A.
INVESTMENT ADVISORY SERVICES
The Registrant generally provides discretionary investment advisory services
through its wrap fee program. See the discussion below under Adkins Seale Wrap
Program. Clients in the Program will pay a single fee for bundled services (i.e.,
investment advisory, brokerage, custody).
ADKINS SEALE WRAP PROGRAM
The Registrant provides investment management services on a wrap fee basis
through the Registrant’s investment management wrap fee program (the
“Program”). Under the Program, the Registrant provides discretionary investment
management services, for a single specified annual Program fee, inclusive of trade
execution, custody, reporting, and investment management fees. All prospective
Program participants should read both the Registrant’s Brochure and this Program
Brochure, and ask any corresponding questions that they may have, prior to
participation in the Program. Charles Schwab & Co. Inc. (“Schwab”) serves as the
custodian for Program accounts.
The Registrant’s annual investment Program fee is based on a percentage of the
market value of a client’s assets placed under the Registrant’s management as
follows:
Market Value of Portfolio Annual fee as % of
First $250,000 1.20%
Next $250,000 1.00%
Next $500,000 0.85%
Next $1,000,000 0.70%
Next $3,000,000 0.50%
Above $5,000,000 Negotiable
By way of example, a client placing $350,000 under Registrant’s management
under the above fee schedule would be assessed an annual fee of 1.20% on the first
$250,000 placed under Registrant’s management, with an annual fee of 1.00%
assessed on the remaining $100,000.
Under the Program, the Registrant will have the written authority to determine
which securities and the amounts of securities that are bought or sold. Any
limitations on this discretionary authority shall be included in the written agreement
between each client and the Registrant. Clients may change these limitations by
notifying the Registrant, in writing, at any time. The client shall have reasonable
access to one of the Registrant’s investment professionals to discuss their account.
Fee Calculation: The fee charged is calculated as described above and is not
charged based on a share of capital gains upon or capital appreciation of the funds
or any portion of the funds of an advisory client. In the event that the client
withdraws or deposits $10,000 or more into their accounts, the Registrant will either
provide a credit against the withdrawal or apply its fee to the contribution the
following quarter.
Fee Payment: Clients will be charged in advance, at the beginning of each calendar
quarter based upon the market value of the assets on the last business day of the
previous quarter. Clients may elect to have the Registrant’s advisory fees deducted
from their custodial account. In determining market value, the Registrant’s
reporting software includes accrued interest, but does not include accrued
dividends.
Termination of Advisory Relationship: A client agreement may be canceled at
any time, by either party, for any reason upon receipt of prior written notice. Upon
termination of any account, any prepaid, unearned fees will be promptly refunded,
and any earned, unpaid fees will be due and payable.
Investment Performance: As a condition to participating in the Program, the
participant must accept that past performance may not be indicative of future
results, and understand that the future performance of any specific investment or
investment strategy (including the investments and/or investment strategies
purchased
and/or undertaken by the Registrant) may not: (1) achieve their intended
objective; (2) be profitable; or, (3) equal historical performance level(s) or any other
performance level(s).
Client Responsibilities: In performing any of its services, the Registrant shall not
be required to verify any information received from the client or from the client’s
other professionals, and is expressly authorized to rely thereon. Furthermore, unless
the client indicates to the contrary, the Registrant shall assume that there are no
restrictions on its services, other than to manage the account in accordance with the
client’s designated investment objective. Moreover, it remains each client’s
responsibility to promptly notify the Registrant if there is ever any change in their
financial situation or investment objectives for the purpose of reviewing, evaluating
or revising the Registrant’s previous recommendations and/or services.
B. Participation in the Program may cost more or less than purchasing such services
separately. The Program fee charged by Registrant for participation in the Program
may be higher or lower than those charged by other sponsors of comparable wrap
fee programs. Because Program transaction fees are paid by the Registrant to the
account custodian/broker-dealer, the Registrant has an economic incentive to
minimize the number of trades in the client's account or select securities that do not
incur transaction fees.
Depending upon the percentage wrap-fee charged by the Registrant and the value
of custodial and other services provided, the wrap fee may or may not exceed the
aggregate cost of such services if they were to be provided separately.
C. The Program’s wrap fee does not include certain charges and administrative fees,
including, but not limited to, mark-ups and mark-downs, transfer taxes, odd lot
differentials, exchange fees, interest charges, American Depository Receipt agency
processing fees, wire fees, and any charges, taxes or other fees mandated by any
federal, state or other applicable law or otherwise agreed to with regard to client
accounts. These fees and expenses are in addition to the Program fee.
In addition, client accounts may invest in mutual funds (including money market
funds) and ETFs that have various internal fees and expenses (i.e., management
fees), which are paid by these funds but ultimately borne by clients as a fund
shareholder. These internal fees and expenses are in addition to the fees charged
by the Registrant. When beneficial to the client, individual fixed-income or equity
transactions may be effected through broker-dealers that the Registrant or the client
have entered into arrangements for prime brokerage clearing services, including
effecting certain client transactions through other broker-dealers. In that case, the
client generally will incur both the transaction fee charged by the executing broker-
dealer and a “trade away” fee charged by the custodian (i.e., Schwab). For Program
clients, commissions and trading fees, including trade away fees, are paid for by
the Registrant. Schwab does not currently charge transaction fees on U.S. equities,
exchange-traded funds, and certain “no-transaction fee mutual funds”. We
generally make investment decisions without regard to transaction fees
D. Registrant’s related persons who recommend the Program to clients do not receive
compensation specifically tied to a client’s participation in the Program. However,
the Registrant’s owners receive compensation in proportion to their ownership in
the Registrant. For more information, see your representative’s brochure
supplement.