Description of Services and Fees
We are an investment adviser that is registered with the U.S. Securities and Exchange Commission,
based in Williamsport, Pennsylvania. We are organized as a corporation under the laws of the
Commonwealth of Pennsylvania. Prior to our transition of our organizational form to a corporation,
Hudock Capital Group was a limited liability company organized under the laws of the Commonwealth
of Pennsylvania. Our SEC registration succeeded to our new entity on July 1, 2019. We have been
providing investment advisory services since 2009. Our firm is employee owned. Barbara B. Hudock
and Michael J. Hudock, Jr. are the Trustees of the Hudock, Inc. Employee Stock Ownership Plan and
Trust.
Currently, we offer the following investment advisory services, which are personalized to each
individual client:
• Asset Management Services/Wrap Fee Program
• Financial Planning Services
The following paragraphs describe our services and fees. Please refer to the description of each
investment advisory service listed below for information on how we tailor our advisory services to your
individual needs. As used in this brochure, the words "we", "our" and "us" refer to Hudock Capital
Group and the words "you", "your" and "client" refer to you as either a client or prospective client of our
firm. Also, you may see the term Associated Person throughout this Brochure. As used in this
Brochure, our Associated Persons are our firm's officers, employees, and all individuals providing
investment advice on behalf of our firm. Individuals providing investment advice on behalf of our firm
are also referred to as Relationship Managers.
This Form ADV Part 2 is offered to potential and existing clients to provide an understanding of the
services we provide, our conflicts of interest, and the experience and education of our personnel. The
Form ADV Part 2 and its related Schedules are known collectively as the Disclosure Brochure.
Asset Management Services
We offer discretionary and non-discretionary asset management services predominately through our
Wrap Fee Program. Our investment advice is tailored to meet our clients' needs and investment
objectives. If you retain our firm for asset management services, we will meet with you to determine
your investment objectives, risk tolerance, and other relevant information (the "suitability information")
at the beginning of our advisory relationship. We will use the Client Profile and the suitability
information we gather to develop a strategy that enables our firm to give you continuous and focused
investment advice and/or to make investments on your behalf. As part of our asset management
services, we may customize an investment portfolio for you in accordance with your risk tolerance and
investing objectives. We may also invest your assets using a predefined strategy, or we may invest
your assets according to one or more model portfolios developed by our firm. Once we construct an
investment portfolio for you, or select a model portfolio, we will monitor your portfolio's performance on
an ongoing basis, and will rebalance the portfolio as required by changes in market conditions and in
your financial circumstances.
If you participate in our discretionary asset management services, we require you to grant our firm
discretionary authority to manage your account. Discretionary authorization will allow our firm to
determine the specific securities, and the amount of securities, to be purchased or sold for your
account without your approval prior to each transaction. Discretionary authority is typically granted by
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the investment management agreement you sign with our firm, a power of attorney, or trading
authorization forms. You may limit our discretionary authority (for example, limiting the types of
securities that can be purchased for your account) by providing our firm with your restrictions and
guidelines in writing. If you enter into non-discretionary arrangements with our firm, we must obtain
your approval prior to executing any transactions on behalf of your account.
Advised Accounts: In some cases, you may elect to have us advise you on certain accounts without
delegating the decision-making to our firm. We will make recommendations with regard to these
accounts; however, you are responsible for deciding whether or not to implement our
recommendations and for effecting any and all transactions on these advised accounts.
As part of our asset management services, we may use one or more outside portfolio managers to
manage your account on a discretionary basis. We will regularly monitor the performance of your
accounts managed by portfolio manager(s) and may hire and fire any portfolio manager without your
prior approval. Our ability to hire and fire portfolio managers on your behalf is based on you granting
our firm discretionary authority, which is typically granted by the investment management agreement
you sign with our firm, a power of attorney, or trading authority forms. We may pay a portion of our
advisory fee to the portfolio manager managing your account, or the outside portfolio manager may bill
you on your account directly, depending on the specific agreement with each portfolio manager. For
more information, please refer to Wrap Fee Program brochure.
Also, as part of our asset management services, to the extent specifically requested by the client, we
may provide financial planning and consulting services. In the event that the client requires
extraordinary planning and/or consultation services (to be determined in the sole discretion of Hudock
Capital Group), we may determine to charge for such additional services, the dollar amount of which
shall be set forth in a separate written notice to the client.
Wrap Fee Program
We are a sponsor of a wrap fee program, which is a type of investment program that provides clients
with asset management services for a single fee that includes management fees and transaction costs.
If you participate in our portfolio management services, you will pay our firm a single fee, which
includes our asset management fees, certain transaction costs, and custodial and administrative costs.
The overall cost you will incur if you participate in our wrap fee program may be higher or lower than
you might incur by paying transaction costs separately. To compare the cost of the wrap fee program
with non-wrap fee portfolio management services, you should consider the frequency of trading activity
associated with our investment strategies, the brokerage commissions charged by other
broker/dealers, and the advisory fees charged by investment advisers.
If you participate in our wrap fee program, we will provide you with a separate Wrap Fee Program
brochure, ADV Part 2A, Appendix 1, explaining the program and costs associated with the program.
Financial Planning Services
We offer broad-based, modular, and consultative financial planning services. Financial planning will
typically involve providing a variety of advisory services to clients regarding the management of their
financial resources based upon an analysis of their individual needs. If you engage our firm for
financial planning services, we will meet with you to gather information about your financial
circumstances and objectives. Once we review and analyze the information you provide to our firm, we
will deliver a plan to you, designed to help you achieve your stated financial goals and objectives.
Financial plans are based on your financial situation at the time we present the plan to you, and on the
financial information you provide to our firm. You must promptly notify our firm if your financial
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situation, goals, objectives, or needs change.
You are under no obligation to act on our financial planning recommendations. Should you choose to
act on any of our recommendations, you are not obligated to implement the financial plan through any
of our other investment advisory services. Moreover, you may act on our recommendations by placing
securities transactions with any brokerage firm.
We charge a fixed fee for financial planning services, which generally ranges between $1,000 and
$5,000. The fee is negotiable depending upon the complexity and scope of the plan, your financial
situation, and your objectives.
If you only require advice on a single aspect of your finances, we offer modular financial planning/
general consulting services on an hourly basis. Our rate for such services ranges between $100 and
$325 per hour and is negotiable depending on the scope and complexity of the plan, your financial
situation, and your objectives. An estimate of the total time/cost will be determined at the start of the
advisory relationship. In limited circumstances, the cost/time could potentially exceed the initial
estimate. In such cases, we will notify you in advance and request that you approve the additional fee.
Fees are due upon completion of services rendered.
We may waive these fees at our discretion if the recommendations are implemented through a client
relationship with an Associated Person or Persons in their separate capacities as insurance agents,
registered representatives, or advisors. Please see the "Fees and Compensation" section below for
more information on Associated Persons' affiliations.
You may terminate the financial planning agreement by providing written notice to our firm. You will
incur a pro rata charge for services rendered prior to the termination of the agreement. No refunds are
applicable since fees are paid at the completion of the financial planning process.
Types of Investments
We primarily offer advice on investment company securities (mutual funds) and exchange traded funds
(ETFs). We may also offer advice on equity securities, corporate debt securities, certificates of deposit,
municipal securities, investment company securities, U.S. Government securities, and options
contracts on securities.
Assets Under Management
As of December 31, 2023, we managed $694,090,957 in client assets on a discretionary basis and
$53,138,989 in client assets on a non-discretionary basis through our Wrap Fee Program.
Miscellaneous Disclosures
Limitations of Financial Planning and Non-Investment Consulting/Implementation Services. As
indicated above, to the extent requested by a client, we may provide financial planning and related
consulting services. Neither we nor our adviser representatives assist clients with the implementation
of any financial plan, unless agreed to do so in writing. We do not monitor a client’s financial plan, and
it is the client’s responsibility to revisit the financial plan with us, if desired.
We may provide financial planning and related consulting services regarding non-investment related
matters, such as estate planning, tax planning, insurance, etc. We do not serve as an attorney or
accountant, and no portion of its services should be construed as legal or accounting services.
Accordingly, we do not prepare estate planning documents or tax returns. To the extent requested by
you, we may recommend the services of other professionals for certain non-investment implementation
purpose (i.e., attorneys, accountants, insurance agents, etc.), including certain of our representatives
in their separate individual capacities as registered representatives of APW Capital, Inc., a securities
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broker/dealer and/or as licensed insurance agents. You are under no obligation to engage the
services of any such recommended professional. You retain absolute discretion over all such
implementation decisions and are free to accept or reject any recommendation from us and/or our
representatives.
If you engage any recommended unaffiliated professional, and a dispute arises thereafter relative to
such engagement, you agree 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.)
shall be responsible for the quality and competency of the services they provide.
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). If we recommend that a client roll over their
retirement plan assets into an account to be managed by us, such a recommendation creates a conflict
of interest if we will earn new (or increase its current) compensation as a result of the rollover. If we
provide 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), we are 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 our firm, whether it is from an employer’s plan or an existing IRA.
Independent Managers. We may allocate (and/or recommend that you allocate) a portion of your
investment assets among unaffiliated independent investment managers in accordance with your
designated investment objective(s). In such situations, the Independent Manager(s) shall have day-to-
day responsibility for the active discretionary management of the allocated assets. We shall continue
to render investment advisory services to the client relative to the ongoing monitoring and review of
account performance, asset allocation and client investment objectives. Factors which we shall
consider in recommending Independent Manager(s) include your designated investment objective(s),
management style, performance, reputation, financial strength, reporting, pricing, and research. The
investment management fee charged by the Independent Manager(s) is separate from, and in addition
to, our advisory fee and will be disclosed to the client before entering into the Independent Manager
engagement and/or subject to the terms and conditions of a separate agreement between the client
and the Independent Manager(s).
Non-Discretionary Service Limitations. If you determine to engage us on a non-discretionary
investment advisory basis you must be willing to accept that we cannot effect any account transactions
without obtaining prior consent to any such transaction(s) from you. Thus, in the event that we would
like to make a transaction for your account (including an individual holding or in the event of general
market correction), and you are unavailable, we will be unable to effect the account transaction(s) (as
we would for our discretionary clients) without first obtaining your consent.
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 we may utilize
independent of engaging our firm as an investment advisor. However, if a prospective client
determines to do so, he/she will not receive our initial and ongoing investment advisory services. In
addition to our 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).
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Socially Responsible (ESG) 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 we recommend
and/or undertake), there can be no assurance that investment in ESG securities or funds will be
profitable or prove successful. We do not maintain or advocate an ESG investment strategy but will
seek to employ ESG if directed by a client to do so. If implemented, we 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.
Non-Traded REITs. We may utilize certain non-traded REITs in a client’s investment portfolio. REITs
are subject to risks generally associated with investing in real estate, such as: possible declines in the
value of real estate; adverse general and local economic conditions; possible lack of availability of
mortgage funds; changes in interest rates; and environmental problems. In addition, REITs are
subject to certain other risks related specifically to their structure and focus such as: dependency upon
management skills; limited diversification; the risks of locating and managing financing for projects;
heavy cash flow dependency; possible default by borrowers; the costs and potential losses of self-
liquidation of one or more holdings; the possibility of failing to maintain exemptions from securities
registration; and, in many cases, relatively small market capitalization, which may result in less market
liquidity and greater price volatility. In addition, non-traded REITs do not trade on the secondary
market. Accordingly, non-traded REITs are subject to liquidity constraints.
Cash Positions. We continue to treat cash as an asset class. As such, unless we determine to the
contrary, all cash positions (money markets, etc.) shall continue to be included as part of assets under
management for purposes of calculating our 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), we 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, our 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 we 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 we reasonably
anticipate that we 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.
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The above does not apply to the cash component maintained within an 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 unmanaged accounts.
Cryptocurrency. For clients who want exposure to cryptocurrencies, including Bitcoin, we, may advise
the client to consider a potential investment in corresponding exchange traded securities, or an
allocation to separate account managers and/or private funds that provide cryptocurrency exposure.
Crypto is a digital currency that can be used to buy goods and services but uses an online ledger with
strong cryptography (i.e., a method of protecting information and communications through the use of
codes) to secure online transactions. Unlike conventional currencies issued by a monetary authority,
cryptocurrencies are generally not controlled or regulated and their price is determined by the supply
and demand of their market. Because cryptocurrency is currently considered to be a speculative
investment, we will not exercise discretionary authority to purchase a cryptocurrency investment for
client accounts. Rather, a client must expressly authorize the purchase of the cryptocurrency
investment.
We do not recommend or advocate the purchase of, or investment in, cryptocurrencies. We consider
such an investment to be speculative.
Clients who authorize the purchase of a cryptocurrency investment must be prepared for the potential
for liquidity constraints, extreme price volatility and complete loss of principal.
Portfolio Activity. We have a fiduciary duty to provide services consistent with our client’s best
interest. As part of its investment advisory services, we 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, 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 we determine 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.
Third-Party Reporting Services. In conjunction with the services provided by third-party account
aggregation service providers, we may also provide periodic comprehensive reporting services, which
can incorporate all of your investment assets including those investment assets that are not part of the
assets managed by us (the “Excluded Assets”). Our services relative to the Excluded Assets are
limited to reporting services only, which does not include investment implementation. Because we do
not have trading authority for the Excluded Assets, to the extent applicable to the nature of the
Excluded Assets (assets over which you maintain trading authority vs. trading authority designated to
another investment professional), you (and/or the other investment professional) shall be exclusively
responsible for directly implementing any recommendations relative to the Excluded Assets. Rather,
you and/or your other advisors that maintain trading authority, and not us, shall be exclusively
responsible for the investment performance of the Excluded Assets. Without limiting the above, we
shall not be responsible for any implementation error (timing, trading, etc.) relative to the Excluded
Assets. In the event you desire that we provide investment management services (whereby we would
have trading authority) with respect to the Excluded Assets, you may engage us to do so pursuant to
the terms and conditions of an Investment Advisory Agreement.
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Client Obligations. In performing our services, we shall not be required to verify any information
received from you or from your other professionals, and are expressly authorized to rely thereon.
Moreover, you are advised that it remains your responsibility to promptly notify us if there is ever any
change in your financial situation or investment objectives for the purpose of reviewing, evaluating or
revising our previous recommendations and/or services.
Cybersecurity Risk. The information technology systems and networks that we and our third-party
service providers use to provide services to our clients employ various controls, which are designed to
prevent cybersecurity incidents stemming from intentional or unintentional actions that could cause
significant interruptions in our operations and result in the unauthorized acquisition or use of clients’
confidential or non-public personal information. Clients and the firm 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 we
have established procedures to reduce the risk of cybersecurity incidents, there is no guarantee that
these efforts will always be successful, especially considering that we do 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 our written Brochure and Client Relationship Summary, as set forth
on Part 2 of Form ADV and Form CRS respectively, shall be provided to you prior to, or
contemporaneously with, the execution of the Investment Advisory Agreement or Financial Planning
and Consulting Agreement.