General Information
Holcombe Financial, Inc. (“HFI,” “we” or “us”) was formed in 2007 and provides financial planning, portfolio
management, and general consulting services to our clients. We also provide advisory and management
services to private investment vehicles.
Russell E. (“Rusty”) Holcombe is the sole principal owner of HFI. Please see Brochure Supplements,
Exhibit A, for more information on Mr. Holcombe and other individuals who formulate investment advice
and have direct contact with clients, or have discretionary authority over client accounts.
As of December 31, 2023, we managed $329,894,461 on a discretionary basis, and $17,158,169 assets on a
non-discretionary basis. We do not participate in or offer any wrap programs.
SERVICES PROVIDED
The beginning of each client relationship begins with a detailed discussion with you to assess what you
want to accomplish and address what is bothering you. Our process is designed to uncover the purpose of
your wealth and how you wish it would make an impact in your life. In this discovery phase, we spend time
with you, asking questions, discussing your investment experience and financial circumstances, and
reviewing your options. Risks of investing are also discussed. Based on our reviews, we generally develop
with you:
• a financial outline for you based on your financial circumstances and goals, (the “Financial Profile”
or “Profile”); and
• your investment objectives and guidelines (the “Investment Plan” or “Plan”).
The Financial Profile reflects your current financial picture and a look to your future goals. The Investment
Plan outlines the types of investments HFI will make on your behalf to meet those goals. The Profile and
the Plan are discussed regularly with you, but are not necessarily written documents.
In cases where we provide general consulting services, we will work with you to prepare an appropriate
summary of the specific project(s) to the extent necessary or advisable under the circumstances.
Financial Planning
We believe that our financial planning services are paramount to your success. We rarely provide Portfolio
Management services to those not willing to engage in our financial planning process. We think a good
financial plan has four components:
1. It understands what independence means in both financial and emotional terms for the client.
2. It understands the importance of cash flow to the survival of the client.
3. It understands the importance of risk mitigation in life. Not all risks are possible to protect against,
but a good financial planning process tries to uncover and either eliminate or insulate them if
possible.
4. It creates actionable tasks for the client to improve their probability of independence.
Portfolio Management
As described above, at the beginning of a client relationship, we meet with you, gather information, and
perform research and analysis as necessary to develop your Investment Plan. The Investment Plan will be
updated from time to time upon your request, or when determined to be necessary or advisable by us based
on updates to your financial or other circumstances. We will monitor your portfolio’s performance on a
continuous basis, and rebalance the portfolio whenever we think necessary, as changes occur in market
conditions, your financial situation, or both.
To implement your Investment Plan, we will manage your investment portfolio on a discretionary basis.
As a discretionary investment adviser, we will have the authority to supervise and make investments in
your portfolio without prior consultation with you. Notwithstanding our discretionary authority, we will not
engage in transactions in private funds without your prior authorization.
Notwithstanding the foregoing, you may impose certain written restrictions on us in the management of
your investment portfolio, such as prohibiting the inclusion of certain types of investments in your
investment portfolio or prohibiting the sale of certain investments held in the account at the
commencement of our relationship. You should note, however, that if you impose restrictions it may
adversely affect the composition and performance of your investment portfolio. You should also note that
your investment portfolio is treated individually by considering each purchase or sale for your account.
For these and other reasons, performance of client investment portfolios within the same investment
objectives, goals and/or risk tolerance may differ, and you should not expect that the composition or
performance of your investment portfolio would necessarily be consistent with similar clients of the firm.
Portfolio Management for Held-Away Accounts
Clients can choose to have us provide discretionary management for certain assets that are not held at a
qualified custodian with which we have an advisory relationship (i.e., “held-away accounts”). We are able
to provide investment management services for held-away accounts through a third-party order
management system, Pontera Solutions, Inc. (“Pontera”). Held-away accounts typically include 401(k)
accounts, 403(b)s, HSA accounts, 529 plans, and other similar accounts. We can view held-away accounts
through the Pontera website, and enter trading instructions through their trading tool. Participating clients
are provided access to the Pontera website and from there, directly link their held-away account to Pontera
using their personal login credentials. The client’s login credentials are never made available to, held or
stored by us. Clients should understand that our investment of the assets held within such accounts is
limited to the various investment options made available by the account sponsor, issuer, or custodian. The
goal is to allocate the portfolio assets in such a way as to improve account performance over time, minimize
loss during difficult markets, and manage internal fees that harm account performance. We regularly
review the available investment options in these accounts, monitor them, and rebalance the assets when
deemed necessary in light of the client’s investment goals and risk tolerance, and consideration of current
economic and market trends.
Pontera charges us a percentage fee based on the amount of the client assets we manage through their
platform. Clients do not pay any additional fee to Pontera or to us in connection with platform participation.
We are not affiliated with Pontera and receive no compensation from Pontera for using their platform.
Separate Account Managers
When appropriate and in accordance with the Investment Plan for a client, we may recommend the use of
one or more Separate Account Managers, each a “Manager.” Having access to various Managers offers a
wide variety of manager styles, and offers clients the opportunity to utilize more than one Manager if
necessary to meet the needs and investment objectives of the client. We will select or recommend the
Manager(s) we deem most appropriate for the client. Factors that we consider in recommending/selecting
Managers generally include the client’s stated investment objective(s), management style, performance,
risk level, reputation, financial strength, reporting, pricing, and research.
The Manager(s) will generally be granted discretionary trading authority to provide investment
supervisory services for the portfolio. Under certain circumstances, we retain the authority to terminate
the Manager’s relationship or to add new Managers without specific client consent. In other cases, the client
will ultimately select one or more Managers recommended by us. Fees paid to such Manager(s) are
separate from and in addition to the fee assessed by HFI .
In any case, with respect to assets managed by a Manager, our role will be to monitor the overall financial
situation of the client, to monitor the investment approach and performance of the Manager(s), and to assist
the client in understanding the investments of the portfolio.
Additionally, certain Managers may impose more restrictive account requirements than HFI and billing
practices may vary. In such instances, we may be required to alter our corresponding account requirements
and/or billing practices to accommodate those of the Manager(s).
General Consulting
In addition to the foregoing services, we may provide general consulting services.
These services are
generally provided on a project basis, and usually include, without limitation, cash flow planning for certain
events such as the sale of a business, education expenses or retirement, estate planning analysis, income
tax planning analysis and review of your insurance portfolio, as well as other matters specific to you that
we agree upon. The scope and fees for consulting services will be negotiated with you at the time of
engagement for the applicable project.
Affiliated Private Funds
We serve as the General Partner/Managing Member and investment manager of the HF Retail Income Fund,
LLC, HF Office Income Fund, LLC and HF FMC Income Fund II, LLC (collectively, the “Affiliated Funds”). The
Affiliated Funds are pooled investment vehicles that are not registered under the Investment Company Act
of 1940, as amended, in reliance on the exemptions provided in Sections 3(c)(1) or 3(c)(7) thereunder, as
applicable. Additionally, the Affiliated Funds are not registered with the Securities and Exchange
Commission and investors must be “accredited investors,” within the meaning under Regulation D of the
Securities Act of 1933; and in some instances, must also be “qualified clients” within the meaning of Rule
205-3 of the Investment Advisers Act of 1940.
From time to time, as appropriate and in accordance with the established Investment Plan and risk
tolerance of certain of our clients, we recommend investments in one or more of the Affiliated Funds.
Clients investing in the Affiliated Funds are assessed a fee that is a percentage of assets under management
in the applicable fund. In addition, depending on the specific fund, we also receive a performance allocation
from investors’ accounts, equal to a percentage of the net profits for the investor as described in the fund’s
offering documents. A performance-based fee can create an incentive to make risker, more speculative
investments than would be the case under a solely asset-based fee arrangement. Please see Item 6 -
Performance-Based Fees and Side-By-Side Management below for more information.
Our investors are provided with private placement memorandums and other offering and subscription
documentation that detail the nature, risks and associated fees of each pooled investment vehicle. It is
important that you read these documents before investing to fully understand the types of investments,
risks and conflicts pertaining to the private funds. Please see Item 10, Other Financial Industry Activities
and Affiliations for more information about the Affiliated Funds.
Retirement Plan Advisory Services
Establishing a sound fiduciary governance process is vital to good decision-making and to ensuring that
prudent procedural steps are followed in making investment decisions. we will provide Retirement Plan
consulting services to Plans and Plan Fiduciaries as described below. The particular services provided will
be detailed in the consulting and/or management agreement. The appropriate Plan Fiduciary(ies)
designated in the Plan documents (e.g., the Plan sponsor or named fiduciary) will (i) make the decision to
retain our firm; (ii) agree to the scope of the services that we will provide; and (iii) make the ultimate
decision as to accepting any of the recommendations that we may provide. The Plan Fiduciaries are free to
seek independent advice about the appropriateness of any recommended services for the Plan. Retirement
Plan consulting services may be offered individually or as part of a comprehensive suite of services.
The Employee Retirement Income Security Act of 1974 (“ERISA”) sets forth rules under which Plan
Fiduciaries may retain investment advisers for various types of services with respect to Plan assets. For
certain services, HFI will be considered a fiduciary under ERISA. For example, we will act as an ERISA §
3(21) fiduciary when providing non-discretionary investment advice to the Plan Fiduciaries by
recommending a suite of investments as choices among which Plan Participants may select. Also, to the
extent that the Plan Fiduciaries retain us to act as an investment manager within the meaning of ERISA §
3(38), we will provide discretionary investment management services to the Plan.
Fiduciary Consulting Services
• Investment Selection Services
We will provide Plan Fiduciaries with recommendations of investment options consistent with
ERISA section 404(c). Plan Fiduciaries retain responsibility for the final determination of
investment options and for compliance with ERISA section 404(c).
• Non-Discretionary Investment Advice
We will provide Plan Fiduciaries and Plan Participants general, non-discretionary investment
advice regarding asset classes and investments.
• Investment Monitoring
We will assist in monitoring the plan’s investment options by preparing periodic investment
reports that document investment performance, consistency of fund management and
conformation to the guidelines set forth in the investment policy statement and we will make
recommendations to maintain or remove and replace investment options. The details of this aspect
of service will be enumerated in the engagement agreement between the parties.
Fiduciary Management Services
• Discretionary Management Services
When retained as an investment manager within the meaning of ERISA § 3(38), we provide
continuous and ongoing supervision over the designated retirement plan assets. HFI will actively
monitor the designated retirement plan assets and provide ongoing management of the assets.
When applicable, we will have discretionary authority to make all decisions to buy, sell or hold
securities, cash or other investments for the designated retirement plan assets in our sole discretion
without first consulting with the Plan Fiduciaries. We also have the power and authority to carry
out these decisions by giving instructions, on your behalf, to brokers and dealers and the qualified
custodian(s) of the Plan for our management of the designated retirement plan assets.
• Discretionary Investment Selection Services
We will monitor the investment options of the Plan and add or remove investment options for the
Plan without prior consultation with the Plan Fiduciaries. We will have discretionary authority to
make and implement all decisions regarding the investment options that are available to Plan
Participants.
• Investment Management via Model Portfolios.
We will provide discretionary management of Model Portfolios among which the participants may
choose to invest as Plan options. Plan Participants will also have the option of investing only in
options that do not include Model Portfolios (i.e., the Plan Participants may elect to invest in one or
more of the mutual fund options made available in the Plan, and choose not to invest in the Model
Portfolios at all).
Non-Fiduciary Services
• Participant Enrollment
We will assist with group enrollment meetings designed to increase retirement Plan participation
among employees and investment and financial understanding by the employees.
Retirement Account Transfers and Plan Rollovers
We are fiduciaries under the Investment Advisers Act of 1940 and when we provide investment advice to
you regarding your retirement plan account or individual retirement account, we are also fiduciaries 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. If we recommend that a client transfer their
IRA or roll over retirement plan assets into an account to be managed by us, such a recommendation creates
a conflict of interest if we will earn a new (or increase our current) advisory fee because of the
transfer/rollover. We have a fiduciary duty and must act in your best interest when making a
recommendation regarding whether to transfer your IRA assets, maintain investments in a retirement plan,
take a distribution from a retirement plan or roll over investments from a retirement plan to a Rollover
IRA. Clients are under no obligation to transfer an IRA or rollover plan assets to an IRA managed by us or
to engage us to monitor and/or manage the account while maintained at a client’s employer.