitigate the corresponding yield dispersion Registrant shall (usually
within 30 days thereafter) generally (with exceptions) purchase a higher yielding money
market fund (or other type security) available on the custodian’s platform, unless
Registrant reasonably anticipates that it will utilize the cash proceeds during the
subsequent 30-day period to purchase additional investments for the client’s account.
Exceptions and/or modifications can and will occur with respect to all or a portion of the
cash balances for various reasons, including, but not limited to the amount of dispersion
between the sweep account and a money market fund, the size of the cash balance, an
indication from the client of an imminent need for such cash, or the client has a
demonstrated history of writing checks from the account.
The above does not apply to the cash component maintained within a Registrant actively
managed investment strategy (the cash balances for which shall generally remain in the
custodian designated cash sweep account), an indication from the client of a need for
access to such cash, assets allocated to an unaffiliated investment manager and cash
balances maintained for fee billing purposes.
The client shall remain exclusively responsible for yield dispersion/cash balance
decisions and corresponding transactions for cash balances maintained in any Registrant
unmanaged accounts.
Client Obligations. In performing its services, Registrant shall not be required to verify
any information received from the client or from the client’s other designated
professionals and is expressly authorized to rely thereon. Moreover, each client is advised
that it remains their responsibility to promptly notify Registrant if there is ever any
change in their financial situation or investment objectives for the purpose of
reviewing/evaluating/revising Registrant’s previous recommendations and/or services.
Cybersecurity Risk. The information technology systems and networks that Registrant
and its third-party service providers use to provide services to Registrant’s clients employ
various controls, which are designed to prevent cybersecurity incidents stemming from
intentional or unintentional actions that could cause significant interruptions in
Registrant’s operations and result in the unauthorized acquisition or use of clients’
confidential or non-public personal information. Clients and Registrant are nonetheless
subject to the risk of cybersecurity incidents that could ultimately cause them to incur
losses, including for example: financial losses, cost and reputational damage to respond
to regulatory obligations, other costs associated with corrective measures, and loss from
damage or interruption to systems. Although Registrant has established procedures to
reduce the risk of cybersecurity incidents, there is no guarantee that these efforts will
always be successful, especially considering that Registrant does not directly control the
cybersecurity measures and policies employed by third-party service providers. Clients
could incur similar adverse consequences resulting from cybersecurity incidents that
more directly affect issuers of securities in which those clients invest, broker-dealers,
qualified custodians, governmental and other regulatory authorities, exchange and other
financial market operators, or other financial institutions.
Disclosure Statement. A copy of the Registrant’s written Brochure as set forth on Part
2A of Form ADV and Form CRS (Client Relationship Summary) shall be provided to
each client before, or contemporaneously with, the execution of the Asset Management
Agreement or Financial Planning and Consulting Agreement.
C. The Registrant shall provide investment advisory services specific to the needs of each
client. Before providing investment advisory services, an investment adviser
representative will ascertain each client’s investment objective(s). Thereafter, the
Registrant shall allocate and / or recommend that the client allocate investment assets
consistent with the designated investment objective(s). The client may, at any time,
impose reasonable restrictions, in writing, on the Registrant’s services.
D. The Registrant does not participate in a wrap fee program.
E. As of February 29, 2024, the Registrant had $255,258,995 in assets under management
on a discretionary basis.