A. Lutz Financial is a limited liability company formed on February 2, 2000, in the State of
Nebraska. Lutz Financial first registered as an investment adviser with the SEC in June
2003. Lutz Financial is principally owned by Ectart, LLC. James P. Boulay is Lutz
Financial’s Managing Member and Chief Compliance Officer.
B. As discussed below, Lutz Financial offers to its clients (generally, individuals, high net
worth individuals, retirement plans, charitable organizations, and business entities),
pension consulting and investment advisory services, and to the extent specifically
requested by a client, financial planning and related consulting services.
INVESTMENT ADVISORY SERVICES
The client can engage Lutz Financial to provide discretionary or non-discretionary
investment advisory services on a fee basis. Lutz Financial’s annual investment advisory
fee is based upon a percentage (%) of the market value of the assets placed under Lutz
Financial’s management. Prior to engaging Lutz Financial to provide investment advisory
services, clients are required to enter into an Investment Advisory Agreement with Lutz
Financial setting forth the terms and conditions of the engagement (including termination),
describing the scope of the services to be provided, and the fee that is due from the client.
Lutz Financial provides 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 objectives. Thereafter, Lutz Financial will allocate or
recommend that the client allocate investment assets consistent with their designated
investment objectives. Once allocated, Lutz Financial provides ongoing monitoring and a
review of account performance and asset allocation as compared to client investment
objectives, and may rebalance the account as necessary based on such reviews. Lutz
Financial primarily recommends or uses various mutual funds (including the mutual funds
sponsored by Dimensional Fund Advisors (“DFA”)), individual bonds, exchange-traded
funds (“ETFs”), in managing client accounts, based on the investment objectives of each
client.
Lutz Financial’s annual investment advisory fee includes investment advisory services,
and, to the extent specifically requested by the client, financial planning and consulting
services. In the event that the client requires extraordinary planning or consultation services
(to be determined in the sole discretion of Lutz Financial), Lutz Financial reserves the right
to charge for these additional services, pursuant to a stand-alone Financial Planning and
Consulting Agreement (see below).
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
Lutz Financial may provide financial planning or consulting services (including on
investment and non-investment related matters, such as estate planning and insurance
planning) on a stand-alone separate fee basis as described in Item 5 below. Prior to
engaging Lutz Financial to provide planning or consulting services, clients are generally
required to enter into a Financial Planning and Consulting Agreement with Lutz Financial
setting forth the terms and conditions of the engagement (including termination),
describing the scope of the services to be provided, and the portion of the fee that is due
from the client prior to Lutz Financial commencing services.
If requested by the client, Lutz Financial may recommend the services of other
professionals for implementation purposes, including the accounting services of Lutz
Financial’s affiliate, Lutz & Company, P.C. and related entities (“Lutz & Company”). (See
additional information about this affiliation at Item 10.C.). The client is under no obligation
to engage the services of any recommended professional. The client retains absolute
discretion over all implementation decisions and is free to accept or reject any
recommendation from Lutz Financial.
If the client engages any recommended professional, and a dispute arises thereafter relative
to such engagement, the client agrees to seek recourse exclusively from and against the
engaged professional. At all times, the engaged licensed professional(s) (i.e., attorney,
accountant, insurance agent, etc.), and not Lutz Financial, shall be responsible for the
quality and competency of the services provided.
It remains the client’s responsibility to promptly notify Lutz Financial if there is ever any
change in their financial situation or investment objectives so that Lutz Financial can
review, and if applicable, revise its previous recommendations or services.
RETIREMENT PLAN CONSULTING SERVICES
Lutz Financial offers fiduciary and non-fiduciary retirement plan consulting services, on a
discretionary or non-discretionary fee basis, to defined contribution, defined benefit and
non-qualified plans. All qualified plan client accounts are regulated under the Employee
Retirement Income Securities Act (“ERISA”). Lutz Financial will provide discretionary,
non-discretionary, fiduciary and non-fiduciary advisory services to the sponsors of the
defined contribution, defined benefit, and nonqualified deferred compensation plans,
considering each plan’s stated objective, liquidity needs, and stated policies and guidelines.
Lutz Financial employs an initial and ongoing screening process based upon various
quantitative and qualitative factors, including performance and costs.
Lutz Financial may be engaged to provide the following services (collectively, “Services”)
to a company, plan or plan participant during the term of an engagement.
Pooled Qualified Retirement Plan Fiduciary Services: Lutz Financial may be engaged to
provide discretionary 3(38) investment management to clients regarding the investment
management of pooled qualified retirement plans. Under this arrangement, Lutz Financial
will serve as an investment fiduciary as that term is defined under The Employee
Retirement Income Security Act of 1974 (“ERISA”) and accepts discretion over plan
assets, while assuming full responsibility and liability for the fiduciary functions
concerning decisions related to the plan assets. Lutz Financial’s services shall include the
following, to the extent requested and agreed upon, in writing:
i. Making discretionary investment decisions for Plan assets
ii. Developing an investment policy statement
iii. Creating periodic investment reports to aid in monitoring investments
iv. Attending periodic meetings with the client to discuss reports
v. Analyzing and recommending service providers
vi. Reviewing and conducting due diligence relating to manager and fund selections
vii. Attending meetings with custodian or record-keeper on matters pertaining to the
plan investments
viii. Participating in periodic committee meetings (or as often as the committee deems
necessary)
ix. Participating in additional sub-committee meetings as requested with members and
outside advisors
Defined Contribution Plan and Defined Benefit Plan Fiduciary Services: Lutz Financial
may be engaged to provide non-discretionary 3(21)(a)(ii) investment advice to clients
regarding asset classes and investment alternatives available to the client in accordance
with its investment policies and objectives and to the extent written policies and objectives
have been brought to the attention of Lutz Financial. When Lutz Financial is engaged in
this capacity, the client shall have final decision-making authority regarding the selection,
retention, removal and addition of investment options. Lutz Financial will not maintain
discretionary authority or control, whatsoever, with respect to the plan or the plan
participant accounts maintained by the plan. Lutz Financial will provide services only to
the extent it receives necessary and timely cooperation from the company, including but
not limited to meetings, telephone calls, production of documents, coordination of services
and company decision-making assistance. Lutz Financial’s services shall include the
following, to the extent requested and agreed upon, in writing:
i. Assisting in selecting investment options
ii. Assisting in the development of an investment policy statement
iii. Providing periodic investment reports to aid in monitoring investment options
iv. Attending periodic meetings with the client to discuss reports
v. Assisting with the selection of qualified default investment alternatives
vi. Analyzing and recommending service providers
vii. Assisting with review and due diligence relating to manager and fund selections
viii. Attending meetings with custodian or record-keeper on matters pertaining to the
plan investments
ix. Participating in periodic committee meetings (or as often as the committee deems
necessary)
x. Participating in additional sub-committee meetings as requested with members and
outside advisors
xi. Assisting with investment fund mapping and analytical support as requested
Clients must acknowledge that Lutz Financial has no responsibility to provide any services
related to the following types of assets: employer securities; ESOP Plans, real estate
(except for real estate funds and publicly traded REITs); voting proxies, stock brokerage
accounts or mutual fund windows; participant loans; non-publicly traded partnership
interests; other non-publicly traded securities or property (other than collective trusts and
similar vehicles); or other hard-to-value or illiquid securities or property (collectively,
“Unmanaged Assets”).
Defined Contribution, Defined Benefit Plan Non-Fiduciary Services: Lutz Financial may
be engaged to provide non-discretionary, non-fiduciary services. When Lutz Financial is
engaged in this capacity, the client shall have final decision-making authority regarding the
selection, retention, removal, modification or addition of all advisor non-fiduciary
recommendations. Lutz Financial’s services shall also include the following, to the extent
requested and agreed upon, in writing:
i. Monitoring and supporting governances
ii. Assisting with plan administration and vendor management
iii. Supporting participant communication and education program
iv. Providing benchmark studies and searches
v. Assisting with implementation and conversions
vi. Analyzing client’s service provider reports
AUTOMATED INVESTMENT PROGRAM
Lutz Financial offers an Automated Investment Program (the “Program”) for certain clients
who do not want ongoing planning and consulting services. This Program features asset
management services delivered digitally, with access to online financial planning software
for the client’s use. However, this program shall not include financial planning services.
Clients who are members of the Program are invested in a range of investment strategies
Lutz Financial has constructed and manages, each consisting of a portfolio of exchange-
traded funds and mutual funds, and a cash allocation. The client may instruct us to exclude
up to three Funds from their portfolio. The Client’s portfolio is held in a brokerage account
opened by the client at Charles Schwab & Co., Inc. (“Schwab”). We use the Institutional
Intelligent Portfolios® platform (“Platform”), offered by Schwab Performance
Technologies (“SPT”), a software provider to independent investment advisors and an
affiliate of Schwab, to operate the Program.
Please Note: Lutz Financial, and not Schwab, is the Client’s investment adviser and act as
the Client’s primary contact for the Program. Duties of implementation under this Program
fall solely on the client. Lutz Financial is not responsible for implementation of advice
provided under this Program. Additional details regarding the fee for the Program can
be found at Item 5 below.
MISCELLANEOUS
Limitations of Financial Planning and Non-Investment Consulting/Implementation
Services. As indicated above, Lutz Financial may provide financial planning and related
consulting services regarding non-investment related matters, such as estate planning, tax
planning, insurance planning, etc. Lutz Financial 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, Lutz Financial does not prepare estate planning documents or tax returns.
To the extent requested by a client, Lutz Financial may recommend the services of other
professionals for certain non-investment implementation purposes (i.e., attorneys,
accountants, insurance agents, etc.), including Lutz Financial’s affiliate, Lutz & Company
(See additional information about these affiliations at Item 10.C). The client is under no
obligation to engage the services of any recommended professional. The client retains
absolute discretion over all implementation decisions and is free to accept or reject any
recommendation from Lutz Financial and/or its representatives.
Please Note: If the client engages any recommended professional, and a dispute arises
thereafter relative to that engagement, the client agrees to seek recourse exclusively from
and against the engaged professional. At all times, the engaged licensed professional(s)
(i.e., attorney, accountant, insurance agent, etc.), and not Lutz Financial, shall be
responsible for the quality and competency of the services provided. Please Further Note-
Conflict of Interest: The recommendation by Lutz Financial representative that a client
purchase an insurance product from a Lutz Financial representative in his/her individual
capacity as a representative of an insurance agent, presents a conflict of interest. The
receipt of commissions may provide an incentive to recommend insurance products based
on commissions to be received, rather than on a particular client’s need. No client is under
any obligation to purchase insurance commission products from a Lutz Financial
representative. Clients may purchase insurance products through other insurance agents.
Additionally, please note, Lutz Financial and its IARs may receive additional
compensation for recommending clients to Lutz Financial’s affiliate, Lutz & Co. Please
Note: Neither Lutz Financial nor any of its investment professionals are agent of record
for insurance product referrals.
Lutz Financial’s Chief Compliance Officer, James P. Boulay, remains available to
address any questions that a client or prospective client may have regarding the above
conflict of interest.
Use of Certain Mutual Funds and ETFs: Lutz Financial utilizes mutual funds and
exchange traded funds for its client portfolios. In addition to Lutz Financial’s investment
advisory fee described below, and transaction and/or custodial fees discussed below, clients
will also incur, relative to all mutual fund and exchange traded fund purchases, charges
imposed at the fund level (e.g., management fees and other fund expenses). The mutual
funds and exchange traded funds utilized by Lutz Financial are generally available directly
to the public. Thus, a client can generally obtain the funds recommended and/or utilized by
Lutz Financial independent of engaging Lutz Financial as an investment advisor. However,
if a prospective client does so, then they will not receive Lutz Financial’s initial and
ongoing investment advisory services.
Please Note-Use of DFA Mutual Funds: Lutz Financial utilizes the mutual funds issued
by Dimensional Fund Advisors (“DFA”). DFA funds are generally only available through
registered investment advisers approved by DFA. Thus, if the client was to terminate Lutz
Financial’s services, and transition to another adviser who has not been approved by DFA
to utilize DFA funds,
restrictions regarding additional purchases of, or reallocation among
other DFA funds, will generally apply. Lutz Financial’s Chief Compliance Officer,
James P. Boulay, remains available to address any questions that a client or
prospective client may have regarding the above.
Custodian Charges-Additional Fees. As discussed below at Item 12 below, when
requested to recommend a broker-dealer/custodian for client accounts, Lutz Financial
generally recommends that Charles Schwab and Co., Inc. (“Schwab”), and Nationwide
Advisory (“Nationwide”) serve as the broker-dealer/custodian for client investment
management assets. Broker-dealers such as Schwab and Nationwide charge brokerage
commissions, transaction, and/or other type fees for effecting certain types of securities
transactions (i.e., including transaction fees for certain mutual funds, and mark-ups and
mark-downs charged for fixed income transactions, etc.). The types of securities for which
transaction fees, commissions, and/or other type fees (as well as the amount of those fees)
shall differ depending upon the broker-dealer/custodian (while certain custodians,
including Schwab and Nationwide, do not currently charge fees on individual equity
transactions, others do). When beneficial to the client, individual fixed‐income and/or
equity transactions may be effected through broker‐dealers with whom Lutz Financial
and/or the client have entered into arrangements for prime brokerage clearing services,
including effecting certain client transactions through other SEC registered and FINRA
member broker‐dealers (in which event, the client generally will incur both the transaction
fee charged by the executing broker‐dealer and a “trade-away” fee charged by Schwab
and/or Nationwide). These fees/charges are in addition to Lutz Financial’s investment
advisory fee at Item 5 below. Lutz Financial does not receive any portion of these
fees/charges.
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 Lutz Financial recommends that a client roll over
their retirement plan assets into an account to be managed by Lutz Financial, such a
recommendation creates a conflict of interest if Lutz Financial will earn new (or increase
its current) compensation as a result of the rollover. If Lutz Financial provides a
recommendation as to whether a client should engage in a rollover or not (whether it is
from an employer’s plan or an existing IRA), Lutz Financial is acting as a fiduciary 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. No client is
under any obligation to roll over retirement plan assets to an account managed by Lutz
Financial. Lutz Financial’s Chief Compliance Officer, James P. Boulay, remains
available to address any questions that a client or prospective client may have
regarding the conflict of interest presented by such a rollover recommendation.
Non-Discretionary Service Limitations. Clients that determine to engage Lutz Financial
on a non-discretionary investment advisory basis must be willing to accept that Lutz
Financial cannot effect any account transactions without obtaining prior consent to such
transaction(s) from the client. In the event that Lutz Financial would like to make a
transaction for a client’s account (including in the event of an individual holding or general
market correction), and the client is unavailable, Lutz Financial will be unable to effect the
account transaction(s) (as it would for its discretionary clients) without first obtaining the
client’s consent.
Variable Annuities (1035 exchanges): In limited circumstances, Lutz Financial may
invest client assets in the investment sub-divisions of a variable annuity issued by
Nationwide. Lutz Financial does not purchase variable annuities for its clients on a
commission basis. Rather, Lutz Financial recommends that clients owning variable
annuities consider a 1035 exchange to Nationwide, one of the nation's lowest cost, fee-
only, variable annuity providers. By so doing, we seek to reduce the fees and expenses
associated with commission-based annuities. The client retains absolute discretion over the
decision to engage Nationwide and is free to accept or reject any recommendation from
Lutz Financial and/or its representatives.
Reporting Services. Lutz Financial may provide its clients with access to an online
platform hosted by Orion or MoneyGuide Pro. The Orion and MoneyGuide Pro platforms
allow a client to view their complete asset allocation, including those assets that Lutz
Financial does not manage (the “Unmanaged Assets”). Lutz Financial does not provide
investment management, monitoring, or implementation services for the Unmanaged
Assets. Therefore, Lutz Financial shall not be responsible for the investment performance
of the Unmanaged Assets. Rather, the client and/or their advisor(s) that maintain
management authority for the Unmanaged Assets, and not Lutz Financial, shall be
exclusively responsible for such investment performance. The client may choose to engage
Lutz Financial to manage some or all of the Unmanaged Assets pursuant to the terms and
conditions of an Investment Advisory Agreement between Lutz Financial and the client.
The Orion and MoneyGuide Pro platforms also provide access to other types of
information, including financial planning concepts, which should not be viewed as
services, advice, or recommendations provided by Lutz Financial. Finally, Lutz Financial
shall not be held responsible for any adverse results a client may experience if the client
engages in financial planning or other functions available on the Orion or MoneyGuide Pro
platforms without Lutz Financial’s assistance or oversight.
Portfolio Activity. Lutz Financial has a fiduciary duty to provide services consistent with
the client’s best interest. Lutz Financial will review client portfolios on an ongoing basis
to determine if any changes are necessary based upon various factors, including, but not
limited to, investment performance, market conditions, fund manager tenure, style drift,
account additions/withdrawals, and/or a change in the client’s investment objective. Based
upon these factors, there may be extended periods of time when Lutz Financial determines
that changes to a client’s portfolio are unnecessary. Clients remain subject to the fees
described in Item 5 below during periods of portfolio inactivity. Of course, as indicated
below, there can be no assurance that investment decisions made by Lutz Financial will be
profitable or equal any specific performance level(s).
Other Assets. A client may:
• Hold securities that were purchased at the request of the client or acquired prior to
the client’s engagement of Lutz Financial. Generally, with potential
exceptions, Lutz Financial does not/would not recommend nor follow such
securities, and absent mitigating tax consequences or client direction to the
contrary, would prefer to liquidate such securities. Please Note: If/when
liquidated, it should not be assumed that the replacement securities purchased by
the Lutz Financial will outperform the liquidated positions. To the contrary,
different types of investments involve varying degrees of risk, and there can be no
assurance that future performance of any specific investment or investment
strategy (including the investments and/or investment strategies recommended or
undertaken by Lutz Financial) will be profitable or equal any specific performance
level(s). In addition, there may be other securities and/or accounts owned by the
client for which Lutz Financial does not maintain custodian access and/or trading
authority; and,
Corresponding Services/Fees: When agreed to by Lutz Financial, Lutz
Financial shall: (1) remain available to discuss these securities/accounts on an
ongoing basis at the request of the client; (2) monitor these securities/accounts on a
regular basis, including, where applicable, rebalancing with client consent; (3) shall
generally consider these securities as part of the client’s overall asset allocation; (4)
report on such securities/accounts as part of regular reports that may be provided by
Lutz Financial; and, (5) include the market value of all such securities for purposes of
calculating advisory fee.
Cash Positions. Lutz Financial continues to treat cash as an asset class. As such, unless
determined to the contrary by Lutz Financial, all cash positions (money markets, etc.) shall
continue to be included as part of assets under management for purposes of calculating
Lutz Financial’s advisory fee. At any specific point in time, depending upon perceived or
anticipated market conditions/events (there being no guarantee that such anticipated
market conditions/events will occur), Lutz Financial may maintain cash positions for
defensive purposes. In addition, while assets are maintained in cash, such amounts could
miss market advances. Depending upon current yields, at any point in time, Lutz
Financial’s advisory fee could exceed the interest paid by the client’s money market fund.
Cross Transactions. In limited circumstances, when determined to be in the best interest
of its clients, Lutz Financial may arrange for cross-transactions pursuant to which Lutz
Financial may cross transactions between two of its managed client accounts (i.e.,
arranging for the clients’ securities trades by “crossing” these trades when Lutz Financial
believes that such transactions are beneficial to its clients). This may present a conflict of
interest. For all such transactions, neither Lutz Financial nor any affiliate will be acting as
a broker. Lutz Financial will not receive any commission or transaction-based
compensation, although Lutz Financial has an interest in the price at which the cross trades
are conducted since Lutz Financial’s asset-based fees will be negatively impacted by lower
bond values. These transactions will be generally effected through Schwab, the account
custodian. The client may revoke Lutz Financial’s cross-transaction authority at any time
upon written notice to Lutz Financial.
Cybersecurity Risk. The information technology systems and networks that Lutz
Financial and its third-party service providers use to provide services to Lutz Financial’s
clients employ various controls, which are designed to prevent cybersecurity incidents
stemming from intentional or unintentional actions that could cause significant
interruptions in Lutz Financial’s operations and result in the unauthorized acquisition or
use of clients’ confidential or non-public personal information. Clients and Lutz Financial
are nonetheless subject to the risk of cybersecurity incidents that could ultimately cause
them to incur losses, including for example: financial losses, cost and reputational damage
to respond to regulatory obligations, other costs associated with corrective measures, and
loss from damage or interruption to systems. Although Lutz Financial has established
processes to reduce the risk of cybersecurity incidents, there is no guarantee that these
efforts will always be successful, especially considering that Lutz Financial does not
directly control the cybersecurity measures and policies employed by third-party service
providers. Clients could incur similar adverse consequences resulting from cybersecurity
incidents that more directly affect issuers of securities in which those clients invest, broker-
dealers, qualified custodians, governmental and other regulatory authorities, exchange and
other financial market operators, or other financial institutions.
Socially Responsible Investing Limitations. Socially Responsible Investing involves the
incorporation of certain considerations into the investment due diligence process. Socially
responsible investing incorporates a set of socially responsible criteria/factors used in
evaluating potential investments, including environmental, social, and governance
considerations. The number of companies that meet an acceptable socially responsible
mandate can be limited when compared to those that do not, and could underperform broad
market indices. Investors must accept these limitations, including potential for
underperformance. Correspondingly, the number of socially responsible mutual funds and
exchange-traded funds are limited when compared to those that do not maintain such a
mandate. As with any type of investment (including any investment and/or investment
strategies recommended and/or undertaken by Lutz Financial), there can be no assurance
that investment in socially responsible securities or funds will be profitable or prove
successful. Lutz Financial does not maintain or advocate a socially responsible investment
strategy, but will seek to employ socially responsible investments if directed by a client to
do so. If implemented, Lutz Financial shall rely upon the assessments undertaken by the
unaffiliated mutual fund, exchange traded fund or separate account portfolio manager to
determine that the fund’s or portfolio’s underlying company securities meet a socially
responsible mandate.
Client Obligations. In performing its services, Lutz Financial shall not be required to
verify any information received from the client or from the client’s other designated
professionals, and is expressly authorized to rely thereon. It remains the client’s
responsibility to promptly notify Lutz Financial if there is ever any change in their financial
situation or investment objectives so that Lutz Financial can review, and if applicable,
revise its previous recommendations or services.
Disclosure Brochure. A copy of Lutz Financial’s written Privacy Notice, written
disclosure statement as set forth on Part 2A and 2B of Form ADV and Form CRS (Client
Relationship Summary) shall be provided to each client or prospective client prior to, or
contemporaneously with, the execution of the Investment Advisory Agreement or Financial
Planning and Consulting Agreement. Any client who has not received a copy of Adviser’s
written Brochure at least 48 hours prior to executing such agreement shall have five
business days subsequent to executing the agreement to terminate the Adviser’s services
without penalty.
C. Lutz Financial provides 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 objectives. Thereafter, Lutz Financial will allocate or
recommend that the client allocate investment assets consistent with their designated
investment objectives. The client may impose reasonable restrictions, in writing, on Lutz
Financial’s services.
D. Lutz Financial does not participate in a wrap fee program.
E. As of December 31, 2023, Lutz Financial had $2,021,734,628 in assets under management
on a discretionary basis and $257,306,892 in assets under management on a non-
discretionary basis for a total of $2,279,041,520 in assets under management.