General Information
Kelman-Lazarov (“K-L”) places the Client and the Financial Advisor (“FA”) as partners in the center of every
decision made as a firm. K-L develops products, services, and technologies to allow K-L FAs to provide the
highest quality service to Clients.
Owners Ronald J. Lazarov and Martin S. Kelman have offered customized and confidential financial planning
and investment advisory services since 1979 and 1981, respectively. K-L became registered as an investment
adviser with the Securities and Exchange Commission effective December 7, 1993.
Please see the Brochure Supplements (Form ADV Part 2B) for more information on these principal owners and
other individuals who formulate investment advice and have direct contact with Clients or have discretionary
authority over Client accounts.
As of December 31, 2023, K-L managed $646,843,637 on a discretionary basis and did not manage any assets
on a non-discretionary basis.
Asset Management Services
K-L Asset Management Program
K-L offers Clients a fully discretionary managed account solution that begins with the FA getting to know the
Client and listening to their needs and objectives. During the preliminary discussions, the FA will obtain
information from the Client about the Client’s family and financial situation, the investment objective, tolerance
for risk, investment time horizon, and other pertinent information (“Suitability Information”).
The FA will assist the Client to identify a suitable allocation of the Client’s assets across a variety of asset classes,
including, but not limited to, equities, fixed income, and cash, depending on the Client’s financial situation,
investment objectives and tolerance for risk, among other factors. This dialogue with the Client will help the FA
to identify the K-L model portfolio that reflects the appropriate asset class, allocated in such proportions, most
closely aligned with the Client’s objectives for income, growth, risk/volatility, and other key parameters. Clients
may impose restrictions on investing in certain securities or types of securities in their account, but because of
the limited number of Exchange-Traded Funds (“ETF”) and mutual funds available in each class, such
restrictions may prevent a client from investing in certain models managed by K-L.
Unless K-L believes there is a benefit to the Client to invest in a different share class, K-L will usually select the
lower cost option for the Client. In certain cases, K-L may seek ETFs and mutual funds that are available on a
no transaction fee (“NTF”) basis. The lack of transaction fee allows for cost-effective and efficient management,
especially on small positions in the portfolio, although the NTF funds used may carry a higher expense ratio. K-
L’s investment team will monitor changes in the markets or custodial arrangements that may result in more
efficient or lower cost share classes or ETFs that trade commission-free and evaluate whether the investment
objectives can be accomplished at a lower cost. The decision on which share class or fund will be the most
efficient and cost-effective will be at K-L’s investment team’s sole discretion. K-L does not benefit financially
from using share classes that have 12b-1 fees, regardless of share class or cost associated with the fund.
K-L’s investment team will review a client’s legacy position to identify any that can be used to implement the
existing asset classes of the model portfolio. The determination of legacy positions that may be used to
implement the model is based on a number of factors, including the efficiency and cost of trading the positions
through K-L’s existing broker-dealer relationships and platform, the research available to K-L and K-L’s familiarity
with the issuer and the portfolio managers. Ultimately, however, the decision shall be at K-L’s sole discretion.
Clients whose assets started in either the Traditional or Select Asset Management Programs prior to 2023
(“Legacy Accounts”) and who do not wish to transition to the current model portfolio will be able to maintain a
managed account at K-L. For those Clients the FA identifies it may be beneficial to transition to this current
model, the process will be discussed with the Client to determine if the Client agrees. If so, a timeframe over
which the transition will occur will also be discussed with the Client.
K-L also provides its asset management services through the following legacy programs:
• Kelman-Lazarov Traditional Asset Management Program
• Kelman-Lazarov Select Asset Management Program
Traditional Asset Management Program
Through the Traditional Asset Management Program, K-L offers Clients a fully discretionary managed account
solution that begins with the FA getting to know the Client and listening to their needs and objectives. During the
preliminary discussions, the FA will obtain information from the Client about the Client’s family and financial
situation, the investment objective, tolerance for risk, investment time horizon, and other pertinent information
(“Suitability Information”).
The FA will assist the Client to identify a suitable allocation of the Client’s assets across a variety of asset classes,
including equities, fixed income, and cash, depending on the Client’s financial situation, investment objectives
and tolerance for risk, among other factors. This dialogue with the Client will help the FA to identify the K-L model
portfolio that reflects the appropriate asset classes, allocated in such proportions, most closely aligned with the
Client’s objectives for income, growth, risk/volatility, and other key parameters. Clients may impose restrictions
on investing in certain securities or types of securities in their account, but because of the limited number of
Exchange-Traded Funds (“ETF”) and mutual funds available in each asset class, such restrictions may prevent
a Client from investing in certain models managed by K-L.
K-L’s investment team will review a Client’s legacy positions to identify any that can be used to implement the
existing asset classes of the model portfolio. The determination of legacy positions that may be used to
implement the model is based on a number of factors, including the efficiency and cost of trading the positions
through K-L’s existing broker-dealer relationships and platform, the research available to K-L and K-L’s familiarity
with the issuer and the portfolio managers. Ultimately, however, the decision shall be at K-L’s sole discretion.
For Clients whose assets started in the Traditional Program prior to 2018 (“Legacy Accounts”), portfolios were
invested in a model that included target weights and securities, with a variety of securities. Clients who do not
wish to transition to the current model portfolio will be able to maintain a managed account at K-L. For those
Clients the FA identifies that it may be beneficial to transition to one of the current models, the process will be
discussed with the Client to determine if the Client agrees. If so, a timeframe over which the transition will occur
will also be discussed with the Client.
Select Asset Management Program
Generally, accounts with assets of less than $250,000.00 participate in the Select Asset Management Program.
The Select Program is a discretionary managed account program that also uses model portfolios and seeks to
identify an appropriate allocation of the Client’s portfolio among the key asset classes after assessment of the
Client’s financial circumstances and pertinent Suitability Information. To maintain a cost-effective program for
these smaller accounts, K-L generally seeks ETFs and mutual funds that are available on a no transaction fee
(“NTF”) basis. The lack of a transaction fee allows for cost-effective and efficient management of these accounts,
although the mutual funds used carry higher expense ratios. K-L does not receive any portion of the expense
ratios charged by the ETFs or mutual funds. The Client will be contacted periodically to determine whether to
update the Client’s financial information previously provided and determine whether any changes should be
made to the Client’s Investment Policy Statement (IPS), asset allocation, risk tolerance, or other factors
pertaining to the continued suitability.
Please refer to the relevant prospectus (or if available, summary disclosure) for a complete description of all fees
and charges associated with investing in each ETF or mutual fund.
Participating in the K-L Asset Management Programs
To participate in any K-L Asset Management Program, the Client must enter into an Asset Management Services
Agreement (“Contract”) describing K-L’s advisory services, the fees that will be charged, and other important
terms of the relationship. The Client must enter into an agreement with a “qualified custodian” that will maintain
the assets to be managed (the “Managed Assets”) in an account (the “Managed Account”) in the Client’s name. K-
L utilizes and recommends the custodial and brokerage services of Charles Schwab & Co. (“Schwab”) to serve
as qualified custodian for the Managed Account.
K-L will manage the Managed Account on a discretionary basis and will have the authority to direct the
investment and re-investment
of the Managed Assets without prior consultation with the Client. K-L may offer
non-discretionary asset management services on a limited basis, at the discretion of the firm. Clients with non-
discretionary arrangement must be contacted prior to the execution of any trade, which may result in a delay in
executing the recommended trades. Clients with non-discretionary arrangements retain the responsibility for the
final decision on all actions taken within the account.
Client or K-L may terminate the Contract at any time upon notification to the other party. Upon termination, any
fees paid in advance will be prorated to the date of termination and any excess will be promptly refunded to the
Client. Any fees due for services rendered or work performed for which a fee was not collected will be due and
payable.
Clients should inform either their FA or K-L 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 the potential impact can be evaluated, and any
appropriate changes can be made. Unless and until the Client notifies K-L in writing to designate a different
model portfolio for the Managed Account or notifies K-L of material changes in their Suitability Information or
notifies K-L to impose reasonable restrictions on the investment of their Account, K-L will continue to manage
the Managed Account according to the Suitability Information in K-L’s records.
Personalized Equity Portfolios
K-L may, at its discretion, work with a third-party platform to construct direct indexing strategies for the Client.
Direct indexing is a method of investing where one or more broad indexes is replicated or mimicked by
purchasing numerous individual stock positions. In taxable accounts, a strategy of tax loss harvesting is often
employed in direct indexing accounts. Certain deviations from strictly mimicked indexes may be present to
accommodate previously held low-basis stock positions in clients’ accounts, or their stated values-based
investing preferences.
K-L’s investment team and FAs will evaluate whether the Client’s unique financial situation dictates participation
in the direct indexing strategies. Clients who participate in the direct indexing strategies offered by third-party
platforms may be subject to the third-party’s program fees in addition to K-L’s established annual advisory fee
shown on the Client’s advisory agreement. K-L’s investment team will regularly evaluate various platforms for
their capabilities and costs and decide which platforms can accomplish the goals of the stated direct indexing
strategy efficiently and at a low cost to the Client. Because third-party platforms can change based on
capabilities, K-L will provide the Client with all pertinent information about the program, including the program
fee, prior to the Client’s enrollment and through a separate third-party agreement. K-L does not benefit financially
from third parties that charge their own separate program fee for direct indexing strategies.
Retirement Plan Services
K-L may provide retirement plan advisory services to Plans and Plan Fiduciaries on a discretionary or non-
discretionary basis. The Employee Retirement Income Security Act of 1974 (“ERISA”) sets forth rules under
which Plan Fiduciaries may retain investment advisers for various types of services with respect to Plan assets.
For certain services, K-L may be considered a fiduciary under ERISA. For example, to the extent that the Plan
Fiduciaries retain K-L to act as an investment manager within the meaning of ERISA §3(21) or ERISA §3(38), K-
L will provide non-discretionary or discretionary services, respectively.
Retirement Plan Consulting Services
K-L may provide Retirement Plan Consulting Services to Plans and Plan Fiduciaries on a non-discretionary basis.
The appropriate Plan Fiduciary designated in the Plan documents (e.g., the Plan sponsor or named fiduciary)
will (i) make the decision to retain the firm; (ii) agree to the scope of the services that K-L will provide; and (iii)
make the ultimate decision as to accepting any of the recommendations that K-L may provide.
Advice is limited to asset class and investment recommendations. K-L will provide Plan Fiduciaries with
recommendations of investment options consistent with any Investment Policy Statement of the Plan. Plan
Fiduciaries retain responsibility for the final determination of investment options and for compliance with ERISA
section 404(c). K-L will assist in monitoring the plan’s investment options and will make recommendations to
maintain or remove and replace investment options. The Plan Fiduciaries are free to seek independent advice
about the appropriateness of any recommendations made for the Plan. Retirement Plan Consulting Services
may be offered individually or as part of a comprehensive suite of services.
Retirement Plan Management Services
K-L may provide Retirement Plan Management Services to Plans and Plan Fiduciaries on a discretionary basis.
When retained as an investment manager within the meaning of ERISA §3(38), K-L provides continuous and
ongoing supervision over the designated retirement plan assets. K-L will actively monitor the designated
retirement plan assets and provide ongoing management of the assets. When applicable, K-L will have
discretionary authority to make all decisions to buy, sell, or hold securities, cash or other investments for the
designated retirement plan assets in its sole discretion without first consulting the Plan Fiduciaries. K-L may also
have the power and authority to carry out these decisions by giving instructions, on the Plan Fiduciary’s behalf,
to brokers and dealers and qualified custodian(s) of the Plan for the management of the designated retirement
plan assets. K-L will monitor the investment options of the Plan and add or remove investment options for the
Plan without prior consultation with the Plan Fiduciaries.
Education and Enrollment Services
Participation Education
K-L will provide education services to Plan Participants about general investment principles and the investment
alternatives available under the Plan. Education presentations will not take into account the individual
circumstances of each Plan Participant.
Participant Enrollment
K-L will assist with group enrollment meetings designed to increase Retirement Plan participation among
employees and to improve the investment and financial understanding of employees.
Financial Planning
Financial planning may consist of a number of services, depending on the Client’s needs. The planning process
evaluates a Client’s current financial situation and proposes an action plan to help move towards setting and
achieving the Client’s financial goals. K-L has conversations with the Client and reviews documents, such as
income tax returns and current investments, to determine a Client’s current financial situation and long-term
financial goals. Detailed information such as risk tolerance, time horizon, estate and retirement plans, trust
agreements, wills and insurance may also be collected to help better complete a financial plan.
Next, the planning process identifies potential impediments to achieving the goals, as well as options for
furthering the goals of the Client. A financial plan is developed with recommendations to help achieve the
identified financial goals and is presented to the Client for consideration. Typically, K-L uses computer software
as part of the financial planning process.
Clients may retain K-L to prepare a full financial plan, or to only give advice about a particular area of concern.
Areas to be addressed may include, but are not limited to, retirement planning, funding of education, estate
planning, insurance needs (disability, long-term care, and life insurance), and investment asset allocation. Clients
do not have to act on the plan’s recommendations, nor use K-L to implement any recommendations. Clients
may, however, retain K-L to help implement the plan. If the Client chooses to purchase securities or insurance
products through K-L, the firm will receive commissions or other compensation as a result of those investments.
K-L may recommend seeking additional advice from an estate planning and/or tax professional as appropriate.
K-L does not provide any tax or legal advice to Clients.
Consulting Services
K-L may provide consulting services to Clients on specific financial matters, including, but not limited to, providing
defined contribution allocation recommendations, distribution planning, and financial matters arising due to life-
changing events. Where K-L provides general consulting services, K-L will work with the Client to prepare an
appropriate summary of the specific project(s) to the extent necessary or advisable under the circumstances.
The terms and conditions of the arrangement and the fees to be charged will be negotiated on a case-by-case
basis. Advice given will be limited to the specific issues initially agreed upon.
If Clients choose to execute any transactions recommended by the FA, they are under no obligation to implement
any given recommendations through K-L.