A. Lee Johnson Capital Management, LLC (the “Registrant”) d/b/a OverRidge Wealth
Advisors is a limited liability company formed on March 24, 2008 in the State of Texas.
The Registrant became registered as an Investment Adviser Firm on September 13, 2003.
The Registrant is principally owned by Andrew Heinz, the Registrant’s President and Chief
Executive Officer.
B. As discussed below, the Registrant offers to its clients (individuals, high net worth
individuals, business entities, trusts, estates and charitable organizations, etc.) 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 the Registrant to provide discretionary or non-discretionary
investment advisory services on a fee basis. Prior to engaging the Registrant to provide
investment advisory services, clients are required to enter into an Investment Advisory
Agreement with Registrant 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.
The Registrant provides investment advisory services specific to the needs of each client.
Before providing investment advisory services, an investment adviser representative will
ascertain each client’s investment objective(s). Thereafter, the Registrant will allocate
and/or recommend that the client allocate investment assets consistent with the designated
investment objective(s). The Registrant primarily allocates client investment assets among
various individual equity (stocks), debt (bonds) and fixed income securities, and mutual
funds and/or exchange traded funds (“ETFs).
Registrant’s advisory services are provided in accordance with the client’s designated
investment objective(s). Once allocated, the Registrant provides ongoing monitoring and
review of account performance, asset allocation, and client investment objectives.
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
To the extent requested by a client, the Registrant may determine to 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 the Registrant to provide planning or consulting services, clients
are generally required to enter into a Financial Planning and Consulting Agreement with
Registrant 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 Registrant commencing services. If requested by the
client, Registrant may recommend the services of other professionals, including the
Registrant’s representatives in their individual capacities as licensed insurance agents. The
client is under no obligation to engage the services of any such recommended professional.
The client retains absolute discretion over all implementation decisions and is free to accept
or reject any recommendation from the Registrant. Registrant’s recommendation that a
client engage one or more of Registrant’s representatives in their capacity as an insurance
agent presents a conflict of interest, as the recommendation may be made based on the
compensation to be received, rather than on a particular client’s need.
Please Note: If the client engages any professional (i.e. attorney, accountant, insurance
agent, etc.), recommended or otherwise, and a dispute arises thereafter relative to such
engagement, the client agrees to seek recourse exclusively from the engaged professional.
At all times, the engaged licensed professional(s), and not Registrant, shall be responsible
for the quality and competency of the services provided.
MISCELLANEOUS
Limitations of Financial Planning and Non-Investment Consulting/Implementation
Services. To the extent requested by the client, the Registrant may provide financial
planning and related 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 (i.e., attorneys, accountants, insurance,
etc.), including representatives of the Registrant in their separate capacities as insurance
agents, as discussed in Item 10.C 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 is free to accept or reject any recommendation from
the Registrant. Registrant’s recommendation that the client engage one or more of
Registrant’s representatives in their capacity as an insurance agent presents a conflict of
interest, as the recommendation may be made based on the compensation to be received,
rather than on a particular client’s need.
Variable Annuity Management. The Registrant provides advisory services relative to the
allocation of assets among the investment sub-divisions that comprise a variable
investment product owned by the client. If the product was previously purchased on a
commission basis through one of the Registrant’s representatives in their individual
capacities as representatives of an unaffiliated broker-dealer, the Registrant will offset the
commission paid against its advisory fee. The Registrant will not begin charging its
advisory fee until the advisory fees earned for managing such product exceed the
commission paid for the product. For variable annuity products purchased through other
broker dealers, and for which Registrant’s representatives did not earn a commission, the
Registrant will charge its standard advisory fee. The Registrant manages the variable
annuity on a tactical investment strategy basis, the objective of which is to be invested in
the equity market during an anticipate uptrend and in cash during an anticipated
pullback/correction. Of course, there can be no assurance or guarantee that the Registrant's
decisions will be correct or profitable. The Registrant includes the variable product assets
as part of “assets under management” for the purposes of calculating its annual advisory
fee.
Use of Separate Account Managers. For some qualified clients, and when consistent with
such client’s individual circumstances and objectives, Registrant may recommend other
investment advisers, typically separate account managers. The separate account manager
is responsible for the security selection(s) and ongoing management of the separately
managed account. The selection of these managers will be discussed with the client and
agreed to in advance. Assets placed into separately managed accounts may be charged
performance-based compensation, discussed further in Item 6 below. When performance-
based compensation is charged pursuant to a separate account manager engagement,
Registrant may participate in the performance-based compensation arrangement but will
not assess its standard asset-based fee to the client’s separate account. No client is under
any obligation to utilize a separate account manager.
Cash Positions. At any specific point in time, depending upon perceived or anticipated
market conditions or events (there being no guarantee that such anticipated market
conditions/events will occur), the Registrant may maintain cash positions for defensive,
liquidity, or other purposes. All cash and cash equivalent positions (money markets, etc.)
shall be included as part of assets under management for purposes of calculating the
Registrant’s advisory fee, unless otherwise agreed, in writing.
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 the Registrant recommends
that
a client roll over their retirement plan assets into an account to be managed by the
Registrant, such a recommendation creates a conflict of interest if the Registrant 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 Registrant.
ERISA / IRC Fiduciary Acknowledgment. When Registrant provides investment advice
to a client regarding the client’s retirement plan account or individual retirement account,
Registrant 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. The way Registrant makes money creates
some conflicts with client interests, so Registrant 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, Registrant 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 Registrant gives advice that
is in the client’s best interest;
• Charge no more than is reasonable for Registrant’s services; and
• Give the client basic information about conflicts of interest.
Fee Dispersion. As indicated below at Item 5, Registrant, in its sole discretion, may charge
a lesser investment advisory fee and/or charge a flat fee based upon certain criteria (i.e.,
anticipated future earning capacity, anticipated future additional assets, dollar amount of
assets to be managed, related accounts, account composition, prior fee schedules,
competition, negotiations with client, etc.). Please Note: As result of the above, similarly
situated clients could pay different fees. In addition, similar advisory services may be
available from other investment advisers for similar or lower fees.
Use of Mutual Funds/ETFs. Most mutual funds and exchange-traded funds (“ETFs”) are
available directly to the public. Thus, a prospective client can obtain many of the mutual
funds or ETFs that may be recommended and/or utilized by Registrant independent of
engaging Registrant as an investment adviser. However, if a prospective client determines
to do so, he/she will not receive Registrant’s initial and ongoing investment advisory
services.
Schwab/TD Ameritrade. As discussed below at Item 12, Registrant recommends that
Charles Schwab and Co., Inc. (“Schwab”) and/or TD Ameritrade (“TD”) serve as the
broker-dealer/custodian for client investment management assets. Broker-dealers such as
Schwab and TD charge brokerage commissions and/or transaction fees for effecting certain
securities transactions. In addition to Registrant’s investment management fee, brokerage
commissions and/or transaction fees, 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 fees charged by Schwab and TD, as well as the charges
imposed at the mutual fund and exchange traded fund level, are in addition to Registrant’s
advisory fee referenced in Item 5 below.
Portfolio Activity. Registrant has a fiduciary duty to provide services consistent with the
client’s best interest. As part of its investment advisory services, Registrant 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 objective. Based
upon these factors, there may be extended periods of time when Registrant determines that
changes to a client’s portfolio are neither necessary nor prudent. Clients nonetheless remain
subject to the fees described in Item 5 below during periods of account inactivity. Of
course, as indicated below, there can be no assurance that investment decisions made by
Registrant will be profitable or equal any specific performance level(s).
Account Aggregation Platforms. The Registrant, in conjunction with the services
provided by eMoney and/or Orion, may provide periodic 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 the Registrant (the “Excluded Assets”). The client or
their other advisors that maintain trading authority shall be exclusively responsible for the
investment performance of the Excluded Assets. The Registrant’s service regarding the
Excluded Assets is limited to reporting only and does not include investment
implementation. The Registrant does not have trading authority for the Excluded Assets.
The Registrant may occasionally make recommendations on how to manage or allocate the
Excluded Assets, but the client shall be responsible for implementing any accepted
recommendations on the Excluded Assets. The Registrant shall not be responsible for any
implementation errors on the Excluded Assets. In the event the client desires that the
Registrant to have trading authority over the Excluded Assets, the client may engage the
Registrant to do so pursuant to the terms and conditions of an advisory agreement between
the Registrant and the client. The eMoney platform also provides access to other types of
information and applications including financial planning concepts and functionality,
which should not, in any manner whatsoever, be construed as services, advice, or
recommendations provided by Registrant. The eMoney platform may also reflect Excluded
Assets owned by the client, and these Excluded Assets would be subject to the same
restrictions described above. Finally, Registrant 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 eMoney platform without Registrant’s assistance or oversight.
Non-Discretionary Services Limitations. Clients that determine to engage the Registrant
on a non-discretionary investment advisory basis must be willing to accept that the
Registrant cannot effect any account transactions without obtaining prior consent to any
such transaction(s) from the client. Thus, in the event that Registrant would like to make a
transaction for a client’s account, and client is unavailable, the Registrant will be unable to
effect the account transaction (as it would for its discretionary clients) without first
obtaining the client’s consent.
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 their
responsibility to promptly notify the Registrant if there is ever any change in their financial
situation or investment objectives for the purpose of reviewing, evaluating or revising
Registrant’s previous recommendations and/or services.
Disclosure Statement. A copy of this Disclosure Brochure shall be provided to each client
prior to, or contemporaneously with, the execution of the Investment Advisory Agreement
or Financial Planning and Consulting Agreement.
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 may, at any time, impose
reasonable restrictions, in writing, on the Registrant’s services.
Please Note: It remains the client’s responsibility to promptly notify the Registrant if there
is ever any change in their financial situation or investment objectives for the purpose of
reviewing, evaluating or revising Registrant’s previous recommendations and/or services.
D. The Registrant does not participate in a wrap fee program.
E. As of December 31, 2022, the Registrant had $189,674,932 in assets under management
on a discretionary basis and $17,431,351 in assets under management on a non-
discretionary basis.