A. Ivy League Financial Advisors LLC (the “Registrant”) is a Maryland Limited Liability
Company formed in August 1998. The Registrant became registered as an investment
adviser in February 1999. The Registrant is principally owned by Christopher Brown, who
is the Registrant’s Managing Member and Chief Compliance Officer.
B. As discussed below, the Registrant offers to its clients (individuals, high net worth
individuals, pension and profit-sharing plans, 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 determine to engage the Registrant to provide discretionary and/or non-
discretionary investment advisory services on a fee-only basis. The Registrant’s annual
investment advisory fee is based upon a percentage (%) of the market value of the assets,
which may include accrued interest (see Item 5 below), placed under the Registrant’s
management on a stepped-up basis. Before 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.
Other Services. Registrant may also render investment advisory management services to
clients relative to: (1) fixed and/or variable annuity products that they may own, or (2) their
individual employer sponsored retirement plans. In so doing, Registrant either directs or
recommends the allocation of client assets among the various subaccounts which comprise
the variable annuity product or the retirement plan. For these services, Registrant’s
management fee is paid quarterly in advance, based upon the market value of the assets on
the last day of the previous quarter. The client assets shall be maintained at either the
specific insurance company that issued the variable annuity product, which is owned by
the client, or at the custodian designated by the sponsor of the client’s retirement plan.
To commence the investment advisory process, Registrant will develop a written
investment policy statement (“IPS”) with the client based upon personal discussions about
the clients’ individual circumstances, goals, risk tolerance, and investment objectives.
Registrant will then construct an investment portfolio based on that IPS, which generally
falls into one of two types of portfolio: “Growth” or “Withdrawal.” Registrant will then
allocate the client’s assets consistent with the client’s IPS.
For the Growth portfolios, Registrant seeks to construct a well-diversified portfolio across
broad asset classes including, primarily through open-ended mutual funds, exchange traded
funds (“ETFs”) index mutual funds, and individual bonds.
For Withdrawal portfolios, Registrant typically allocates one to three years of a client’s
annual cash flow needs in cash equivalent investments; an additional one to three years of
additional cash flow needs in relatively conservative investments, such as individual bonds
or “balanced” mutual funds; and the remaining balance allocated as generally described for
Growth portfolios above.
Registrant will then conduct ongoing monitoring and review of account performance and
asset allocation as compared to the IPS, and may execute or recommend executing
transactions based on those reviews or other triggering events.
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
To the extent requested by the client, the Registrant 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 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 and when the engagement is
complete. In performing its services, Registrant shall not be required to verify any
information received from clients and is expressly authorized to rely thereon.
FINANCIAL PLANNING IMPLEMENTATION SERVICES
At the request of the client, the client can engage the Registrant to implement Financial
Planning recommendations and provide ongoing financial advice on a fee-only basis.
Examples of these services includes annual updates to cash flow analysis, risk management
implementation services, estate planning implementation services, retirement planning
implementation services, and college funding implementation services.
RETIREMENT PLAN CONSULTING SERVICES
The Registrant also offers retirement plan consulting services, through which it assists
sponsors of self-directed retirement plans with the selection and/or monitoring of
investment alternatives (generally open-end mutual funds and exchange traded funds) from
which plan participants can choose in self-directing the investments for their individual
plan retirement accounts. In addition, to the extent requested by the plan sponsor, the
Registrant may 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 are set forth in a Retirement Plan Consulting
Agreement between the Registrant and the plan sponsor.
ERISA PLAN and 401(k) INDIVIDUAL ENGAGEMENTS:
• Trustee Directed Plans. Registrant may be engaged to provide discretionary
investment advisory services to ERISA retirement plans, whereby the Firm shall
manage Plan assets consistent with the investment objective designated by the Plan
trustees. In such engagements, Registrant will serve as an investment fiduciary as
that term is defined under The Employee Retirement Income Security Act of 1974
(“ERISA”). Registrant will generally provide services on an “assets under
management” fee basis per the terms and conditions of an Investment Advisory
Agreement between the Plan and the Firm.
• Participant Directed Retirement Plans. Registrant may also provide investment
advisory and consulting services to participant directed retirement plans per the
terms and conditions of a Retirement Plan Services Agreement between Registrant
and the plan. For such engagements, Registrant shall assist the Plan sponsor with
the selection of an investment platform from which Plan participants shall make
their respective investment choices (which may include investment strategies
devised and managed by Registrant), and, to the extent engaged to do so, may also
provide corresponding education to assist the participants with their decision
making process.
• Client Retirement Plan Assets. If requested to do so, Registrant shall provide
investment advisory services relative to 401(k) plan assets maintained by the client
in conjunction with the retirement plan established by the client’s employer. In
such event, Registrant shall allocate (or recommend that the client allocate) the
retirement account assets among the investment options available on the 401(k)
platform. Registrant’s ability shall be limited to the allocation of the assets among
the investment alternatives available through the plan. Registrant will not receive
any communications from the plan sponsor or custodian, and it shall remain the
client’s exclusive obligation to notify Registrant of any changes in investment
alternatives, restrictions, etc. pertaining to the retirement account. Unless expressly
indicated by the Registrant to the contrary, in writing, the client’s 401(k) plan
assets shall be included as assets under management for purposes of Registrant
calculating its advisory fee.
MISCELLANEOUS
Limitations of Financial Planning and Non-Investment Consulting/Implementation
Services. To the extent requested by the client, the Registrant may provide financial
planning or consulting services regarding investment and non-investment related matters,
such as estate planning, tax planning, insurance, etc. The Registrant does not serve as a law
firm, accounting firm, or insurance agency, and no portion of Registrant’s services should
be construed as legal, accounting, or insurance implementation services. Accordingly,
Registrant does not prepare estate planning documents, tax returns or sell insurance
products. Unless specifically agreed in writing, neither Registrant nor its representatives
are responsible to: implement any financial plans or financial planning advice; provide
ongoing financial planning services; or provide ongoing monitoring of financial plans or
financial planning advice. The client retains absolute discretion over all financial planning
and related implementation decisions, and is free to accept or reject any recommendation
from Registrant and its representatives in that respect. Registrant’s financial planning and
consulting services are completed upon communicating its recommendations to the client,
upon delivery of the written financial plan, or upon termination of the applicable
agreement. To the extent requested by a client, Registrant may recommend the services of
other professionals for certain non-investment implementation purposes (i.e., attorneys,
accountants, insurance agents, etc.). Clients are under no obligation to engage the services
of any recommended professional, who shall be solely responsible for the quality and
competency of the services they provide. If the client engages any unaffiliated
recommended professional, and a dispute arises related to the engagement, the client
should 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 the Registrant, shall be responsible for the quality and competency of the services
provided.
Non-Discretionary Service Limitations. Clients that determine to engage Registrant on a
non-discretionary investment advisory basis must be willing to accept that Registrant
cannot execute any account transactions without obtaining the client’s prior consent to the
transactions. Therefore, if Registrant would like to make a transaction for a client’s account
(including removing a security that the Registrant no longer believes is appropriate, adding
a security that the Registrant believes is appropriate, or in the event of a market correction),
and the client is unavailable, Registrant will be unable to execute the account transactions
(as it would for its discretionary clients) without first obtaining the client’s consent. This
may place affected clients at an economic disadvantage.
Retirement Plan Rollovers – No Obligation / Conflict of Interest. A client or prospective
client leaving an employer 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. Whether Registrant 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), Registrant 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
Registrant. The Registrant’s Chief Compliance Officer, Christopher Brown, remains
available to address any questions that a client or prospective client may have regarding its
prospective engagement and the corresponding conflict of interest presented by such
engagement.
Use of Mutual and Exchange Traded Funds. Registrant utilizes mutual funds and exchange
traded funds for its client portfolios. In addition to Registrant’s investment advisory fee
described below, and transaction and/or custodial fees discussed above, 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 the Registrant are generally available directly to the
public. Thus, a client can generally obtain the funds recommended and/or utilized by
Registrant independent of engaging Registrant as an investment advisor. However, if a
prospective client does so, then they will not receive Registrant's initial and ongoing
investment advisory services.
Please Note-Use of DFA Mutual Funds. Registrant 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
Registrant’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.
Custodian Charges-Additional Fees. As discussed below at Item 12 below,
when requested
to recommend a broker-dealer/custodian for client accounts, Registrant generally
recommends that Charles Schwab & Co., Inc. (“Schwab”) serve as the broker-
dealer/custodian for client investment management assets. Broker-dealers such as Schwab
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, 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 Registrant 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). These
fees/charges are in addition to Registrant’s investment advisory fee at Item 5 below.
Registrant does not receive any portion of these fees/charges. ANY QUESTIONS:
Registrant’s Chief Compliance Officer, Christopher Brown, remains available to
address any questions that a client or prospective client may have regarding the
above.
Borrowing Against Assets/Risks. A client who has a need to borrow money could
determine to do so by using:
• Margin-The account custodian or broker-dealer lends money to the client. The
custodian charges the client interest for the right to borrow money, and uses the
assets in the client’s brokerage account as collateral or
• Pledged Assets Loan- In consideration for a lender (i.e., a bank, etc.) to make a
loan to the client, the client pledges its investment assets held at the account
custodian as collateral.
These above-described collateralized loans are generally utilized because they typically
provide more favorable interest rates than standard commercial loans. These types of
collateralized loans can assist with a pending home purchase, permit the retirement of more
expensive debt, or enable borrowing in lieu of liquidating existing account positions and
incurring capital gains taxes. However, such loans are not without potential material risk
to the client’s investment assets. The lender (i.e., custodian, bank, etc.) will have recourse
against the client’s investment assets in the event of loan default or if the assets fall below
a certain level. For this reason, Registrant does not recommend such borrowing unless it is
for specific short-term purposes (i.e., a bridge loan to purchase a new residence). Registrant
does not recommend such borrowing for investment purposes (i.e., to invest borrowed
funds in the market). Regardless, if the client was to determine to utilize margin or a
pledged assets loan, the following economic benefits would inure to Registrant:
• by taking the loan rather than liquidating assets in the client’s account, Registrant
continues to earn a fee on such Account assets;
• if the client invests any portion of the loan proceeds in an account to be managed
by Registrant, Registrant will receive an advisory fee on the invested amount;
and,
• if Registrant’s advisory fee is based upon the higher margined account value (see
margin disclosure at Item 5 below), Registrant will earn a correspondingly higher
advisory fee. This could provide Registrant with a disincentive to encourage the
client to discontinue the use of margin.
Please Note: The client must accept the above risks and potential corresponding
consequences associated with the use of margin or a pledged assets loans.
Portfolio Activity. Registrant has a fiduciary duty to provide services consistent with the
client’s best interest. 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, 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 Registrant 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 the Registrant will be profitable or
equal any specific performance level(s).
Cash Positions. Registrant continues to treat cash as an asset class. As such, unless
determined to the contrary by Registrant, all cash positions (money markets, etc.) shall
continue to be included as part of assets under management for purposes of calculating
Registrant’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), Registrant 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, Registrant’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, Registrant 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 Registrant 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. Please Note: The above does not apply to the cash component
maintained within a Registrant 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.
Please Also Note: The client shall remain exclusively responsible for yield dispersion/cash
balance decisions and corresponding transactions for cash balances maintained in any
Registrant unmanaged accounts. ANY QUESTIONS: Registrant’s Chief Compliance
Officer, Christopher Brown, remains available to address any questions that a client
or prospective client may have regarding the above.
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 Brochure. A copy of the Registrant’s written disclosure statement as set forth
on Part 2 of Form ADV and Form CRS (Client Relationship Summary) shall be provided
to each client prior to, or contemporaneously with, the execution of the applicable form of
client agreement.
Asset Aggregation / Reporting Services. Registrant may provide access to reporting
services such as ByAllAccounts through one or more third-party aggregation / reporting
platforms that can reflect all of the client’s investment assets, including those investment
assets that the client has not engaged the Registrant to manage (the “Excluded Assets”).
Registrant’s service for the Excluded Assets is strictly limited to reporting, and specifically
excludes investment management or implementation. Unless also agreed to otherwise, in
writing, Registrant does not provide investment management, monitoring or
implementation services for the Excluded Assets. The client can engage the Registrant to
provide investment management services for the Excluded Assets pursuant to the terms
and conditions of the Investment Advisory Agreement between Registrant and the client.
Further, the client and/or their other advisors that maintain trading authority, and not
Registrant, shall be exclusively responsible for the investment performance or related
activity (such as timing and trade errors) pertaining to the Excluded Assets. The third-party
aggregation / reporting platforms may also provide access to financial planning information
and applications, which should not be construed as services, advice, or recommendations
provided by Registrant. Accordingly, 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 third-party reporting platforms without Registrant’s participation
or oversight.
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 the Registrant. Generally, with potential
exceptions, the Registrant 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 Registrant 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 the Registrant) 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 the Registrant does not maintain custodian access
and/or trading authority; and,
• hold other securities and/or own accounts for which the Registrant does not
maintain custodian access and/or trading authority.
Corresponding Services/Fees. When agreed to by the Registrant, the Registrant 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 the
Registrant; and, (5) include the market value of all such securities for purposes of
calculating advisory fee.
Cybersecurity Risk. The information technology systems and networks that Registrant and
its third-party service providers use to provide services to Registrant’s clients employ
various controls, which are designed to prevent cybersecurity incidents stemming from
intentional or unintentional actions that could cause significant interruptions in Registrant’s
operations and result in the unauthorized acquisition or use of clients’ confidential or non-
public personal information. Clients and Registrant 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 Registrant has established processes to reduce the risk
of cybersecurity incidents, there is no guarantee that these efforts will always be successful,
especially considering that Registrant 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.
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 objectives. Thereafter, the Registrant
shall allocate and/or recommend that the client allocate investment assets consistent with
the designated investment objectives. The client may, at any time, impose reasonable
restrictions, in writing, on the Registrant’s services.
D. The Registrant does not participate in a wrap fee program.
E. As of December 31, 2023, the Registrant had $133,836,836 in assets under management
on a discretionary basis.