Hopwood Financial Services was founded in 2003 and is principally owned by Herbert G. Hopwood.
Hopwood Financial Services provides customized investment management and financial planning services
primarily to high-net-worth individuals and associated trusts, estates, IRAs, pension and profit sharing plans,
and other legal entities. Hopwood Financial generally invests client assets in domestic and international stocks,
bonds, mutual funds, and exchange traded funds (“ETFs”).
Investment Advisory Services
Hopwood Financial Services (“HFS”) provides discretionary investment advisory services on a fee-only basis.
HFS’s annual investment advisory fee is based upon a percentage (%) of the market value of the assets placed
under the firm’s management. HFS provides investment advisory services specific to the needs of each client.
HFS works with each client to establish an appropriate investment profile. Clients choose from various
allocations of equities, fixed income and cash, and can impose reasonable restrictions on HFS’s management
of their accounts which are mutually agreed upon in advance. Thereafter, HFS will allocate investment assets
consistent with the designated investment objectives. Once allocated, HFS provides ongoing monitoring and
review of account performance, asset allocation and client investment objectives.
Personal Financial Planning and Consulting Services
Hopwood Financial Services may provide financial planning and/or consulting services (including investment
and non-investment related matters, including estate planning, insurance planning, etc.) on a stand-alone
separate fee basis. Prior to engaging HFS to provide planning or consulting services, clients are required to
enter into an agreement with HFS 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 HFS commencing services.
If requested by the client, HFS may recommend the services of other professionals for implementation
purposes. 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 is free to accept or reject any
recommendation from HFS.
If the client engages any recommended unaffiliated 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 HFS, shall
be responsible for the quality and competency of the services provided.
It remains the client’s responsibility to promptly notify HFS if there is ever any change in their financial
situation or investment objectives for the purpose of reviewing, evaluating or revising HFS’s previous
recommendations and/or services.
Retirement Consulting Services
Hopwood Financial Services may also be engaged to provide discretionary pension consulting services,
pursuant to which it assists sponsors of self-directed retirement plans with the selection and/or monitoring of
investment alternatives (generally open-end mutual funds) from which plan participants shall choose in
self-directing the investments for their individual plan retirement accounts. In addition, to the extent requested
by the plan sponsor, HFS shall also provide participant education designed to assist participants in identifying
the appropriate investment strategy for their retirement plan accounts. The terms and conditions of the
engagement shall generally be set forth in an agreement between Hopwood Financial Services and the plan
sponsor.
Additional Disclosures
Limitations of Financial Planning and Non-Investment Consulting/Implementation Services. As indicated
above, to the extent requested by a client, HFS may provide financial planning and related consulting services.
Neither HFS nor its investment adviser representatives assist clients with the implementation of any financial
plan, unless they have agreed to do so in writing. HFS does not monitor a client’s financial plan, and it is the
client’s responsibility to revisit the financial plan with Hopwood Financial, if desired.
HFS may provide financial planning and related consulting services regarding non-investment related matters,
such as estate planning, tax planning, insurance, etc. HFS does not serve as a law firm, accounting firm, or
insurance agency, and no portion of Hopwood Financial Services’ services should be construed as legal,
accounting, or insurance implementation services. Accordingly, HFS does not prepare estate planning
documents, tax returns or sell insurance products.
To the extent requested by a client, HFS may recommend the services of other professionals for certain non-
investment implementation purposes (i.e., attorneys, accountants, insurance agents, etc.). Clients are reminded
that they are under no obligation to engage the services of any such recommended professional. The client retains
absolute discretion over all such implementation decisions and is free to accept or reject any recommendation
made by HFS or its representatives.
If the client engages any recommended unaffiliated 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 HFS, shall
be responsible for the quality and competency of the services provided.
Retirement Rollovers-Potential for 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). Hopwood Financial does not provide rollover recommendations. However, upon request,
Hopwood Financial may provide educational materials to clients considering a rollover. No client is under any
obligation to roll over retirement plan assets to an account managed by Hopwood Financial.
Cash Positions. Hopwood Financial continues to treat cash as an asset class. As such, unless determined to the
contrary by Hopwood Financial, all cash positions (money markets, etc.) shall continue to be included as part of
assets under management for purposes of calculating Hopwood 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), Hopwood 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, Hopwood Financial’s advisory fee could exceed the interest paid by
the client’s money market fund.
Cash Sweep Accounts. Certain account custodians can require that cash proceeds from account transactions or
new deposits, be swept to and/or initially maintained in a specific custodian designated sweep account. The yield
on the sweep account will generally be lower than those available for other money market accounts. When this
occurs, to help mitigate the corresponding yield dispersion Hopwood Financial shall (usually within 30 days
thereafter) generally (with exceptions) purchase a higher yielding money market fund (or other type security)
available on the custodian’s platform, unless Hopwood Financial reasonably anticipates that it will utilize the
cash proceeds during the subsequent 30-day period to purchase additional investments for the client’s account.
Exceptions and/or modifications can and will occur with respect to all or a portion of the cash balances for
various reasons, including, but not limited to the amount of dispersion between the sweep account and a money
market fund, the size of the cash balance, an indication from the client of an imminent need for such cash, or the
client has a demonstrated history of writing checks from the account.
The above does not apply to the cash component maintained within a Hopwood Financial actively managed
investment strategy (the cash balances for which shall generally remain in the custodian designated cash sweep
account), an indication
from the client of a need for access to such cash, assets allocated to an unaffiliated
investment manager and cash balances maintained for fee billing purposes.
The client shall remain exclusively responsible for yield dispersion/cash balance decisions and corresponding
transactions for cash balances maintained in any Hopwood Financial unmanaged accounts.
Use of Mutual and Exchange Traded Funds. Most mutual funds and exchange traded funds are available
directly to the public. Therefore, a prospective client can obtain many of the funds that may be utilized by HFS
independent of engaging HFS as an investment advisor. However, if a prospective client determines to do so,
he/she will not receive HFS’s initial and ongoing investment advisory services.
In addition to HFS’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).
Third-Party Managers. HFS may allocate a portion of a client’s investment assets among unaffiliated Third-
Party Managers (“Independent Manager(s)”) in accordance with the client’s designated investment objective(s).
In such situations, the Independent Manager(s) will have day-to-day responsibility for the active discretionary
management of the allocated assets. HFS will continue to render investment supervisory services to the client
relative to the ongoing monitoring and review of account performance, asset allocation, and client investment
objectives. HFS generally considers the following factors when recommending Independent Manager(s): the
client’s designated investment objective(s), management style, performance, reputation, financial strength,
reporting, pricing, and research. The investment management fees charged by the designated Independent
Manager(s) are exclusive of, and in addition to, HFS’s ongoing investment advisory fee. Independent Managers
shall debit their fees directly from client accounts.
The Independent Manager’s fee shall be communicated to the client upon their engagement and any increase or
changes regarding the Independent Managers billing practices shall be subsequently communicated to the client.
HFS’s advisory fee is set forth in the fee schedule below.
Socially Responsible Investing Limitations. Socially Responsible Investing involves the incorporation of
Environmental, Social and Governance (“ESG”) considerations into the investment due diligence process. ESG
investing incorporates a set of criteria/factors used in evaluating potential investments: Environmental (i.e.,
considers how a company safeguards the environment); Social (i.e., the manner in which a company manages
relationships with its employees, customers, and the communities in which it operates); and Governance (i.e.,
company management considerations). The number of companies that meet an acceptable ESG 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 ESG 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 Hopwood Financial), there can be no assurance that investment in ESG securities or funds will be profitable
or prove successful. Hopwood Financial does not maintain or advocate an ESG investment strategy but will
seek to employ ESG if directed by a client to do so. If implemented, Hopwood 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.
Portfolio Activity. HFS has a fiduciary duty to provide services consistent with the client’s best interest. As part
of its investment advisory services, HFS 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, mutual
fund manager tenure, style drift, and/or a change in the client’s investment objectives. Based upon these factors,
there may be extended periods of time when HFS determines that changes to a client’s portfolio are neither
necessary nor prudent. Clients nonetheless remain subject to the fees described below during periods of account
inactivity.
ByAllAccounts|Yodlee®. HFS, in conjunction with the services provided by ByAllAccounts, Inc. |Yodlee®, may
also provide periodic comprehensive reporting services which can incorporate all of the client’s investment
assets, including those investment assets that are not part of the assets managed by HFS (the “Excluded Assets”).
The client and/or their other advisors that maintain trading authority, and not HFS, shall be exclusively
responsible for the investment performance of the Excluded Assets. Unless otherwise specifically agreed to, in
writing, HFS’s service relative to the Excluded Assets is limited to reporting only. The sole exception to the
above shall be if HFS is specifically engaged to monitor and/or allocate the assets within the client’s 401(k)
account maintained away at the custodian directed by the client’s employer. As such, except with respect to the
client’s 401(k) account (if applicable), HFS does not maintain any trading authority for the Excluded Assets.
Rather, the client and/or the client’s designated other investment professional(s) maintain supervision,
monitoring and trading authority for the Excluded Assets. If HFS is asked to make a recommendation as to any
Excluded Assets, the client is under absolutely no obligation to accept the recommendation, and HFS shall not
be responsible for any implementation error (timing, trading, etc.) relative to the Excluded Assets. In the event
the client desires that HFS provide investment management services for the Excluded Assets, the client may
engage HFS to do so pursuant to the terms and conditions of the Investment Advisory Agreement between HFS
and the client.
Client Obligations. In performing its services, HFS 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.
Moreover, each client is advised that it remains their responsibility to promptly notify HFS if there is ever any
change in their financial situation or investment objectives for the purpose of reviewing, evaluating or revising
HFS’s previous recommendations and/or services.
Cybersecurity Risk. The information technology systems and networks that Hopwood Financial and its third-
party service providers use to provide services to Hopwood 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 Hopwood Financial’s operations and result in the unauthorized acquisition or
use of clients’ confidential or non-public personal information. Clients and Hopwood 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 Hopwood
Financial has established procedures to reduce the risk of cybersecurity incidents, there is no guarantee that these
efforts will always be successful, especially considering that Hopwood 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
Disclosure Statement. A copy of Hopwood Financial Services’ written disclosure statement and client
relationship summary, as set forth on Part 2 of Form ADV and Form CRS respectively, shall be provided to each
client prior to, or contemporaneously with, the execution of an advisory agreement.
As of December 31, 2023, Hopwood Financial managed $549,044,784 on a discretionary basis on behalf
of approximately 268 client households.