Allegheny Financial Group, LTD (“Allegheny”) is a registered investment adviser which offers asset
management services based on the individual needs of the client. This Brochure provides a
description of the advisory services offered under the Allegheny Financial Group Wrap Fee Program.
For more information about Allegheny’s other investment advisory services, please contact your
advisor for a copy of a similar brochure that describes such services or go to
www.adviserinfo.sec.gov.
Services
Investment Management and Financial Planning
Allegheny provides comprehensive portfolio management and financial planning services. Clients
selecting this service are charged a portfolio management fee, described in Item 5 below. Allegheny
provides continuous advice to a client regarding the investment of client funds based on the
individual needs of the client. Through personal discussions in which goals and objectives based on a
client's particular circumstances are established, we develop a client's personal investment strategy
and create and manage a portfolio based on that strategy. During our data gathering process, we
determine the client’s individual objectives, time horizons, risk tolerance and liquidity needs. As
appropriate, we also review and discuss a client's prior investment history, as well as family
composition and background. Clients will receive reports reflecting the value and status of their
uniquely designed portfolio.
Selecting fund managers is a large part of our service as an advisory firm. Allegheny uses original
and proprietary investment research conducted by the firm’s research department and investment
committee. We manage advisory accounts on a discretionary or non-discretionary basis. Clients
may impose reasonable restrictions on investing in certain securities, types of securities, or industry
sectors. Account supervision is guided by the client's stated goals, objectives, risk tolerance, as well
as tax considerations.
In cases where the Client has selected non-discretionary management, the implementation of any or
all recommendations is solely at the discretion of the Client. Allegheny will work with the client to
create a client profile based on the client’s investment objectives and situation. Recommendations in
mutual funds, stocks, bonds or other assets of any kind will be consistent with the client’s investment
objectives and restrictions set forth in the client profile and implementation of those
recommendations will be on direction from the client. Additionally, clients may place unsolicited
trades in their account.
Clients receiving these services participate in Allegheny’s Wrap Fee Program for which Allegheny
receives a fee. See the Allegheny Wrap Fee Brochure for additional details.
Streamlined Account Management (“SAM”)
Allegheny offers Streamlined Account Management (“SAM”) as a solution for clients who have lower
asset levels or do not engage Allegheny for financial planning services. We manage SAM accounts on
a discretionary basis. Clients selecting this service are charged a percentage of the value of billable
assets listed on the Investment Management Agreement and will be billed quarterly or semi-
annually.
The following services are included with the SAM program:
Investment Strategy - Develop and implement an investment strategy by selecting positions
and controlling risk through diversification of assets and perform ongoing monitoring of the
strategy in relation to the criteria provided by the Client.
Performance Reports - Prepare periodic reports reviewing the performance of the
investment portfolio, as well as comparing the performance thereof to benchmarks with
Client. The information used to generate the reports will be derived directly from
information such as statements provided by Client, investment providers, and/or third
parties.
Other Services - other tasks and administrative services required in connection with opening,
closing and managing the Client’s accounts, assisting with distributions and other assistance
as required.
Clients receiving these services participate in Allegheny’s Wrap Fee Program for which Allegheny
receives a fee. See the Allegheny Wrap Fee Brochure for additional details.
Effective in 2023 Allegheny will be opening new wrap fee program accounts and transitioning their
existing advisory clients in stages to the Fidelity Advisory platform.
Assets for new and transitioned accounts are held at Fidelity Brokerage Services (“Fidelity”) a FINRA
registered broker- dealer, member SIPC. Fidelity acts as custodian and executing broker-dealer for
transactions placed in program accounts and provides other administrative services as described
throughout this Brochure. You cannot request that your orders be executed through another broker-
dealer as part of the wrap fee program. Clients should understand that not all advisors require their
clients to select a certain broker. By selecting Fidelity as the broker, clients may be unable to achieve
the most favorable execution of client transactions. Therefore, this practice may cost clients more
money. Clients will be subject to separate fees and expenses charged by Fidelity. Allegheny receives
support services and/or products from Fidelity, many of which assist Allegheny to better monitor
and service program accounts maintained at Fidelity however, some of the services and products
benefit Allegheny and not client accounts.
Assets for legacy accounts are held at National Financial Services (“NFS”), a FINRA registered broker-
dealer, member SIPC. NFS acts as custodian and executing broker-dealer for transactions placed in
program accounts and provides other administrative services as described throughout this Brochure.
You cannot request that your orders be executed through another broker-dealer. Allegheny is the
introducing broker-dealer for legacy program accounts. Effective August 1, 2023, Allegheny will no
longer without prior authorization open new client brokerage accounts through NFS utilizing
Allegheny’s affiliated broker dealer as introducing broker. Since associated persons of Allegheny
are registered with the broker-dealer, this presents a conflict of interest. Clients should understand
that not all advisors require their clients to select a certain broker. By selecting Allegheny/NFS as the
broker, clients may be unable to achieve the most favorable execution of client transactions.
Therefore, this practice may cost clients more money. Clients will be subject to separate fees and
expenses charged by NFS. Allegheny receives support services and/or products from NFS, many of
which assist Allegheny to better monitor and service program accounts maintained at NFS; however,
some of the services and products benefit Allegheny and not client accounts.
Fees
In the Allegheny Financial Group Wrap Fee Program, clients pay Allegheny a single advisory fee
for advisory services and execution of transactions. Clients do not pay brokerage commissions,
markups or transaction charges for execution of transactions in addition to the advisory fee. The
advisory fee is negotiable between the client and Allegheny and is set out in the advisory
agreement. The advisory fee is a percentage based on the value of all assets in the account,
including cash holdings. The maximum advisory fee for newly executed advisory agreements is
1.00%. The advisory fee may be higher than the fee charged by other investment advisors for
similar services. The advisory fee is paid to Allegheny. Allegheny does not accept performance-
based fees for program accounts.
The advisory fee is deducted from the account by NFS for legacy accounts and by Fidelity for new
and transitioned accounts and paid to Allegheny based on a written authorization from the client.
Allegheny calculates the advisory fee in advance and provides the debit instruction to the
custodian based on the billing frequency stated in the advisory agreement; typically, semi-
annually or annually. In limited circumstances, clients are invoiced for their fees. If the advisory
agreement is terminated before the end of the period, client is entitled to a pro-rated refund of
any pre-paid advisory fee based on the number of days remaining in the billing period after the
termination date.
Portfolio Management (PMA)
Portfolio management fees are calculated as a percentage of assets under management and
generally billed at least semi-annually. Fees are billed in advance or arrears, in accordance with the
terms of the portfolio management agreement. Instructions will be provided to the client’s qualified
custodian to have the advisory fees deducted from your account. In limited circumstances, Allegheny
invoices clients for their fees as described in the client’s portfolio management agreement. The
following are the portfolio management fees payable by the client to Allegheny:
1.00% on the first $2,500,000 of assets under management
0.65% on the amount from $2,500,000 to $5,000,000
0.50% on the amount from $5,000,000 to $10,000,000
0.45% on the amount from $10,000,000 to $25,000,000
0.40% on the amount from $25,000,000 to $50,000,000
0.35% on the amount of assets over $50,000,000
Allegheny, in its sole discretion, has the right to deviate from this schedule. A client’s total fee may
exceed the schedule above when flat or hourly fees apply. Allegheny permits existing clients to
continue to be billed according to previously published ADV schedules for cases where the
relationship was established under the then published ADV terms. Previously established fee
schedules will be calculated differently than the schedule stated above, in accordance with that
client’s management agreement. Allegheny retains the right to negotiate fees on a client-by- client
basis. Each client’s facts, circumstances and needs are considered in determining the client fee.
Allegheny considers the complexity of the client, amount and types of assets managed, related
accounts
and other factors.
For the purpose of asset management fee calculations Allegheny reserves the right to combine the
advisory accounts of immediate family members or other related accounts. Allegheny, in its sole
discretion, permits an Allegheny Advisor to include additional accounts.
Streamlined Account Management Fees (“SAM”)
The Allegheny fee for the Streamlined Account Management (“Advisory Fee”) is a percentage of the
value of billable assets listed on the Investment Management Agreement and will be billed quarterly
or semi-annually in advance. Instructions will be provided to the client’s account custodian to have
the advisory fees deducted from their account as outlined in the Investment Management
Agreement. The Advisory Fee for SAM accounts ranges from .75%.
Clients have the option to have fees deducted from the client’s account or in limited circumstances,
receive a bill for services provided. Clients have the right to terminate their advisory contract with
Allegheny upon 30 (thirty) days written notice. In cases where fees are collected in advance and upon
termination of a management agreement, any prepaid, unearned fees will be refunded to the client.
Allegheny will prorate the refund according to the number of days remaining in the billing period.
Wrap Fee Program Transaction Charges Disclosure
In the Allegheny Financial Group Wrap Fee Program, the transaction costs are borne by Allegheny.
Allegheny has agreed to pay an asset-based fee to NFS for legacy accounts and a transaction-based
fee for new or transitioning accounts. Both types of fees cover clearing and execution services.
In legacy accounts, the asset-based fee covers the cost of all transactions during the first 60 days
after an account is opened. The asset-based fee has an annual limit of 45 transactions. Transactions
placed for an account that exceed the annual limit will be paid by Allegheny. Allegheny has an
incentive to limit trades to 45 per year.
In new or transitioned accounts, the transaction-based fees are borne by Allegheny and do not
include the above first 60 days or 45 transaction parameters. Allegheny still has an incentive to limit
trades as they will cover all transaction fees incurred by the client as part of the wrap fee program.
When the transaction costs borne by Allegheny are transaction based, Allegheny has a conflict of
interest because they have a financial incentive to trade less frequently. In addition, because
transactions charges vary by security type, there is a conflict of interest for Allegheny because they
have an incentive to select securities for your Account that cost the Advisor less than other types of
securities. Clients should discuss with their advisor these conflicts. The transaction charges vary
depending on the type of security being purchased or sold. In the case of mutual funds, the
transaction charges vary. Funds identified in the NFS or Fidelity published directory as being subject
to mutual fund transaction surcharges will be assessed a $10 mutual fund transaction surcharge on
buys, sells, exchanges-roundtrip and share class conversions. The list of fund families and/or CUSIPs
that are subject to the surcharge is subject to change by NFS or Fidelity without notice. Allegheny is
responsible for paying these transaction surcharges. Therefore, Allegheny has an incentive to use
funds that are not assessed the extra transaction fee.
NFS and Fidelity currently have arranged for all funds in the No Transaction Fee Program (referenced
with a fee status of “NTF”) in the published directory to be free of clearing charges for wrap fee
program accounts. NFS and Fidelity receive compensation from the fund families based on the
average daily net assets in the funds that are identified as NTF. Funds that are identified as NTF
generally pay all available 12b-1 fee revenue to NFS or Fidelity as part of such compensation. Any
12b-1 fees associated with the funds identified as NTF that are received by NFS for legacy wrap fee
accounts will be credit directly to the client account, or paid to Allegheny then applied as an offset
toward the client’s advisory fee. While NTF funds have no transaction charge they tend to have a
higher expense ratio, which is borne by the client. NFS and Fidelity do not charge a transaction
charge for fixed income securities (e.g., bonds or structured products); however, NFS and Fidelity
acts as principals on fixed income security transactions and receives a mark-up/down on the
transaction or applies a flat transaction fee. . These charges are subject to change.
Certain share classes of mutual funds that participate in NFS’s NTF Program can be purchased in non-
wrap accounts without a transaction charge. In order to participate in the NTF Program, mutual funds
pay NFS recordkeeping and/or revenue sharing fees in the form of asset-based or transaction-based
fees. A complete list of mutual fund sponsors participating in the NTF Program can be found by
visiting https://fundresearch.fidelity.com/mutual-funds/fund-families-no-transaction-fee. Clients
should understand that the cost to Allegheny of transaction charges is a factor they consider when
deciding which mutual funds to select and whether or not to place transactions in the account.
Advisor has a financial incentive to select certain funds in order to reduce or eliminate the
transaction charges, including but not limited to funds participating in the NTF Program.
Other Types of Fees and Charges
Program accounts will incur additional fees and charges from parties other than Allegheny as noted
below. These fees and charges are in addition to the advisory fee paid to Allegheny. Allegheny does
not share in any portion of these third-party fees.
NFS and Fidelity , as the custodian and broker-dealer providing brokerage and execution services on
program accounts, will impose certain fees and charges that are not part of the bundled platform
fee. NFS notifies clients of these charges at account opening. NFS and Fidelity will deduct these fees
and charges, as applicable, directly from the client’s program account.
There are other fees and charges that are imposed by other third parties that apply to investments in
program accounts. Some of these fees and charges are described below.
If a client’s assets are invested in mutual funds or other pooled investment products, clients should
be aware that there will be two layers of advisory fees and expenses for those assets. Client will pay
an advisory fee to the fund manager and other expenses as a shareholder of the fund. Client will also
pay Allegheny the advisory fee with respect to those assets. Most of the mutual funds available in the
program may be purchased directly. Therefore, clients could generally avoid the second layer of fees
by not using the management services of Allegheny and by making their own investment decisions.
Certain mutual funds impose fees and charges such as contingent deferred sales charges, early
redemption fees and charges for frequent trading. These charges may apply if client transfers into or
purchases such a fund with the applicable charges in a program account.
Although Allegheny requires that no-load and load-waived mutual funds be purchased in a program
account when available, client should understand that some mutual funds pay asset-based sales
charges or service fees (e.g., 12b-1 fees) to the custodian with respect to account holdings.
If client holds a variable annuity as part of an account, there are mortality, expense and
administrative charges, fees for additional riders on the contract and charges for excessive transfers
within a calendar year imposed by the variable annuity sponsor.
Further information regarding fees assessed by a mutual fund, or variable annuity is available in the
appropriate prospectus, which is available upon request from Allegheny or from the product sponsor
directly.
Other Important Considerations
The advisory fee is an ongoing wrap fee for investment advisory services, the execution of
transactions and other administrative and custodial services. The advisory fee may cost the client
more than purchasing the program services separately, for example, paying an advisory fee plus
commissions for each transaction in the account. Factors that bear upon the cost of the account in
relation to the cost of the same services purchased separately include the type and size of the
account, historical and or expected size or number of trades for the account, and number and range
of supplementary advisory and client-related services provided to the client.
The advisory fee also may cost the client more than if assets were held in a traditional brokerage
account. In a brokerage account, a client is charged a commission for each transaction, and the
representative has no duty to provide ongoing advice with respect to the account. If the client plans
to follow a buy and hold strategy for the account or does not wish to purchase ongoing investment
advice or management services, the client should consider opening a brokerage account rather than
a program account.
The Advisor recommending the program to the client receives compensation as a result of the
client’s participation in the program. This compensation includes the advisory fee and also may
include other compensation, such as bonuses, awards or other things of value offered by brokers to
Allegheny or its associated persons. The amount of this compensation may be more or less than what
Allegheny would receive if the client participated in other Allegheny programs, programs of other
investment advisors or paid separately for investment advice, brokerage and other client services.
Therefore, Allegheny has a financial incentive to recommend the program over other programs and
services.
The investment products available to be purchased in the program can be purchased by clients
outside of a program account, through broker-dealers or other investment firms not affiliated with
Allegheny.