A. Description of Your Advisory Firm
Riverpoint Wealth Management Holdings, LLC, d/b/a Riverpoint Wealth Management
(“Riverpoint” and/or “the firm”) is organized as an Illinois limited liability company. Riverpoint
Wealth Management Holdings, LLC, was founded in 2013, and is fully owned by Riverpoint
Wealth Management, LLC, which in turn is owned by Timothy P. McGrath, Riverpoint’s Managing
Partner and Chief Compliance Officer; Riverpoint’s predecessor firm, Riverpoint Wealth
Management, LLC, was founded in 2007 by Timothy P. McGrath.
A.1. Description of Advisory Services Offered (legacy)
Riverpoint offers its proprietary discretionary asset management services as a wrap fee program
sponsored by Riverpoint on a legacy basis. For its discretionary asset management services,
Riverpoint receives a signed investment advisory client agreement to effect securities
transactions on behalf of its clients that include securities and strategies described in Item 6.C of
this brochure.
Riverpoint’s discretionary asset management services are predicated on the client's investment
objectives, goals, tolerance for risk, and other personal and financial circumstances. Riverpoint
will analyze each client's current investments, investment objectives, goals, age, time horizon,
financial circumstances, investment experience, investment restrictions and limitations, and risk
tolerance and implement a portfolio consistent with such investment objectives, goals, risk
tolerance and related financial circumstances Riverpoint’s objective is to review the client’s tax,
financial, and estate planning objectives and goals in connection with the client’s investment
objectives, goals, tolerance for risk, and other personal and financial circumstances and make
appropriate recommendations and implementation decisions. Riverpoint may engage third-
party service providers to assist with the tax and estate planning portion of the services provided
to clients. In addition, Riverpoint may utilize third-party software to analyze individual security
holdings and separate account managers utilized within the client’s portfolio.
LPL Financial offers a trading platform with select exchange traded funds (“ETFs”) that do not
charge transaction fees. The no-transaction-fee ETF trading platform is available to clients
participating in LPL Financial’s Strategic Wealth Management (“SWM”) and Strategic Asset
Management (“SAM”) programs. Since our firm pays the transaction fees charged by LPL Financial
to clients participating in our wrap fee program, we are incentivized to recommend no-
transaction-fee ETFs over other types of securities and ETFs in order to reduce our costs. This
presents a conflict of interest because the limited number of ETFs available on the no-transaction
fee platform may have higher overall expenses than other types of securities and ETFs not included
in the platform. However, our firm and our IAR’s will follow our fiduciary duty and put our client’s
interests ahead of our own. In addition, other major custodians have eliminated transaction fees
for all ETFs and U.S. equities, so clients may pay more for investing in the same securities at LPL
Financial.
Riverpoint’s investment advisory services to clients take into account a client's personal financial
circumstances, investment objectives and tolerance for risk (e.g., cash-flow, tax and estate).
Riverpoint’s engagement with a client will include, as appropriate, the following:
Providing assistance in reviewing the client's current investment portfolio against the
client's personal and financial circumstances as disclosed to Riverpoint in response to a
questionnaire and/or in discussions with the client and reviewed in meetings with
Riverpoint.
Analyzing the client's financial circumstances, investment holdings and strategy, and
goals.
Providing assistance in identifying a targeted asset allocation and portfolio design.
Implementing and/or recommending individual equity and fixed income securities,
mutual funds and ETFs.
Reporting to the client on a quarterly basis or at some other interval agreed upon with
the client, information on contributions and withdrawals in the client's investment
portfolio, and the performance of the client's portfolio measured against appropriate
benchmarks (including benchmarks selected by the client).
Proposing changes in the client's investment portfolio in consideration of changes in the
client's personal circumstances, investment objectives and tolerance for risk, the
performance record of any of the client's investments, and/or the performance of any
fund retained by the client.
If the client’s portfolio and personal circumstances, investment objectives, and tolerance
for risk make such advice appropriate, providing recommendations to hedge a client’s
portfolio through the use of derivative strategies, to generate additional income through
the use of covered call option writing strategies involving exchange listed or OTC
options, and/or to monetize or hedge concentrated stock positions.
In addition to providing Riverpoint with information regarding their personal financial
circumstances, investment objectives and tolerance for risk, clients are required to provide the
firm with any reasonable investment restrictions that should be imposed on the management of
their portfolio, and to promptly notify the firm of any changes in such restrictions or in the
client's personal financial circumstances, investment objectives, goals and tolerance for risk. On
a quarterly basis, Riverpoint’s reports to clients will remind clients of their obligation to inform
the firm of any such changes or any restrictions that should be imposed on the management of
the client’s account. Riverpoint will also contact clients at least annually to determine whether
there have been any changes in a client's personal financial circumstances, investment objectives
and tolerance for risk.
A.2. Fees and Compensation
Riverpoint’s annual advisory fee for assets managed in the wrap fee program is an asset-based
fee calculated as a percentage of the value of the managed assets at 1.35%, which represents
the adviser’s maximum fees for individual services managed by the Adviser, excluding the
retirement accounts held by relatives of the Adviser’s employees. Riverpoint requires a minimum
account of $250,000 for investment advisory clients, although this may be negotiable under
certain circumstances. Riverpoint may group certain related client accounts for the purposes of
achieving the minimum account size. In certain circumstances, fees, account minimums, and
payment terms are negotiable depending on the client’s unique situation – such as the size of
the aggregate related party portfolio size, family holdings, low-cost basis securities, or certain
passively advised investments and pre-existing relationships with clients. Certain clients may pay
more or less than others depending on the amount of assets, type of portfolio, or the time
involved, the degree of responsibility assumed, complexity of the engagement, special skills
needed to solve problems, the application of experience, and knowledge of the client’s situation.
Riverpoint’s advisory fee includes charges for all transaction costs, such as commissions on
purchases and sales of securities, and trade-away fees. Except as otherwise provided below, the
client will incur no charges other than advisor’s fee in connection with maintenance of and
activity in the client’s account.
The wrap fee does not include management, administrative, and
marketing fees and expenses for mutual and exchange-traded funds. To the extent securities
transactions are effected away from LPL, there may be commission mark-ups and mark-downs
that the client will pay in addition to the wrap fee. It is important to note, as disclosed in the
ADV Part 2A, that our firm does not pay Third-Party Money Manager fees on behalf of clients, as
such, clients who’s assets are managed by a Third-Party will pay additional Advisory fees which
will be disclosed in the signed Service Agreement.
Asset-based fees are always subject to the investment advisory agreement between the client
and Riverpoint. Such fees are payable according to the client’s assigned billing cycle based upon
the value of the accounts on the last business day of the previous Cycle’s applicable quarter. We
have three different billing cycles which are billed as follows: Cycle 1 is billed in January, April,
July and October. Cycle 2 is billed in February, May, August, and November. Cycle 3 is billed in
the calendar year quarters March, June, September and December. The fees will be prorated if
the investment advisory relationship commences otherwise than at the beginning of a billing
cycle. Adjustments for contributions to a client’s portfolio are prorated for the quarter in which
the change occurs; adjustments will be made for deposits and withdrawals.
The client authorizes the qualified custodian to automatically deduct the fee and all other
charges payable hereunder from the assets in the account when due, with such payments to be
reflected on the next account statement sent to the client. If insufficient cash is available to pay
such fees, securities in an amount equal to the balance of unpaid fees will be liquidated to pay
for the unpaid balance.
A client investment advisory agreement may be canceled at any time by the client or by
Riverpoint with 30 days’ prior written notice to the client. Upon termination, any prepaid,
unearned fees will be promptly refunded. The client has the right to terminate an agreement
without penalty within five business days after entering into the agreement.
B. Disclosure of Cost Difference if Services Purchased Separately
Depending on a number of factors, such as the number, size, and nature of the securities
transactions in an advisory account, the overall fees and charges borne by the client over time
could be more or less than what these fees and charges would be if the same services were
provided on a separate basis, either as asset-based fees or transaction-based fees. Bundled fees
(where the adviser assumes the cost of processing the trade) generally provide an economic
incentive for the advisory firm to select investments and strategies that minimize trading costs.
Frequent trading in an account where transactions fees are included as part of the overall
advisory fee to the client drives trading costs higher and reduces the overall fee revenue to the
advisor. As a result, higher trading costs in a bundled fee account have a negative impact on the
advisory firm’s profitability.
In order to mitigate this conflict of interest and ultimately ensure that all clients receive equal
quality of service and pricing, Riverpoint has instilled a reimbursement program under the non-
wrap Comprehensive Portfolio Management Service where any transaction fees incurred in a
non-wrap account are reimbursed to the clients by Riverpoint and as such, clients do not benefit
from investing through a non-wrap account versus a wrap account. Furthermore, Riverpoint has
no additional economic benefit from recommending that clients subscribe to the wrap vs. non-
wrap offering and vice-versa. Riverpoint has implemented this policy in response to the ongoing
changes by most large broker-dealers distancing themselves from transaction fees and as such
allows clients to transition over to a non-wrap service model without being negatively affected.
Per this reimbursement program, the fee charged for our wrap fee Comprehensive Portfolio
Management is identical to the fee charged for our non-wrap Comprehensive Portfolio
Management service.
C. Additional Client Fees and Terms of Payment
C.1. Client Payment of Fees
Riverpoint generally requires clients to authorize the direct debit of fees from their accounts.
Exceptions may be granted subject to the firm’s consent for clients to be billed directly for our
fees. For directly debited fees, the custodian’s periodic statements will show each fee deduction
from the account. Clients may withdraw this authorization for direct billing of these fees at any
time by notifying us or their custodian in writing.
Riverpoint will deduct advisory fees directly from the client’s account provided that (i) the client
provides written authorization to the qualified custodian, and (ii) the qualified custodian sends
the client a statement, at least quarterly, indicating all amounts disbursed from the account.
The client is responsible for verifying the accuracy of the fee calculation, as the client’s custodian
will not verify the calculation.
C.2. Prepayment of Client Fees
Riverpoint generally requires investment advisory fees to be prepaid on a quarterly basis.
Riverpoint’s fees will either be paid directly by the client or disbursed to Riverpoint by the
qualified custodian of the client’s investment accounts, subject to prior written consent of the
client. The custodian will deliver directly to the client an account statement, at least quarterly,
showing all investment and transaction activity for the period, including fee disbursements from
the account.
A client investment advisory agreement may be canceled at any time by the client or by
Riverpoint with 30 days’ prior written notice to the client. Upon termination, any unearned,
prepaid fees will be promptly refunded. The client has the right to terminate an agreement
without penalty within five business days after entering into the agreement.
C.3. Additional Fees
All fees paid for investment advisory services are separate and distinct from the fees and
expenses charged by mutual funds and exchange-traded funds. Such fees and expenses are
described in each fund’s prospectus. Clients are advised to read these materials carefully before
investing. Please refer to the Brokerage Practices section (Items 9.B. and 9.B.) for additional
information regarding the firm’s brokerage practices.
D. Compensation for Recommending the Riverpoint Wrap Fee Program
Riverpoint’s suite of services is a proprietary service offering offered to affiliated and unaffiliated
investment adviser firms. As such, there are no conflicts of interest in that there are no
commissions or referral fees paid to anyone for selling or recommending Riverpoint or any of its
services. The firm earns its advisory fees and neither shares in third-party investment manager
fees nor shares in any custody fees charged by its clients’ custodians.
E. External Compensation for the Sale of Securities to Clients
Riverpoint’s advisory professionals are compensated primarily through a salary and bonus
structure. Riverpoint’s advisory professionals may also receive commission-based compensation
for the sale of insurance products. Please see Item 9.A.2 for detailed information and conflicts of
interest.
F. Client Assets Under Management
As of December 31, 2022, Riverpoint manages $547,003,145 all of which are on a discretionary
basis.