Advisory Services
4. A. Advisory Firm Description
Physicians Financial Services, Inc. was formed in February 1987 by Con T. McDonald. Physicians
Financial Services, Inc.’s focus is on Individualized Money Management Services for individuals,
high net worth individuals, pension and profit sharing plans, corporations, charitable
organizations and trusts. Physicians Financial Services also provides tax, investment and financial
planning.
Principal Owner and Manager: Con T. McDonald
4.B Types of Advisory Services
Wealth Analysis and Planning Services:
Wealth Analysis and Planning Services are based on: financial goals and objectives, cash flow,
income tax liability, retirement, educational needs, estate tax and insurance requirements
(excluding property and casualty insurance and medical insurance – Physicians Financial Services,
Inc. strongly recommends utilizing a specialist for these services). After careful review,
compilation and analysis of the data supplied by the client, Physicians Financial Services, Inc.
prepares a plan which includes alternative recommendations for future investment. The
recommendations of the plan can be addressed through our financial services or utilized through
an outside service. Actual implementation is entirely at the discretion of the client which may
require professional assistance (i.e. an accountant, attorney, etc.). Recommendations may be in
both generic and specific form. The specific recommendations may include products offered by an
associated brokerage firm and/or investment advisory firm depending on the particular goals and
objectives of the client.
Money Management Services:
The Money Management Services are designed to meet the desires, objectives and needs of a
particular client or entity. This process includes determining risk tolerance and an in-depth
understanding of the client’s investment objectives. An investment objective and suitability
questionnaire may be used in determining the investment parameters. From the investment
questionnaire, an Investment Policy Statement and/or investment directive may be compiled
based on the questionnaire and discussion results.
From this process an appropriate money management strategy will be determined. Depending on
the client’s desires, objectives, and needs, we determine which manager(s) or combination of
manager(s), stocks, bonds, exchange-traded funds, and/or mutual funds to be utilized. The client
may choose to utilize our services (referred to as “internal”) and/or select from a list of “external”
managers.
Internal Money Management (Stocks, Mutual Funds, Bonds, Exchange-Traded Funds and
Cash):
Physicians Financial Services, Inc. classifies its internal money management services as a
"contrarian/ value" manager, which is an investment philosophy and investment program of
purchasing stocks and bonds of financially strong "value" companies, currently considered out-of-
favor in the financial markets. We further utilize mutual funds or exchange-traded funds for other
asset sector exposure – small-cap, mid-cap, large-cap, bond and foreign exposure. This is done to
provide more of a “balanced” approach, if a client desires.
The program is based on investing, compounding of interest, dividend reinvestment and
multiplication of stocks. If the client decides to deposit additional capital, Physicians Financial
Services, Inc. will invest the funds when deemed appropriate by market conditions. In addition to
a client’s investment objectives and risk level, market conditions will dictate the allocation
between stocks, mutual funds, bonds, exchange-traded funds, and cash.
We only give investment advice in the stock, mutual fund, exchange-traded fund, and bond
markets after we have determined that the client has sufficient capital and can assume the
inherent risks involved with these markets in the manner in which we invest their dollars. We do
not recommend Initial Public Offerings (IPOs) for clients due to
the inherent risk associated with
IPOs.
Unless a client directs us otherwise, our “internal” money management services are executed
through Charles Schwab serving as a third party custodian. Schwab, or other custodian(s), will
provide the client with confirmations of all trades and at least quarterly account statements.
External Money Managers (Stocks, Mutual Funds, Bonds, Exchange-Traded Funds, and
Cash):
Physicians Financial Services, Inc. may refer clients to a third party manager as part of its External
Money Managers program. Physicians Financial Services, Inc. negotiates fee compensation to be
received by our firm directly with the client and does not receive additional or higher
compensation from clients by selecting one money manager over another. Physicians Financial
Services, Inc. seeks to identify money managers who provide a different approach for money
management than our firm to help clients achieve their investment objectives and
goals. Physicians Financial Services, Inc. reviews third party manager(s) for strategy,
performance, and fees relative to the client’s investment objectives and goals.
Physicians Financial Services, Inc. relies on good faith representations and full disclosure from each
money manager and various monitoring services to report accurate, timely and factual materials,
performance numbers and other information. Physicians Financial Services, Inc. believes all
information received from the outside money managers and monitoring services to be accurate and
true but we have no way of verifying or guaranteeing the accuracy or completeness of the
information received. Physicians Financial Services, Inc. does not warrant any representations made
by any external money manager or monitoring service. Each external money manager is responsible
for compliance with applicable laws, regulations and disclosure matters deemed to be in their
control. Past performance information provided by money managers and various monitoring
services is not verified or audited; therefore, no assurance can be given that the performance
information is accurate. Past performance is not a guarantee of future results.
This level of money management may be executed through Charles Schwab due to the
coordination needed between the money manager, the clearing operation and Physicians
Financial Services, Inc. In addition to external money management through Charles Schwab
services, we also utilize other various external money management firms that do not use the
services of Charles Schwab. These various money management firms may be their own custodian.
All of these manager services and structures are explained in their ADV.
Charles Schwab or other custodian(s), provide the client with confirmations of all trades and at
least quarterly account statements.
For each external money manager being considered, we provide a copy of their current ADV Part 2
to each client, which provides a description of services, fees, conflicts of interest and risk.
The client may terminate the relationship with the external money manager by giving written
notice without penalty, subject to the payment of any fees incurred.
4.C. Client Investment Objectives/Restrictions
Based on client interaction (personal discussions, questionnaires, etc.), Physicians Financial
Services , Inc. will make every effort to tailor investment services within mutually agreed
parameters. Depending on each client’s situation, it is possible for a client to impose reasonable
restrictions on the account if desired. With respect to external money managers, clients may or
may not be able tailor or impose restrictions on the account depending on each individual external
money manager.
4.D. Wrap-Fee Programs
Adviser does not participate in, nor is it a sponsor of, any wrap fee programs.
4.E Assets Under Management as of 12/31/2023
Discretionary basis: $359,884,359
Non-Discretionary basis: $3,837,913