A. The Registrant is a corporation formed in the State of New Jersey. The Registrant
became registered as an Investment Adviser Firm in April 2003. The Registrant is
owned, in equal part, by Richard Hennion and William Walsh.
B. As discussed below, the Registrant’s investment advisory services include
providing investment management services primarily to individuals, offering
various investment programs, and consulting services to sponsors of participant
directed retirement plans. The Registrant also serves as the portfolio supervisor to
affiliated unit investment trusts.
INVESTMENT ADVISORY SERVICES
The client can determine to engage the Registrant to provide discretionary or non-
discretionary investment advisory services on a wrap fee basis. (See discussion
below). If a client determines to engage the Registrant on a wrap fee basis the client
will pay a single fee for bundled services (i.e., investment advisory, brokerage,
custody). The services included in a wrap fee agreement will depend upon each
client’s particular need.
PORTFOLIO MANAGEMENT WRAP PROGRAM
The Registrant provides investment management services on a wrap fee basis in
accordance with the Registrant’s wrap fee program, referred to as the Portfolio
Management Program (“PMP”), (formerly Private Investment Management
Program “PIM”). The services offered under, and the corresponding terms and
conditions pertaining to, the PMP are discussed in the Wrap Fee Program Brochure
a copy of which is presented to all prospective Program participants.
Through the PMP, the Registrant can offer participants discretionary investment
management services, for a single specified annual wrap fee, which can include
trade execution, custody, reporting, and investment management fees. The current
annual Program fee is negotiable depending upon the amount and type of assets
held by the client. The maximum annual fee is 1.50%. The terms and conditions
for client participation in the PMP are set forth in detail in the Wrap Fee Program
Brochure, which is presented to all prospective Program participants in accordance
with the disclosure requirements of Part 2A Appendix 1 of Form ADV. The Wrap
Fee Program Brochure is incorporated into this Brochure by reference. All
prospective PMP participants should read both the Registrant’s Brochure and the
Wrap Fee Program Brochure, and ask any corresponding questions that they may
have, prior to participation in the PMP. Wells Fargo Clearing Services, LLC
(“WFCS”), a FINRA member broker-dealer, currently serves as the custodian for
the PMP accounts.
The firm makes certain of its asset allocation models available to the Hennion &
Walsh employee 401k Plan. Employees may choose a model or choose a variety
of other investment allocation options. The management fee is waived for this
service.
Please Note: As indicated in the Wrap Fee Program Brochure, participation in the
Program may cost more or less than purchasing such services separately. As also
indicated in the Wrap Fee Program Brochure, the annual fee charged by Registrant
for participation in the PMP may be higher or lower than those charged by other
sponsors of comparable wrap fee programs. Clients may incur other account and
transactional fees such as IRA fees and certain pass-through transaction fees
including pass-through execution costs and other fees as required by law.
The minimum Account size for PMP program clients is generally $50,000.
PERSONALIZED UMA PROGRAM
The Personalized UMA Program is a discretionary management program that is
offered through an agreement with our current clearing agent, WFCS. The program
involves a select group of investment managers ("Sub-Account Managers")
meeting certain qualification standards set by WFCS and approved by the
Registrant. All Sub-Account Managers enter into appropriate, standard-form sub-
advisory contracts with Wells Fargo Advisors obligating each Sub-Account
Manager to perform its respective duties in accordance with the requirements of
the Personalized UMA Program. The Registrant has discretion as to the
management of the Personalized UMA Program including the appointment of Sub-
Account Managers. The Registrant selects one or more Sub-Account Managers
who are responsible for discretionary investment selections of all or a portion of
the Personalized UMA Program assets. Subject to limitations described in the
client's responses to the Registrant’s Client Profile form, or any other appropriate
suitability analysis obtained by the Registrant from the client (including reasonable
restrictions on the investment and reinvestment of Program account assets),
selected Sub-Account Managers shall have discretion to manage the investments
of each UMA client account under the oversight of the Registrant without prior
consultation with the client. The Registrant may, in its own discretion, or at the
request of the client, replace and/or terminate any Personalized UMA Program
Sub-Account Manager. Unless otherwise specified, all securities will be held by,
and all Personalized UMA Program account transactions will be effected through
WFCS.
Asset level minimum requirements vary per manager. At present, there is typically
a $100,000 minimum overall portfolio size for entry into the Personalized UMA
Program for equity and balanced strategies. The minimum for Fixed Income
Strategies is typically $1,000,000. Minimums may be negotiable on a case-by case
basis.
ASSET ADVISOR
Asset Advisor is a full service non-discretionary investment advisory program that
includes advisory services and custodial costs in a single asset-based fee. The
Registrant offers this program through an agreement with our clearing agent,
WFCS.
Clients have the ability to invest in a variety of investment products including
stocks, bonds, mutual funds and options. Clients may make their own investment
decisions and conduct transactions on an unsolicited basis or work with a firm
advisory representative to help choose investments best suited for their needs.
Investment decisions made by the advisory representative are generally based on
a variety of factors including client’s investment objectives, risk tolerance,
liquidity needs and time horizon.
Investment advice offered under Asset Advisor is tailored to the individual’s
needs, as determined by the client and the advisor.
Other Fees
In addition to the program fees detailed in Item 5 below, the client also may incur
charges including a) any dealer markups, odd lot differentials and transfer taxes b)
margin interest c) operational fees and charges.
Our clearing agent, WFCS and Registrant may share in a portion of fees for
services provided.
MANAGED ACCOUNT PROGRAM
Hennion & Walsh Asset Management Inc. maintains a relationship with a family
of clients that currently hold accounts
at WFCS. With written discretionary
authority, these accounts are managed on an individual basis. The accounts are
charged a fee in addition to brokerage commissions and may incur transaction fees
and other related pass-through costs and expenses. This program is generally not
open to new investors; however new accounts may be opened to accommodate the
needs of clients currently in this program.
SUPERVISORY SERVICES TO UNIT INVESTMENT TRUSTS
Hennion & Walsh Asset Management, Inc. serves as supervisor to SmartTrust® unit
investment trusts (UITs). Hennion & Walsh Asset Management is an affiliate of the
sponsor; Hennion & Walsh, Inc. The supervisor charges each trust a fee for surveillance
services, bookkeeping and administrative services performed for the trust in an amount set
forth in the prospectus of each trust.
FINANCIAL PLAN
A separate financial plan is offered at no cost and provided upon request.
MISCELLANEOUS
Non-Investment Consulting/Implementation Services. To the extent requested
by the client, the Registrant may provide consulting services regarding non-
investment related matters, such as estate planning, tax planning, insurance, etc.
Neither the Registrant, nor any of its representatives, serves as an attorney or
accountant, and no portion of the Registrant’s services should be construed as
same. To the extent requested by a client, the Registrant may recommend the
services of other professionals for certain non-investment implementation
purposes (i.e., attorneys, accountants, insurance, etc.), including representatives of
the Registrant in their separate registered/licensed capacities as discussed below.
The client is under no obligation to engage the services of any such recommended
professional. The client retains absolute discretion over all such implementation
decisions and may accept or reject any recommendation from the Registrant.
Please Note: If the client engages any such recommended professional, and a
dispute arises thereafter relative to such engagement, the client agrees to seek
recourse exclusively from and against the engaged professional. Please Also Note:
Each client is advised that it remains the client’s responsibility to promptly notify
the Registrant if there is ever any change in client’s financial situation or
investment objectives for the purpose of reviewing/evaluating/revising
Registrant’s previous recommendations and/or services.
Wrap/Managed Account programs. In the event that Registrant is engaged to
provide investment management services as part of an unaffiliated wrap-fee
program, Registrant will be unable to negotiate commissions and/or transaction
costs. Under a wrap program, the wrap program sponsor arranges for the investor
participant to receive investment advisory services, the execution of securities
brokerage transactions, custody and reporting services for a single specified fee.
Participation in a wrap program may cost the participant more or less than
purchasing such services separately. In the event that Registrant is engaged to
provide investment management services as part of an unaffiliated managed
account program, Registrant will likewise be unable to negotiate commissions
and/or transaction costs. If the program is offered on a non-wrap basis, the program
sponsor will determine the broker-dealer through which transactions must be
effected, and the amount of transaction fees and/or commissions to be charged to
the participant investor accounts.
Sub-Advisory Arrangements. The Registrant may engage sub-advisors for the
purpose of assisting the Registrant with the management of its client accounts. The
sub-advisor(s) shall have discretionary authority for the day-to-day management
of the assets that are allocated to it by the Registrant. The sub-advisor shall
continue in such capacity until such arrangement is terminated or modified by the
Registrant. The Registrant shall pay a portion of the investment advisory fee
received for these allocated assets to the sub-advisor for its sub-advisory services.
Trade Error Policy. Registrant shall reimburse accounts for losses resulting from
the Registrant’s trade errors, but shall not credit accounts for such errors resulting
in market gains. The gains and losses are reconciled within the Registrant’s
custodian firm account and Registrant retains the net gains and losses.
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
professionals, and is expressly authorized to rely thereon. Moreover, each client
is advised that it remains his/her/its responsibility to promptly notify the Registrant
if there is ever any change in his/her/its financial situation or investment objectives
for the purpose of reviewing/evaluating/revising Registrant’s previous
recommendations and/or services.
Disclosure Statement. A copy of the Registrant’s written Brochure as set forth in
Part 2A of Form ADV and Form CRS shall be provided to each client prior to, or
contemporaneously with, the execution of the Advisory Agreement. Any client
who has not received a copy of Registrant’s written Brochure at least 48 hours
prior to executing the Investment Advisory Agreement shall have five business days
subsequent to executing the agreement to terminate the Registrant’s services
without penalty.
C. The Registrant shall provide investment advisory services specific to the needs of
each client. Prior to 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 can
request reasonable restrictions, in writing, and subject to review and approval,
Registrant will accommodate such restrictions.
D. Registrant provides investment management on a wrap fee basis. As stated above,
if a client determines to engage the Registrant on a wrap fee basis the client will
pay a single fee for bundled services (i.e., investment advisory, brokerage,
custody). The services included in a wrap fee agreement will depend upon each
client’s particular need. Please Note: When managing a client’s account on a wrap
fee basis, the Registrant receives a portion of the wrap fee as payment for its
investment advisory services.
E. As of December 31, 2023 the Registrant had Regulatory Assets Under
Management of $452,744,405 on a discretionary basis and $19,966,531 on a non-
discretionary basis.
Supervisory services provided to affiliated Unit Investment Trusts, total net asset value of
the Trusts, as of December 31, 2023 is $1,420,326,659.