Description of Advisory Firm
Davidson Wealth Management, LLC’s registration was granted by the U.S. Securities and Exchange
Commission on March 22, 2010. Richard Edward Prozzo (CRD Number 1972687) is Managing Member and
Chief Compliance Officer of Davidson and owns eighty (80%) percent of the equity of the firm and Kristopher
Sevcenko owns twenty (20%) percent of the equity of the firm. Davidson is not publicly owned or traded.
There are no indirect owners of the firm or intermediaries, which have any ownership interest in the firm. As
of December 31, 2022, Davidson managed, on a discretionary basis, $49,443,202 and managed on a
nondiscretionary basis $69,084,527.
Types of Advisory Services
Asset Management
We provide money management to individuals and corporate clients providing professional management
of client’s funds. We diversify and manage the client’s portfolios which includes but is not limited to
stocks, bonds, options, limited partnerships, mutual funds and money market instruments. Investments
are determined based upon the client’s investment objectives, risk tolerance, net worth, net income and
other various suitability factors. Client’s accounts are managed on an individualized basis. Further
restrictions and guidelines imposed by clients affect the composition and performance of portfolios. For
these reasons, performance of portfolios within the same investment objective may differ and clients
should not expect that the performance of their portfolios will be identical with the average client of
Davidson.
Principals of Davidson are Registered Representatives associated with Osaic Wealth, Inc. (formerly Royal
Alliance Associates, Inc.), “Osaic Wealth”. It is suggested for convenience and proper management of the
Asset Management account, that the client establishes a brokerage account at Osaic Wealth.
Vision2020 Wealth Management Platform – Advisor Managed Portfolios Program
The Wealth Management Platform – Advisor Managed Portfolios Program (“Advisor Managed
Portfolios”) provides comprehensive investment management of clients through the application of
asset allocation planning software as well as the provision of execution, clearing and custodial
services through Pershing, LLC (“Pershing”).
Advisor Managed Portfolios provides risk tolerance assessment, efficient frontier plotting, fund
profiling and performance data, and portfolio optimization and re-balancing tools. Utilizing these
tools, and based on your responses to a risk tolerance questionnaire (“Questionnaire”) and
discussions that we have together regarding, among other things, investment objective, risk
tolerance, investment time horizon, account restrictions, and overall financial situation, we
construct a portfolio of investments.
Portfolios may consist of mutual funds, exchange traded funds, equities, debt securities, variable
annuity sub-accounts and other investments. Each portfolio is designed to meet your individual
needs, stated goals and objectives. Additionally, you have the opportunity to place reasonable
restrictions on the types of investments to be held in the portfolio. For further Advisor Managed
Portfolios details, please see the Advisor Managed Portfolios Wrap Fee Program Brochure. We
provide this brochure to clients prior to or concurrent with their enrollment in Advisor Managed
Portfolios.
RASA 044 Accounts
We offer RASA 044 Accounts (“RASA”) as a non-commissionable advisory account where we can
purchase load waived and no-load mutual funds, exchange traded funds, and other equity, debt
and option securities for clients. We will obtain the relevant financial data from clients and assist
them in the selection of suitable investments. We will base our investment strategy on their
specific goals and situation. In addition, they have the opportunity to place reasonable restrictions
on investments held within their RASA account.
Schwab Institutional
We offer the Schwab Institutional program as a non-commissionable advisory account where we
can purchase load waived and no-load mutual funds, exchange traded funds, and other equity,
debt and option securities for clients. We will obtain the relevant financial data from clients and
assist them in the selection of suitable investments. We will base our investment strategy on their
specific goals and situation. In addition, they have the opportunity to place reasonable restrictions
on investments held within their Schwab account.
SEI Asset Management Program
The SEI Asset Management Program is a program whereby Davidson can make the SEI family of
mutual funds available to its clients. SEI is not an investment adviser in this instance and does not
have the investment adviser relationship with the client. The adviser will assist the client in
selecting a relevant asset allocation model. The client chooses one of several mutual fund asset
allocation models. If the client so chooses, automatic re-balancing to the model allocation and
recommended model allocation changes will not be available.
Third-Party Advisory Services
We offer our clients the services of various third-party investment advisors (“Third-Party Advisory
Services”) for the provision of certain investment advisory programs including mutual fund wrap and
separately managed account programs.
If you are interested in learning more about any of these services, please note that a complete description
of the programs, services, fees and payment structure, and termination features is available via the
applicable Third-Party Advisory Service’s disclosure brochures, investment advisory contracts, and account
opening documents.
In connection with these arrangements, we will provide assistance in the selection and ongoing
monitoring of a particular Third-Party Advisory Service. Factors that we consider in the selection of a
particular third-party advisor may include but may not be limited to: i) our assessment of a particular
Third-Party Advisory Service; ii) the client’s risk tolerance, goals, objectives and restrictions, as well as
investment experience; and, iii) the assets available for investment.
Clients should know that the services provided by Davidson through the use of Third-Party Advisory
Services are under certain conditions directly offered by them to clients. The fees charged by Third-Party
Advisory Services who offer their programs directly to clients may be more or less than the combined fees
charged by the Third-Party Advisory Service and Davidson for its participation in the investment
programs. However, when using the services of Third-Party Advisory Services directly, clients do not
receive our expertise in developing an investment strategy, selecting a Third-Party Advisory Service,
monitoring the performance of clients account and changing a Third-Party Advisory Service provider
when appropriate.
Davidson receives compensation pursuant to its agreements with these Third-Party Advisory Programs for
introducing clients to these Third-Party Advisory Programs and for certain ongoing services provided to
clients. This compensation, which is disclosed to the client in a separate disclosure document provided by
the Third-Party Advisory Program, is typically equal to a percentage of the investment advisory fee
charged by that Third-Party Advisory Program or a fixed fee. Due to the fact that Davidson receives
compensation from the Third-Party Advisory Services for referring clients and because such compensation
may differ depending upon the individual agreement with each Third-Party Advisory Service, Davidson
may have an incentive to recommend one of these Third-Party Advisory Services over others with which it
has less favorable compensation arrangements or other advisory programs offered by Third-Party
Advisory Services with which it has no compensation arrangements.
VISION2020 Wealth Management Platform – Model Portfolios Program
The Wealth Management Platform - Model Portfolios Program (“Model Program”) offers clients
managed asset allocation models (“Asset Allocation Models”) of mutual funds, exchange traded
funds (“ETFs”) or a combination diversified across various investment styles and strategies. The
Asset Allocation Models are constructed by managers (“Program Managers”) such as Russell
Investment Management Company, SEI Investments Management Corporation and Morningstar
Associates, LLC.
Based upon the risk tolerance of each client, the Model Program utilizes a system that selects a
specific Asset Allocation Model. After the Asset Allocation Model is chosen, we, with the
assistance of the Model Program sponsor, will open a Model Program account. Client accounts will
be invested in the specific investments contained within the recommended Asset Allocation
Model. Clients have the opportunity to place reasonable restrictions on investments held within
the Model Program account. For further Model Program details, including a full list of Program
Managers, please see the Model Program Wrap Fee Program Brochure. We provide this
brochure to clients prior to or concurrent with their enrollment in the Model Program.
VISION2020 Wealth Management Platform – SMA and UMA Program
The Wealth Management Platform – SMA and UMA Account Program (“Wealth Managed Account
Program” or “WMAP”) provides clients with the opportunity to invest their assets across multiple
investment strategies and asset classes by implementing an asset allocation strategy. WMAP is a
Wrap Account program that offers these advisory services along with brokerage and custodial
services for a single, asset-based, advisory fee.
We will present clients with a WMAP asset allocation model (“WMAP Model”) for their approval
which will consist of: 1) third party money managers (“WMAP Managers”) who will manage your
WMAP account according to a particular equity or fixed income model or strategy, or 2) no-load
mutual funds (“Funds”), or 3) exchange traded funds (“ETFs”) or any combination thereof
(individually or collectively, “WMAP Investments”). WMAP Investments will be managed
according to the selected WMAP Model. WMAP Investments are held within a separately
managed account or a series of separately managed accounts (collectively, “SMA Account”) or in
one, unified managed account (“UMA Account”).
We will suggest a WMAP Model based on a client’s response to a risk tolerance questionnaire
(“Questionnaire”) and discussion that we have together regarding among other things, investment
objective, risk tolerance, investment time horizon, account restrictions, and overall financial
situation. In addition, clients have the opportunity to place reasonable restrictions on investments
held within your WMAP account. For further WMAP details please see the WMAP Wrap Fee
Program Brochure. We provide this brochure to clients prior to or concurrent with their
enrollment in WMAP.
SEI GoalLink – Integrated Managed Account Program
We offer the GoalLink program to high net worth individuals, trusts, endowments, foundations
and institutions. Through the GoalLink program, we serve as the primary client contact,
responsible for analyzing their current financial situation, return expectations, risk tolerance, time
horizon, and asset class preference. Using the GoalLink presentation tool, Davidson and the client
select an investment strategy which is then submitted and reviewed by a representative of SEI
Investment Management Corporation ("SIMC"). The strategy may include a combination of
individual securities and mutual funds advised by SIMC ("SEI Funds") based upon the client's
selected strategy and account size.
To participate in the program, Davidson, SIMC, and the client execute a tri-party agreement.
Pursuant to the agreement, the client appoints Davidson as its investment adviser to assist the
client in selecting the strategy. Based upon the selected strategy, SIMC will have investment
authority of the assets and will make prescribed adjustments to the strategy weights based on the
market environment at a point in time. However, the client may, at any time, impose reasonable
restrictions on the management of the client's account or choose a new strategy. SIMC's
investment authority is effective until changed or revoked in writing. SIMC may delegate its day-
to-day responsibility for selecting particular securities to one or more sub-advisors.
SEI Asset Allocation Program
Davidson participates in the SEI asset allocation program, which is offered to high net worth
individuals, defined benefit plans, participant and non-participant directed defined contribution
plans, institutions, endowments, and foundations.
With the SEI asset allocation program, Davidson serves as the investment advisor to the client, and
is responsible for analyzing the client's current financial situation, return expectations, risk
tolerance, time horizon, and asset class preference, pursuant to Davidson's investment advisory
agreement. Based upon the client's information, Davidson and the client select an investment
strategy and choose from one of many mutual fund allocation models, which may be provided by
SIMC, or purchase the individual mutual funds.
Davidson will allocate the assets placed in the client's account among the SEI Funds (a family of
mutual funds advised by SIMC) in accordance with the investment strategy or model selected by
the client. The client, through an advisor, may make adjustments to their asset allocation to help
ensure that the mix reflects the objectives of the chosen strategy. The client may, at any time,
impose reasonable restrictions on the management of his/her account or choose a new
investment strategy. For participant directed plans, assets will be invested in the SEI asset
allocation mutual funds and other style specific SEI funds (if applicable).
In accordance with the client's investment objectives, Davidson may also allocate assets placed in
the client's account among the SEI funds through SEI's private client models, which reflect SIMC's
institutional asset allocation models most aligned with individual client's goals. SIMC expects to
make changes to the private client model periodically to incorporate changes to the mutual fund
asset allocation underlying the models. Upon consent from Davidson (utilizing limited discretion),
these asset allocation changes will be made to the client account invested in the private client
models.
Retirement Plan Consulting Services
We offer retirement consulting services to employee benefit plans and their fiduciaries. The services are
designed to assist the plan sponsor in meeting its management and fiduciary obligations to the plan under
ERISA. Retirement consulting services will consist of general or specific advice, and may include any one
or all of the following:
1. Platform Provider Search and Plan Set-up
2. Strategic Planning and Investment Policy Development/Review.
3. Plan Review.
4. Plan Fee and Cost Review.
5. Acting as Third-Party Service Provider Liaison.
6. Assessment of Plan Investments and Investment Options.
7. Plan Participant Education and Communication.
8. Investment Advice to Participants.
9. Plan Benchmarking
10. Plan Conversion to New Vendor Platform
11. Assistance in Plan Merger
12. Legislative and Regulatory Updates; Plan Corrections
The Plan Sponsor may also engage us to provide a review of executive benefits, for separate
compensation.
We will determine with the Plan Sponsor in advance the scope of services to be performed and the fees
for all requested services. Prior to engaging us to provide pension consulting services, the Plan Sponsor
will be required to enter into a written agreement with us setting forth the terms and conditions of the
engagement, describing the scope of the services to be provided, and the relevant fees and fee paying
arrangements. The services outlined above that we provide are explained in more detail in the written
agreement. We will also provide additional disclosures about our services and fees, where required by
ERISA.
When we perform our agreed upon services, we will not be required to verify the accuracy or consistency
of any information received from the Plan Sponsor.
We will serve in a nondiscretionary ERISA fiduciary capacity with respect to some but not all of the
services that we provide which will be further explained in the written agreement we sign with the Plan
Sponsor. The Plan Sponsor is always free to seek independent advice about the appropriateness of any
recommendations made by us.
Financial Planning
We provide financial planning services. Financial planning is a comprehensive evaluation of a client’s
current and future financial state by using currently known variables to predict future cash flows, asset
values and withdrawal plans. The key defining aspect of financial planning is that through the financial
planning process, all questions, information and analysis will be considered as they impact and are
impacted by the entire financial and life situation of the client.
In general, the financial plan will address any or all of the following areas of concern. The client and
advisor will work together to select the specific areas to cover. These areas may include, but are not
limited to, the following:
• Business Planning: We provide consulting services for clients who currently operate their own
business, are considering starting a business, or are planning for an exit from their current
business. Under this type of engagement, we work with you to assess your current situation,
identify your objectives, and develop a plan aimed at achieving your goals.
• Cash Flow and Debt Management: We will conduct a review of your income and expenses to
determine your current surplus or deficit along with advice on prioritizing how any surplus should
be used or how to reduce expenses if they exceed your income. Advice may also be provided on
which debts to pay off first based on factors such as the interest rate of the debt and any income
tax ramifications. We may also recommend what we believe to be an appropriate cash reserve
that should be considered for emergencies and other financial goals, along with a review of
accounts (such as money market funds) for such reserves, plus strategies to save desired amounts.
• College Savings: Includes projecting the amount that will be needed to achieve college or other
post-secondary education funding goals, along with advice on ways for you to save the desired
amount. Recommendations as to savings strategies are included, and, if needed, we will review
your financial picture as it relates to eligibility for financial aid or the best way to contribute for
grandchildren (if appropriate).
• Employee Benefits Optimization: We will provide review and analysis as to whether you, as an
employee, are taking the maximum advantage possible of your employee benefits. If you are a
business owner, we will consider and/or recommend various benefit programs that can be
structured to meet both business and personal retirement goals.
• Estate Planning: This usually includes an analysis of your exposure to estate taxes and your
current estate plan, which may include whether you have a will, powers of attorney, trusts and
other related documents. Our advice also typically includes ways for you to minimize or avoid
future estate taxes by implementing appropriate estate planning strategies such as the use of
applicable trusts.
We always recommend that you consult with a qualified attorney when you initiate, update, or
complete estate planning activities. We may provide you with contact information for attorneys
who specialize in estate planning when you wish to hire an attorney for such purposes. From time-
to-time, we will participate in meetings or phone calls between you and your attorney with your
approval or request.
• Financial Goals: We will help clients identify financial goals and develop a plan to reach them. We
will identify what you plan to accomplish, what resources you will need to make it happen, how
much time you will need to reach the goal, and how much you should budget for your goal.
• Insurance: Review of existing policies to ensure proper coverage for life, health, disability, long-
term care, liability, home and automobile.
• Investment Analysis: This may involve developing an asset allocation strategy to meet clients’
financial goals and risk tolerance, providing information on investment vehicles and strategies,
reviewing employee stock options, as well as assisting you in establishing your own investment
account at a selected broker/dealer or custodian. The strategies and types of investments we may
recommend are further discussed in Item 8 of this brochure.
• Retirement Planning: Our retirement planning services typically include projections of your
likelihood of achieving your financial goals, typically focusing on financial independence as the
primary objective. For situations where projections show less than the desired results, we may
make recommendations, including those that may impact the original projections by adjusting
certain variables (i.e., working longer, saving more, spending less, taking more risk with
investments).
If you are near retirement or already retired, advice may be given on appropriate distribution
strategies to minimize the likelihood of running out of money or having to adversely alter
spending during your retirement years.
• Risk Management: A risk management review includes an analysis of your exposure to major risks
that could have a significant adverse impact on your financial picture, such as premature death,
disability, property and casualty losses, or the need for long-term care planning. Advice may be
provided on ways to minimize such risks and about weighing the costs of purchasing insurance
versus the benefits of doing so and, likewise, the potential cost of not purchasing insurance
(“self-insuring”).
• Tax Planning Strategies: Advice may include ways to minimize current and future income taxes as
a part of your overall financial planning picture. For example, we may make recommendations on
which type of account(s) or specific investments should be owned based in part on their “tax
efficiency,” with consideration that there is always a possibility of future changes to federal, state
or local tax laws and rates that may impact your situation.
We recommend that you consult with a qualified tax professional before initiating any tax
planning strategy, and we may provide you with contact information for accountants or attorneys
who specialize in this area if you wish to hire someone for such purposes. We will participate in
meetings or phone calls between you and your tax professional with your approval.
Wrap Fee Programs
We do not participate in wrap fee programs.