A. Sterling Financial Planning, Inc. (“Sterling”) is a New Jersey corporation formed on November 20,
1992. Sterling became registered as an investment adviser in February 1993. Nicholas A. Nicolette,
President and Chief Compliance Officer, and Matthew Hannum, Corporate Secretary, are Sterling’s
principal owners.
B. Sterling offers to provide investment advisory services, retirement plan consulting services, and
financial planning and related consulting services to its clients, who generally include individuals, high
net worth individuals, pension and profit sharing plans, trusts, and estates.
INVESTMENT ADVISORY SERVICES
Clients can engage Sterling to provide discretionary or non-discretionary investment advisory services
according to the terms and conditions of an Investment Advisory Agreement. Sterling’s annual
investment advisory fee is based upon a percentage of the market value of the assets placed under
Sterling’s management.
Sterling’s investment advisory services are specifically tailored to the needs of each client. To begin
the process an investment adviser representative will collaborate with the client to develop investment
objectives, which are based upon an assessment of factors that typically include: capital preservation;
risk tolerance; income production; liquidity requirements; client preferences; asset and liability levels;
and investment restrictions. The client’s investment objectives are established, and a compatible
investment strategy and plan are then implemented. Clients may, at any time, impose restrictions in
writing on investing in certain securities or types of securities. Sterling currently allocates or
recommends that clients allocate investment assets among various mutual funds, exchange traded funds
(“ETFs”), individual debt, and individual equity securities, in accordance with the client’s designated
investment objectives. Once client investment assets are allocated, Sterling provides ongoing
monitoring and review of account performance and asset allocation as compared to client-designated
investment objectives and may recommend or execute account transactions as a result of those reviews
or other triggering events.
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
Sterling offers financial planning and consulting services (including investment and non-investment
related matters, including estate planning, insurance planning, etc.) under the terms and conditions of
a Financial Planning and Consulting Agreement. This Agreement sets forth the terms and conditions
of the engagement including the scope of services and the portion of the fee that is due from the client
to begin the engagement.
RETIREMENT PLAN CONSULTING SERVICES
Sterling provides retirement plan consulting services under ERISA §3(21). In this capacity, Sterling
assists sponsors of self-directed retirement plans with the selection and/or monitoring of investment
alternatives from which plan participants choose in self-directing the investments for their individual
plan retirement accounts. The plan sponsor or administrator ultimately decides whether and how to
implement these recommendations. In addition, to the extent requested by the plan sponsor, Sterling
will also provide participant education designed to help participants identify the appropriate investment
strategy they choose to employ for their retirement plan accounts. The plan participants are responsible
for any individual investment selections made under the plan. When providing services under ERISA
§3(21), Sterling does not exercise discretionary authority or control of plan assets or administration of
the plan.
If the plan sponsor engages Sterling in an ERISA §3(38) capacity, Sterling may provide the same
services as described above, but may also manage plan assets on a discretionary basis, develop asset
allocation models that Sterling manages on a discretionary basis, which plan participants may choose
in managing their individual retirement account, or modify the investment options made available to
plan participants on a discretionary basis.
MISCELLANEOUS
Limitations of Financial Planning and Non-Investment Consulting/Implementation Services. Sterling
does not serve as a law firm or accounting firm, and no portion of its services should be construed as
legal or accounting services. Accordingly, Sterling does not prepare estate planning documents or tax
returns. Unless specifically agreed in writing, neither Sterling nor its representatives are responsible to
implement any financial plans or financial planning advice; provide ongoing financial planning
services; or provide ongoing monitoring of financial plans or financial planning advice. The client is
solely responsible to revisit the financial plan or financial planning advice with Sterling, if desired. The
client retains absolute discretion over all financial planning and related implementation decisions
and
is free to accept or reject any recommendation from Sterling and its representatives in that respect.
Sterling’s financial planning and consulting services are completed upon communicating its
recommendations to the client, upon delivery of the written financial plan, or upon termination of the
applicable agreement. Upon client request, Sterling may recommend the services of other professionals
for certain non-investment implementation purposes (i.e., attorneys, accountants, insurance agents,
etc.). Clients are under no obligation to engage the services of any recommended professional, who are
responsible for the quality and competency of the services they provide. Please refer to Item 10.C.
below for additional information about Sterling’s President and Chief Compliance Officer, Nicholas
Nicolette, serving as a licensed insurance agent.
Retirement Plan Rollovers – No Obligation / 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 Sterling recommends that a
client roll over their retirement plan assets into an account to be managed by Sterling, such a
recommendation creates a conflict of interest if Sterling will earn a new (or increase its current)
advisory fee as a result of the rollover. No client is under any obligation to roll over retirement plan
assets to an account managed by Sterling.
ERISA / IRC Fiduciary Acknowledgment. When Sterling provides investment advice to a client about
the client’s retirement plan account or individual retirement account, it does so as a fiduciary within the
meaning of Title I of the Employee Retirement Income Security Act (“ERISA”) and/or the Internal
Revenue Code (“IRC”), as applicable, which are laws governing retirement accounts. Because the way
Sterling makes money creates some conflicts with client interests, Sterling operates under a special rule
that requires it to act in the client’s best interest and not put its interests ahead of the client’s. Under
this special rule’s provisions, Sterling must: meet a professional standard of care when making
investment recommendations (give prudent advice); never put its financial interests ahead of the client’s
when making recommendations (give loyal advice); avoid misleading statements about conflicts of
interest, fees, and investments; follow policies and procedures designed to ensure that Sterling gives
advice that is in the client’s best interest; charge no more than is reasonable for Sterling’s services; and
give the client basic information about conflicts of interest.
Portfolio Trading Activity / Inactivity. As part of its investment advisory services, Sterling will review
client portfolios on an ongoing basis to determine if any trades are necessary based upon various factors,
including but not limited to investment performance, fund manager tenure, style drift, account
additions/withdrawals, the client’s financial circumstances, and changes in the client’s investment
objectives. Based upon these and other factors, there may be extended periods of time when Sterling
determines that trades within a client’s portfolio are not prudent. Clients nonetheless remain subject to
the fees described in Item 5 during periods of portfolio trading inactivity.
Client Obligations. When performing its services, Sterling is not required to verify any information
received from the client or from the client’s designated professionals and is expressly authorized to rely
on that information. Clients are responsible to promptly notify Sterling if there is ever any change in
their financial situation or investment objectives for the purpose of reviewing or amending Sterling’s
services or previous recommendations.
C. Sterling provides investment advisory services tailored to the specific needs of each client. Before
providing investment advisory services, an investment adviser representative will coordinate with
clients to develop their investment objectives. Sterling will then allocate or recommend that clients
allocate investment assets consistent with the designated investment objectives. The client may, at any
time, impose reasonable restrictions, in writing, on Sterling’s services.
D. Sterling does not participate in a wrap fee program.
E. As of December 31, 2023, Sterling had $405,007,071 in assets under management on a discretionary
basis and $218,202,698 in assets under management on a non-discretionary basis.