Firm Description
Lefavi Wealth Management, Inc., (“the Adviser” and “LWM”) was founded in 1980 and is
an SEC registered investment adviser. The Adviser provides investment management and
financial planning services to clients in exchange for a single fee based on a percentage of
assets under management. Most clients are retail investors or high net worth individuals,
but may also include businesses, charitable entities, and retirement/pension accounts.
The Adviser does not act as a custodian of client assets and the client maintains asset
control. Assets are held in custody at either a clearing firm, a mutual fund company or its
transfer agent, at the issuer (for non-certificated, privately placed securities) or some
other duly authorized custodian. The Adviser places trades for clients under discretionary
authority granted by the client in the Advisory contract.
The Adviser acts as a sponsor of a wrap program for clients. Details of the wrap program
can be found in Appendix 1.
As of December 31, 2023, the Adviser manages approximately $383,048,116 in assets for
approximately 500 clients. As of the effective date of this Brochure, all assets are
managed on a discretionary basis, and none are managed on a non-discretionary basis.
Other professionals (e.g., lawyers, accountants, insurance agents, etc.) are engaged
directly by the client on an as-needed basis. Any conflicts of interest arising out of the
Adviser’s or its associated persons are disclosed in this brochure at Item 14.
Principal Owners
Stuart Enterline owns 100% of the Adviser.
Types of Advisory Services
The Adviser provides investment supervisory services, manages investment advisory
accounts not involving investment supervisory services and furnishes investment advice
to clients. The Adviser also furnishes advice to clients on matters not involving securities,
such as financial planning matters generally, retirement planning, educational planning,
charitable giving, long-term care insurance, taxation issues, and trust services that often
include estate planning as arranged through 3rd party Certified Public Accountants or
attorneys.
Retirement Plan Rollover Recommendations
Regardless of the type of service we are providing, when we provide investment advice about
your retirement plan account or individual retirement account (“IRA”) including whether to
maintain investments and/or proceeds in the retirement plan account roll over such
investments from the retirement plan account to an IRA or make a distribution from the
retirement plan account, we acknowledge that the firm is a “fiduciary” within the meaning of
Title I of the Employee Retirement Income Security Act (“ERISA”) and/or the Internal Revenue
Code as applicable. The way that the firm makes money creates conflicts with your interests so
the firm operates under a special rule that requires that firm to act in your best interest and not
put our interests ahead of yours.
Under this special rule’s provisions, the firm must act as a fiduciary to a retirement plan account
or IRA under ERISA/the Internal Revenue Code by:
• Meeting a professional standard of care when making investment recommendations
(i.e., give prudent advice);
• Never putting the interests of the firm ahead of you when making recommendations
(i.e., give loyal advice);
• Avoiding misleading statements about conflicts of interest, fees, and investments;
• Following policies and procedures designed to ensure that the firm gives advice that is in
your best interest;
• Charging no more than is reasonable for the services of the firm; and
• Giving you basic information about any conflicts of interest.
To the extent that we recommend that you roll over your account to an account managed by
the firm, please know that the firm and its investment advisor representatives have an inherent
conflict of interest. Increased investment advisory fees may be earned by recommending that
you roll over your account to an account managed by the firm. We will earn fewer investment
advisory fees if you do not roll over the funds to an account managed by the firm. Thus, our
investment advisor representatives have an economic incentive to recommend a rollover of
funds to an account managed by the firm which is a conflict of interest because our
recommendation that you open the account to be managed by the firm can be based on our
economic incentive and not based exclusively on whether or not moving the funds is in your
overall best interest.
We have taken steps to manage this conflict of interest. We have adopted an impartial conduct
standard whereby our investment adviser representatives will (i) provide investment advice to a
retirement plan participant regarding a rollover of funds from the retirement plan in accordance
with the fiduciary status described below, (ii) not recommend investments which result in the
firm receiving unreasonable compensation related to the rollover of funds, and (iii) fully disclose
compensation received by the firm and our supervised persons and any material conflicts of
interest related to recommending the rollover of funds and refrain from making any materially
misleading statements regarding such rollover.
When providing advice to your regarding a rollover, our investment adviser representatives will
act with the care, skill, prudence, and diligence under the circumstances then prevailing that a
prudent person acting in a like capacity and familiar with such matters would use in the conduct
of an enterprise of a like character and with like aims, based on the investment objectives, risk,
tolerance, financial circumstances, and a client’s needs, without regard to the financial or other
interests of the firm or our affiliated personnel.
We are affiliated with Bruce A. Lefavi Securities, Inc., a registered broker-dealer, through
common control and ownership. Persons providing investment advice on behalf of our firm are
also registered representatives with the broker-dealer. In their capacity as registered
representatives, these persons will receive commission-based compensation in connection with
the purchase and sale of securities, including 12b-1 fees for the sale of investment company
products. Compensation earned by these persons in
their capacities as registered
representatives is separate from our advisory fees. This practice presents a conflict of interest
because persons providing investment advice on behalf of our firm who are registered
representatives have an incentive to effect securities transactions for the purpose of generating
commissions rather than solely based on your needs.
In addition to these commissions/fees, opening an investment account carries with it costs
beyond the advisory fee(s) the firm charges. When placing a transaction order to buy or sell
securities, advisory clients may have to pay any or all of the following charges in addition to the
advisory fees charged by this firm:
• Brokerage commissions
• Custodian fees
• Postage charges
• Processing charges
• Ticket charges
• Early surrender fees
• Transfer fees
• Administrative fees for
investments in mutual funds;
• Account maintenance fees charged by a broker dealer
for an account, especially if inactive;
• Third party administrator (“TPA”) and record keeping
fees
Asset Management
The vast majority of client investments are investment company securities (mutual funds
and exchange traded funds), but may include equities (stocks), warrants, corporate debt
securities, Non-traded REITs and Business Development Companies (BDCs), variable and
fixed insurance products, U.S. Government securities, interests in limited partnerships,
and private placements. Non-traded and other alternative investments may be utilized in
portfolios, where appropriate, to provide clients with assets that are non-correlated to
the stock market. Assets are invested primarily in advisory share class mutual funds and
exchange-traded funds through our unaffiliated custodian, to a lesser extent through our
affiliated broker dealer, or, occasionally, directly through the fund companies.
Initial public offerings (IPOs) are not available through the Adviser.
Insurance Services
The Adviser offers insurance products through insurance companies with which our
affiliated broker-dealer has established a relationship as an agent. Insurance products
include both fixed and variable annuities, life insurance, and long-term care insurance.
These products are purchased net of commission. This means that our affiliated broker-
dealer does not earn income from the purchase. If a previously purchased product earned
our affiliated broker-dealer a trailing commission, the assets that generate that
commission are not charged an asset management fee. The Adviser does not make any
representation that these products are available at the lowest cost and similar products
are available from other providers. The client is under no obligation to purchase
insurance products from the Adviser or our affiliated broker-dealer.
Types of Agreements
The following agreements define the typical client relationships.
Investment Management Agreement
As part of the investment management service, (i) the material aspects
of the client’s financial affairs are reviewed, (ii) realistic goals are set and
(iii) objectives to reach those goals are determined. Following modern
portfolio theory, the Adviser creates asset allocation models for its
clients. An Advisory representative will recommend changes as the
Adviser deems appropriate.
The Adviser periodically reviews a client’s financial situation and portfolio
through regular contact with the client, which includes an annual
meeting. Adviser periodically updates the asset-allocation models and
reviews the allocations in client portfolio. The Adviser will review and
rebalance the portfolio as necessary. The Adviser agreement sets forth
both service and fees. The agreement may be terminated by either party
at any time. If the adviser terminates an agreement, the client will be
given thirty days written notice.
Financial Planning Agreement
A financial plan may include, but is not limited to 1) a net worth
statement; 2) a cash flow statement; 3) a review of investment accounts,
including asset allocation and rebalancing recommendations; 4) strategic
tax planning; 5) a review of retirement accounts and plans, including
recommendations; 6) a review of insurance policies and
recommendations for changes, if necessary; 7) retirement scenarios; 8)
estate planning review and recommendations; and/or 9) education
planning with funding recommendations, or 10) charitable giving.
Financial planning services do not require the client use or purchase
Investment Advisory services offered by the Adviser or any particular
products.
There is an inherent conflict of interest for the Adviser whenever a
financial plan recommends use of professional investment management
services. The Adviser does not make any representation that the products
and services offered by LWM are offered at the lowest available cost. The
client may be able to obtain the same products or services at a lower cost
from other providers. The client is under no obligation to accept any of
the recommendations of the Adviser or use any service of the Adviser in
particular.
Tailored Relationships
The goals and objectives for each client are documented as part of the client’s file. Clients
may impose restrictions on investing in certain securities or types of securities that are
detailed in the client’s Investment Management Agreement.
Assignment of Investment Management Agreements
Agreements may not be assigned without client consent.
Termination of Agreements
A client may terminate any of the aforementioned agreements at any time by notifying
the Adviser or an Adviser Representative. Clients are charged pro rata for services
provided through the date of the termination notice and any applicable administrative
fees. If the client made an advance payment, the Adviser will refund any unearned portion
of the advance payment.
The Adviser reserves the right to terminate any engagement where a client has willfully
concealed or has refused to provide pertinent information about financial situations
when necessary and appropriate, in the Adviser’s judgment, to provide proper financial
advice. The Adviser will provide thirty days written notice in the event that an
engagement is terminated.