Firm Description
Keystone Wealth Advisors, Inc. (“KWA”) was founded in 2010. The owners of KWA are
Steven Douglas Carlson and Berthel Andrew Olsen, III.
KWA provides personalized confidential financial planning and investment management
to individuals, pension and profit sharing plans, trusts, estates, charitable organizations
and small businesses. Advice is provided through consultation with the client and may
include: determination of financial objectives, identification of financial problems, cash
flow management, tax planning, insurance review, investment management, education
funding, retirement planning, and estate planning.
KWA is a fee based financial planning and investment management firm. KWA does not
sell annuities, insurance, stocks, bonds, mutual funds, limited partnerships, or other
products for commissions.
KWA does not act as a custodian of client assets. The client always maintains asset
control.
An evaluation of each client's initial situation is provided to the client, often in the form
of an Investment Policy Statement. Periodic reviews are also communicated to provide
reminders of the specific courses of action that need to be taken. More frequent reviews
occur but are not necessarily communicated to the client unless immediate changes are
recommended.
Other professionals (e.g., lawyers, accountants, insurance agents, etc.) are engaged
directly by the client on an as-needed basis. Conflicts of interest will be disclosed to the
client in the event they should occur.
Types of Advisory Services
KWA provides investment supervisory services, also known as asset management
services and furnishes investment advice through consultations.
ASSET MANAGEMENT
KWA offers discretionary and non-discretionary ongoing portfolio management services
based on the individual goals, objectives, time horizon, and risk tolerance of each client.
KWA creates an Investment Policy Statement for each client. KWA creates an
Investment Policy Statement for each client, which outlines the client's current situation
(income, tax levels, and risk tolerance levels) and then constructs a general plan (the
Investment Policy Statement) to aid in the selection of a portfolio that matches each
client's specific situation. Investment Supervisory Services include, but are not limited
to, the following:
● Investment strategy ● Personal investment policy
● Asset allocation ● Asset selection
● Risk Tolerance ● Regular portfolio monitoring
KWA evaluates the current investment of each client with respect to their risk tolerance
levels and time horizon. Risk tolerance levels are documented in the Investment Policy
Statement, which is given to each client.
Discretionary
When the Client provides KWA discretionary authority the Client will sign a limited
trading authorization or equivalent. KWA will have the authority to execute transactions
in the account without seeking Client approval on each transaction.
Non-Discretionary
When the Client elects to use KWA on a non-discretionary basis, KWA will determine the
securities to be bought or sold and the amount of the securities to be bought or sold.
However, KWA will obtain prior Client approval on each and every transaction before
executing any transaction.
When deemed appropriate for the Client, KWA may hire Sub-Advisors to manage all or a
portion of the assets in the Client account. KWA may have full discretion to hire and fire
Sub-Advisors as we deem suitable. Sub-Advisors will maintain the models or investment
strategies agreed upon between Sub-Advisor and KWA. Sub-Advisors execute trades on
behalf of KWA in Client accounts. KWA will be responsible for the overall direct
relationship with the Client. KWA retains the authority to terminate the Sub-Advisor
relationship at KWA’s discretion.
ERISA PLAN SERVICES
KWA provides service to qualified and non-qualified retirement plans including 401(k)
plans, 403(b) plans, pension and profit sharing plans, cash balance plans, and deferred
compensation plans. KWA may act as a 3(21):
Limited Scope ERISA 3(21) Fiduciary. KWA typically acts as a limited scope ERISA
3(21) fiduciary that can advise, help and assist plan sponsors with their investment
decisions on a non-discretionary basis. As an investment advisor KWA has a fiduciary
duty to act in the best interest of the client. The plan sponsor is still ultimately
responsible for the decisions made in their plan, though using KWA can help the plan
sponsor delegate liability by following a diligent process.
1. Fiduciary Services are:
➢ Provide non-discretionary investment advice to the Client about asset classes and
investment alternatives available for the Plan in accordance with the Plan’s
investment policies and objectives. Client will make the final decision regarding the
initial selection, retention, removal and addition of investment options.
➢ Assist the Client in the development of an investment policy statement (“IPS”). The
IPS establishes the investment policies and objectives for the Plan. Client shall have
the ultimate responsibility and authority to establish such policies and objectives
and to adopt and amend the IPS.
➢ Provide non-discretionary investment advice to the Plan Sponsor with respect to
the selection of a qualified default investment alternative for participants who are
automatically enrolled in the Plan or who have otherwise failed to make investment
elections. The Client retains the sole responsibility to provide all notices to the Plan
participants required under ERISA Section 404(c) (5) and 404(a)-5.
➢ Assist in monitoring investment options by preparing periodic investment
reports that document investment performance, consistency of fund
management and conformance to the guidelines set forth in the IPS and make
recommendations to maintain, remove or replace investment options.
➢ Meet with Client on a periodic basis to discuss the reports and the investment
recommendations.
2. Non-fiduciary Services are:
➢ Assist in the education of Plan participants about general investment information
and the investment alternatives available to them under the Plan. Client
understands the Advisor’s assistance in education of the Plan participants shall be
consistent with and within the scope of the Department of Labor’s definition of
investment education (Department of Labor Interpretive Bulletin 96-1). As such, the
Advisor is not providing fiduciary advice as defined by ERISA 3(21)(A)(ii) to the
Plan participants. Advisor will not provide investment advice concerning the
prudence of any investment option or combination of investment options for a
particular participant or beneficiary under the Plan.
➢ Assist in the group enrollment meetings designed to increase retirement plan
participation among the employees and investment and financial understanding by
the employees.
Advisor may provide these services or, alternatively, may arrange for the Plan’s other
providers to offer these services, as agreed upon between Advisor and Client.
3. The Advisor has no responsibility to provide services related to the following types
of assets (“Excluded Assets”):
a. Employer securities;
b. Real estate (except for real estate funds or publicly traded REITs);
c. Stock brokerage accounts or mutual fund windows;
d. Participant loans;
e. Non-publicly traded partnership interests;
f. Other non-publicly traded securities or property (other than collective trusts
and similar vehicles); or
g. Other hard-to-value or illiquid securities or property.
Excluded Assets will not be included in calculation of Fees paid to the Advisor under this
Agreement.
Specific services will be outlined in detail to each plan in the 408(b)2 disclosure.
KWA will not have discretion or custody at any time of client funds and/or securities.
FINANCIAL PLANNING AND CONSULTING
If financial planning services are applicable, the client may compensate KWA on a
negotiable hourly fee basis described in detail under “Fees and Compensation” section of
this brochure. Financial plans and financial planning may include, but are not limited to
investment planning, life insurance; tax concerns; retirement planning; college planning;
and debt/credit planning. These services will be based on hourly fees and the final fee
structure will be documented in Exhibit II of the Financial Planning Agreement. If a
conflict of interest exists between the interests of the investment advisor and the
interests of the client, the client is under no obligation to act upon the investment
advisor’s recommendation. If the client elects to act on any of the recommendations, the
client is under no obligation to effect the transaction through KWA. Financial plans will
be completed and delivered inside of 6 months. Clients may terminate advisory services
with 30 days written notice.
Client Tailored Services and Client Imposed Restrictions
The goals and objectives for each client are documented in our client files. Investment
strategies are created that reflect the stated goals and objectives. Clients may impose
restrictions on investing in certain securities or types of securities.
Agreements may not be assigned without written client consent.
Wrap Fee Programs
KWA does not participate in wrap fee programs.
Client Assets Under Management
As of April 30, 2023, KWA manages approximately $136,214,554 in assets under
management on a non-discretionary basis and $20,670,691 on a discretionary basis.