This Disclosure document is being offered to you by Resolute Wealth Advisor, Inc. (“RWA”
or “Firm”) about the investment advisory services we provide. It discloses information
about our services and the way those services are made available to you, the client.
We are an investment management firm located in Findlay, Ohio. We make our advisory
services available to a wide variety of clients including, but not limited to, individuals, high
net worth individuals, employer sponsored retirement plans, trusts, charitable
organizations, corporations, and business entities. Our Firm became a registered
investment adviser in November 2017. Scott Hohman founded the firm and owns 100%
of the firm.
We are committed to helping clients build, manage, and preserve their wealth, and to
provide assistance that helps clients to achieve their stated financial goals. We will offer
an initial complimentary discovery meeting upon our discretion; however, investment
advisory services are initiated only after you and our firm executes an Investment
Management Agreement.
Investment and Wealth Management and Supervision Services
We manage advisory accounts on a discretionary and non-discretionary basis. For
discretionary accounts, once we have determined a profile and investment plan with a
client, we will execute the day-to-day transactions without seeking prior client consent.
Account supervision is guided by the written profile and investment plan of the client. We
primarily allocate client assets among various mutual funds, exchange-traded funds
(“ETFs”), cash, individual debt (bonds), equity securities, and where deemed appropriate
we will include alternative investments, in accordance with the clients stated investment
objectives. All of which are considered asset allocation categories for the client’s
investment strategy.
During personal discussions with clients, we determine the client’s objectives, time
horizons, risk tolerance and liquidity needs. As appropriate, we also review a client’s prior
investment history, as well as family composition and background. Based on client needs,
we develop and document in writing, a client’s personal profile and investment plan. We
then create and manage the client’s investments based on that policy and plan.
It is the client’s obligation to notify us immediately if circumstances have changed with
respect to their goals.
Once we have determined the types of investments to be included in your portfolio and
allocated them, we will provide ongoing investment review and management services.
This approach requires us to periodically review your portfolio.
If a discretionary relationship is in place, we will rebalance the portfolio, as we deem
appropriate, to meet your financial objectives. We trade these portfolios and rebalance
them based on the combination of our market views and your investment objectives,
using our investment process. We tailor our advisory services to meet the needs of our
clients and seek to ensure that your portfolio is managed in a manner consistent with
those needs and objectives.
For accounts designated as “non-discretionary,” RWA will render investment advice and
recommendations, but all investment decisions will be made by you, the client. No
purchase, sale, or other transaction(s) will be made with respect to any security or other
assets in the Account without your authorization. You retain control over all investment
decisions in your Account. You have the discretion to follow, or not to follow the
investment advice provided to you by RWA.
Where appropriate, we provide advice about any type of legacy position held in client
portfolios. Typically, these are assets that are ineligible to be custodied at our primary
custodian. Clients will engage us to advise on certain investment products that are not
maintained at their primary custodian, such as variable life insurance, annuity contracts
and assets held in employer sponsored retirement plans and qualified tuition plans (i.e.,
529 plans).
In all cases, you have a direct and beneficial interest in your securities, rather than an
undivided interest in a pool of securities. We do have limited authority to direct the
Custodian to deduct our investment advisory fees from your accounts, but only with the
appropriate written authorization from you.
You are advised and are expected to understand that our past performance is not a
guarantee of future results. Certain market and economic risks exist that adversely affect
an account’s performance. This could result in capital losses in your account.
Envestnet’s Private Wealth Management Program
Our Firm may utilize Envestnet’s Private Wealth Management Program (“Program”). We
will compile pertinent financial and demographic information to develop an investment
program that will meet your goals and objectives. Utilizing the Envestnet platform tools,
your assets will be allocated among the different options in the Program and determine
the suitability of the asset allocation and investment options, based on your needs and
objectives, investment time horizon, risk tolerance and any other pertinent factors.
Envestnet provides an extensive range of investment advisory services through their
platform. We will primarily be utilizing the Unified Management Account (“UMA”)
program. For those clients selecting the UMA program, you are offered access to an
actively managed investment portfolio chosen from a roster of independent asset
managers from a variety of disciplines. Unlike a mutual fund, where the funds are
commingled, a separately managed account is a portfolio of individually owned securities
that can be tailored to fit your investing preferences.
Envestnet will assist RWA in identifying individual asset managers and investment
vehicles that correspond to the proposed asset classes and styles Envestnet or RWA may
independently identify. Envestnet retains the independent asset managers for portfolio
management services in connection with the UMA program through separate
agreements entered into between Envestnet and these independent managers on terms
and conditions that Envestnet deems appropriate. For eligible accounts on the Envestnet
platform, clients may elect to enroll in the Tax and/or Impact Overlay services offered
directly by Envestnet.
Our Firm will provide you a Statement of Investment Selection (“SIS”). The SIS includes a
recommended asset allocation and investment recommendations for each asset
category. The SIS may refer to “SMA” as the Envestnet “Separate Accounts Program”.
The SIS is prepared by our Firm using the Envestnet platform software applications.
Among the factors considered in designing the strategy are historical rates of risk and
return for various asset classes, correlation across asset classes, and risk premium. RWA
will coordinate with Envestnet and recommend independent asset managers (“Sub-
Managers”) who will create a separate portfolio of individual managed securities to
correspond to proposed asset classes and styles for the Account. For certain asset classes
or styles, we may recommend the use of mutual funds or exchange traded funds (“ETFs”)
in lieu of Sub-Managers. Subject to the limitations described in your SIS and other
reasonable restrictions you may place on the SMA investments, RWA has discretion to
hire the selected Sub-Managers for the Account. The Sub-Managers have full authority
to supervise and direct investment of assets in the SMAs without your prior approval.
This investment authority includes purchases and sales of individual securities, options,
and alternative investments. You may modify the information in your investment profile
by contacting our Firm at any time. Changes in your investment profile may result in
changes to your SIS. For certain Sub-Managers, Envestnet has entered into an agreement
with the Sub-Manager. In these cases, Envestnet provides administrative and/or trading
services in accordance with the instructions of the Sub-Manager. Envestnet has the
authority at any time without your prior approval to hire Sub-Managers to manage the
SMA and to terminate Sub-Managers and replace Sub-Managers to manage the SMA
assets. We also have the authority to terminate a Sub-Manager and replace that Sub-
Manager with another Sub-Manager available under the Program. We have the authority
to buy, sell and exchange mutual fund shares and ETFs in the SMA without your prior
approval subject to the limitations and objectives in your SIS.
Our Firm may utilize Envestnet’s Fund Strategist Portfolios Program (“FSP”) most often
when a client does not meet the minimum asset size in an account to qualify for the UMA
minimums. When these FSPs are utilized, our Firm does not retain discretion over the
holdings in the FSP portfolio. For these FSP accounts, RWA will assist the client with
investment recommendations only. Ultimately, the client chooses the asset allocation or
strategy and the FSP Manager will execute the transactions and/or make any changes in
the account.
Advisor Credit Exchange, LLC (“ACX”)
Our Firm may introduce certain Clients to utilize the services of Advisor Credit Exchange,
LLC (“ACX”). ACX provides the Advisor access to a proprietary platform which enables
matching and pre-qualification of Clients with participating lenders based on credit
criteria. ACX offers access to various loans, including non-purpose, revolving line of credits
(herein “Lending Program”). In such instances, Client assets in their account[s] at the
Custodian will be utilized as collateral for the loan.
At no time will our Firm accept or maintain custody of a Client 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.
Financial Planning
Financial advisory services provided by us may include the analysis of your situation and
assistance in identifying and implementing appropriate financial planning and investment
management techniques to help you meet your specific financial objectives. Such services
may include a written financial analysis and specific or general investment and/or plan-
ning recommendations.
In preparing your financial plan, we may address five areas of financial planning. These
include financial planning, money management, tax, estate and insurance planning.
Our specific services in preparing your plan may include:
• Review and clarification of your financial goals.
• Assessment of your overall financial position.
• Development of a goal-oriented investment plan.
• Facilitate the implementation, in conjunction with your estate and/or corporate
attorneys as tax advisor, of an estate plan to provide for you and/or your heirs in
the event of an incapacity or death.
• Assisting in the development of a retirement plan, risk management plan and suc-
cession plan for your business, if applicable.
Employee Sponsored Retirement Plan Services
For employer-sponsored retirement plans with participant-directed investments, RWA
provides its advisory services as an investment advisor as defined under Section 3(21) and
3(38) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).
When serving as an ERISA 3(21) investment advisor, the plan sponsor and RWA share
fiduciary responsibility. The plan sponsor retains ultimate decision-making authority for
the investments and may accept or reject the recommendations in accordance with the
terms of a separate ERISA 3(21) Investment Advisor Agreement between RWA and the
plan sponsor. RWA provides the following services to the plan sponsor:
• Screen investments and make recommendations.
• Monitor the investments and suggests replacement investments when
appropriate.
• Provide an investment monitoring report at least annually.
• Assist the plan sponsor in developing an Investment Policy Statement (“IPS”).
• Provide a comprehensive fiduciary investment review designed to meet Plan
Sponsor fiduciary responsibility and enhance the participant experience. This
includes fiduciary education as requested by the Department of Labor (DOL).
When serving as an ERISA 3(38) investment manager, the plan sponsor is relieved of all
fiduciary responsibility for the investment decisions made by RWA. RWA is a discretionary
investment manager in accordance with the terms of a separate ERISA 3(38) Investment
Management Agreement between RWA and the plan sponsor. RWA’s investment
management is limited in that it has the discretion solely to replace funds in plan fund
lineups and initiate the transfer of existing balances to the replacements without prior
approval from the client.
RWA provides the following services to the plan sponsor:
• Select the investments.
• Monitor the investments, replace the investments and asset allocations when
appropriate.
• Provide an investment monitoring report at least annually.
• Assist the plan sponsor in developing an Investment Policy Statement (“IPS”).
• Provide a comprehensive fiduciary investment review designed to meet Plan
Sponsor fiduciary responsibility and enhance the participant experience. This
includes fiduciary education as requested by the Department of Labor (DOL).
Our goal in identifying the plan’s investment options is to provide a range of options that
will enable plan participants to invest according to varying risk tolerances, savings time
horizons or other financial goals. The plan’s investment options may consist of ETFs, CITs,
mutual funds, model portfolios, or other similar investment funds. The investment funds
from which our Firm will select from will be those that are available on the plan record-
keeper’s investment platform.
We provide Plan consulting services separately or combined. Clients may choose to use
any or all these services as indicated on the Investment Advisory Agreement with our
Firm.
Participant Education
For pension, profit sharing and 401(k) plan clients in self-directed plans, we may provide
periodic educational support, electronic educational materials and investment workshops
designed for the plan participants, if provided for in our agreement with the client. Topics
to be discussed will be determined in conjunction with the plan sponsor and in
accordance with guidelines established in ERISA Section 404(c). The educational support
and investment workshops will not provide plan participants with individualized, tailored
investment advice or individualized, tailored asset allocation recommendations.
Consulting
Our clients usually have other assets which are held away, where we are not the advisor
of record or otherwise associated with the account. In some cases, we provide clients
investment advice on existing
brokerage or retirement accounts, direct business with
mutual funds, shares directly issued to shareholders, individual bonds, securities
(including private placements) and real estate as well as insurance products such as
annuities.
We also provide clients investment advice on a more-limited basis on one-or-more
isolated areas of concern such as estate planning, real estate, retirement planning, or any
other specific topic. Additionally, we provide advice on non-securities matters about the
rendering of estate planning, insurance, Medicare, real estate, and/or annuity advice or
any other business advisory / consulting services for equity or debt investments in
privately held businesses. In these cases, you will be required to select your own
investment managers, custodian and/or insurance companies for the implementation of
consulting recommendations. If your needs include brokerage and/or other financial
services, we will recommend the use of one of several investment managers, brokers,
banks, custodians, insurance companies or other financial professional ("Firms"). You
must independently evaluate these Firms before opening an account or transacting
business and have the right to effect business through any firm you choose. You have the
right to choose whether to follow the consulting advice that we provide.
Disclosure Regarding Rollover Recommendations
We are fiduciaries under the Investment Advisers Act of 1940 and when we provide
investment advice to you regarding your retirement plan account or individual retirement
account, we are also 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. We have to act in your best interest and not put our
interest ahead of yours. At the same time, the way we make money creates some conflicts
with your interests.
A client or prospect 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) rollover 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). Our Firm may recommend an
investor roll over plan assets to an IRA for which our Firm provides investment advisory
services. As a result, our Firm and its representatives may earn an asset-based fee. In
contrast, a recommendation that a client or prospective client leave their plan assets with
their previous employer or roll over the assets to a plan sponsored by a new employer will
generally result in no compensation to our Firm. Our Firm therefore has an economic
incentive to encourage a client to roll plan assets into an IRA that our Firm will manage,
which presents a conflict of interest. To mitigate the conflict of interest, there are various
factors that our Firm will consider before recommending a rollover, including but not
limited to: (i) the investment options available in the plan versus the investment options
available in an IRA, (ii) fees and expenses in the plan versus the fees and expenses in an
IRA, (iii) the services and responsiveness of the plan’s investment professionals versus
those of our Firm, (iv) protection of assets from creditors and legal judgments, (v) required
minimum distributions and age considerations, and (vi) employer stock tax consequences,
if any. Our Firm’s Chief Compliance Officer remains available to address any questions that
a client or prospective client has regarding the oversight.
Wrap Fee Program
We do not sponsor a wrap fee program.
Assets
As of December 31, 2022, our firm has a total of $169,339,312 in assets under our
management. We manage $121,302,751 on a discretionary basis and $48,036,561 on a
non-discretionary basis.
ITEM–5 - FEES AND COMPENSATION
Investment Management Fees and Compensation
Our Firm charges a fee as compensation for providing investment management services
on your account. These services include advisory services, trade entry, investment
supervision, and other account-maintenance activities. Our custodian may charge
custodial fees, redemption fees, retirement plan and administrative fees. See Additional
Fees and Expenses below for additional details.
The fees for investment management are based on an annual percentage of assets under
management and are applied to the household asset value on a pro-rata basis and billed
quarterly in arrears. The initial fee will be based upon the average daily balance of the
partial quarter, prorated for the number of days in the quarter that your account is under
our management. Thereafter, the quarterly fee will be calculated on the average daily
balance of the portfolio during the calendar quarter. The average daily balance will be
determined as reported by the Custodian. Fees are assessed on all assets under
management, including securities, cash and money market balances. When applicable
and noted in Appendix A of the Investment Management Agreement, legacy positions will
also be excluded from the fee calculation.
Our tiered fee schedule for investment management is as follows:
$0-$499,999 1.00%
$500,000-$1,999,999 0.75%
$2,000,000-$4,999,999 0.50%
$5,000,000-$9,999,999 0.25%
$10,000,000 and up 0.20%
The specific advisory fees are set forth in your Investment Advisory Agreement. Fees may
vary based on the size of the account, complexity of the portfolio, extent of activity in the
account or other reasons agreed upon by us and you as the client. In certain
circumstances, our fees and the timing of the fee payments may be negotiated.
Unless otherwise instructed by the Client, we will aggregate related client accounts for
the purposes of determining the account size and annualized fee. The common practice
is often referred to as “house-holding” portfolios for fee purposes and may result in lower
fees than if fees were calculated on portfolios separately. Our method of house-holding
accounts for fee purposes looks at the overall family dynamic and relationship.
The independent qualified custodian holding your funds and securities will debit your
account directly for the advisory fee and pay that fee to us. You will provide written
authorization permitting the fees to be paid directly from your account held by the
qualified custodian. Further, the qualified custodian agrees to deliver an account
statement to you on a quarterly basis indicating all the amounts deducted from the
account including our advisory fees.
Either RWA or you may terminate the management agreement immediately upon written
notice to the other party. The management fee will be pro-rated to the date of
termination, for the quarter in which the cancellation notice was given and the unearned
fee billed to you. Upon termination, you are responsible for monitoring the securities in
your account, and we will have no further obligation to act or advise with respect to those
assets. For clients whose agreements terminate due to death, Resolute Wealth will waive
any earned fees that have not been billed as of the date of death.
Envestnet’s Private Wealth Management Program
The Envestnet Program Fee is calculated by applying the applicable annual fee schedule
in the SIS to the asset value of the Account assets invested in a Program option. The value
of the Account assets is determined quarterly on an Account-by-Account basis and not in
the aggregate. The initial Program Fee will equal (on an annualized basis) the percentage
(as set forth in the fee schedule in the SIS) of the fair market value of the Account in the
applicable category. In addition to the investment management fee, Envestnet’s program
will not exceed 0.60%. RWA or Envestnet will instruct the Account custodian to deduct
the Program Fees from the Account(s). The Program Fee is debited from an Account(s)
on a quarterly basis in advance. You are responsible for verifying the accuracy of the
Program Fee calculation. Envestnet receives a portion of the Program Fee for the
investment management and/or administrative services it provides to the Accounts. Fees
due Sub-Managers and any third-party service providers retained by Envestnet in
connection with the Program are paid by Envestnet. The amount of the Program Fees
that are billed for providing investment advisory and/or management services to an
Account varies depending upon the type of Account, the number of Sub-Managers used
in an SMA, the number of model portfolios utilized, and in some cases the trading activity
in the Account.
Employee Sponsored Retirement Plan Fees
We charge an annual fee as negotiated with the client and disclosed in the Employer
Sponsored Retirement Plans Investment Advisory Agreement. The compensation method
is explained and agreed upon in advance before any services are rendered. Fees for
Retirement Plans are as follows:
First $999,999 0.75%
$1,000,000-$3,999,999 0.35%
$4,000,000-$7,999,999 0.25%
$7,000,000-$9,999,999 0.20%
Amounts Over $10,000,000 0.15%
Plan advisory services begin with the effective date of the Investment Advisory
Agreement, which is the date you sign the Investment Advisory Agreement. For that
calendar month or quarter, fees will be adjusted pro rata based upon the number of
calendar days in the calendar month or quarter that the Agreement was effective. Our fee
is generally billed in arrears on the last business day of the calendar month or quarter, as
indicated on the Advisory Agreement Appendix A and as agreed to by the Custodian of
the Plan. For Plans where our fee is billed to the custodian, the fee is deducted directly
from the participant accounts. Written authorization permitting us to be paid directly
from the custodial account is outlined in the Investment Advisory Agreement.
Either party may terminate the Investment Advisory Agreement at any time upon
immediate notice. You are responsible to pay for services rendered until the termination
of the agreement. We never receive prepayment of more than $1200 in fees per client,
six (6) or more months in advance of providing any services.
Advisor Credit Exchange, LLC (“ACX”) Fees
RWA does not receive a referral fee for each loan referred through ACX. Our Firm may
refer Clients to a Lending Program, as detailed in Item 4 - Advisory Services. However, you
are not required to use ACX and may select any lender of your choosing.
Additionally, our Firm is entitled to receive investment advisory fees for managing the
collateralized assets in the Client account(s). Clients are not obligated to engage our firm
for the Lending Program.
For additional information related to the risks involved non-purpose loans and lines of
credit, please see Item 8 - Methods of Analysis, Investment Strategies and Risk of Loss.
Financial Planning & Consulting Fees
Our firm also provides financial plans consistent with your individual financial and
risk/reward objectives and consulting services. Planning may focus on investments,
insurance, taxes and/or estate plans. Our fixed fees range from $2,500 to $15,000. Fees
are negotiable. Any fees agreed to will be documented in writing and acknowledged with
the client’s signature.
We may collect a portion of the estimated fee in advance as a retainer and will bill for
actual hours in arrears of the project. The fee for a financial plan is a one-time service. You
are encouraged to update financial plans on an annual basis. Our fee for a financial plan
is in addition to commissions, advisory fees and consulting fees to be received for
implementing any recommendations made under the plan. Fees more than $1,200 are
not collected for services to be performed more than six months in advance.
The agreement may be terminated by either party at any time. Notice may be
communicated by electronic mail or phone and confirmed in writing. A refund of the
unearned fees will be made based on time and effort expended before termination. The
Agreement terminates upon delivery of the financial plan or the completion of the
project. After the financial plan has been delivered or the consulting project completed,
no refunds will be made, and all fees are due and payable.
Administrative Services
We have contracted with Tamarac to utilize a technology platform to support data
reconciliation, performance reporting, fee calculation and billing, research, client
database maintenance, quarterly performance evaluations, payable reports, web site
administration, trading platforms, and other functions related to the administrative tasks
of managing client accounts. Due to this arrangement, Tamarac will have access to client
accounts, but will not serve as an investment advisor to our clients. RWA and Tamarac
are non-affiliated companies. Our Firm pays an annual fee for each account administered
by Tamarac. Please note that the fee charged to the client will not increase due to the
annual fee RWA pays to Tamarac, the annual fee is paid from the portion of the
management fee retained by RWA.
There may be a possibility for price or account value discrepancies due to quarter-end
transactions in an account. Dividends or trade date settlements may occur, and our third-
party billing software may report a slight difference in account valuation at quarter end
compared to what is reported on your statement from the Custodian. Our firm has the
ability to produce billing summaries, which can be provided upon request.
Additional Fees and Expenses:
In addition to the advisory fees paid to our Firm, clients may also incur certain charges
imposed by other third parties, such as broker-dealers, custodians, trust companies,
banks and other financial institutions (collectively “Financial Institutions”). These
additional charges may include securities, transaction fees, custodial fees, fees charged
by the Independent Managers, charges imposed directly by a mutual fund or ETF in a
client’s account, as disclosed in the fund’s prospectus (e.g., fund management fees and
other fund expenses), deferred sales charges, odd-lot differentials, transfer taxes, wire
transfer and electronic fund fees, and other fees and taxes on brokerage accounts and
securities transactions. RWA’s brokerage practices are described at length in Item 12,
below. Neither our Firm nor its supervised persons accept compensation for the sale of
securities or other investment products. Further, our firm does not share in any of these
additional fees and expenses outlined above.