Beacon Investment Advisory Services, Inc. (“BIAS” or “Beacon Trust”) has been in business as a registered
investment adviser since April 2015. BIAS does business under the name, Beacon Trust. Beacon
Trust is owned by Beacon Trust Company which is a New Jersey limited purpose trust company. Beacon
Trust Company is owned by Provident Bank which is owned by Provident Financial Services, Inc. a
publicly traded company (NYSE: PFS). The firm seeks to guide its clients through the lifecycle of wealth
creation, wealth management, and intergenerational wealth transfer.
Beacon Trust provides financial planning, tax preparation, and asset management services to its clients.
Prior to engaging Beacon Trust to provide any investment advisory services, the client is required to
enter into one or more written agreements with Beacon Trust setting forth the terms and conditions under
which Beacon Trust renders its services (collectively the “Agreement”).
When we provide investment advice to you regarding your retirement plan account we are fiduciaries within
the meaning of Title I of the Employee Retirement Income Security Act and/or the Internal Revenue
Code, as applicable, which are laws governing retirement accounts. The way we make money creates
some conflicts with your interests, so we operate under a special rule that requires us to act in your best
interest and not put our interests ahead of yours. Some aspects of the rule are included throughout this
document.
In addition, under this special rule’s provisions, we must:
• Meet a professional standard of care when making investment recommendations (give
prudent advice);
• Never put our financial interests ahead of yours when making recommendations (give loyal
advice);
• Avoid misleading statements about conflicts of interest, fees, and investments;
• Follow policies and procedures designed to ensure that we give advice that is in your best
interest;
• Charge no more than is reasonable for our services; and
• Give you basic information about conflicts of interest.
As of December 31, 2023, Beacon Trust managed approximately $4 billion of regulatory assets under
management on a discretionary basis.
This Disclosure Brochure describes the business of Beacon Trust. Certain sections will also describe
the activities of Supervised Persons. Supervised Persons are any of Beacon Trust’s officers, directors (or
other persons occupying a similar status or performing similar functions), or employees, or any other person
who provides investment advice on Beacon Trust’s behalf and is subject to Beacon Trust’s supervision or
control.
Financial Planning and Tax Preparation
Beacon Trust may provide its clients with a broad range of comprehensive financial planning and tax related
services. Beacon Trust works to lead each of its clients through the firm’s holistic planning process
in an organized series of steps. Specific disciplines addressed in the planning process include:
• Family governance
• Compensation and benefits
• Income tax minimization
• Cash flow planning
• Net worth analysis
• Education/goal planning
• Long-term retirement planning
• Estate planning
• Charitable giving
• Risk exposure analysis & management
• Asset allocation planning
• Portfolio design
Beacon Trust may recommend the products and services of itself and/or other professionals to implement
its recommendations. Clients are advised that a conflict of interest exists if Beacon Trust recommends
its own products and/or services, for which the client may pay more or less compared to other non-affiliated
products and services. As described further in this brochure, Beacon Trust may recommend products or
services of its affiliate, Beacon Trust Company. However, this conflict is mitigated since the client is
under no obligation to act upon any of the recommendations made by Beacon Trust under a financial
planning or consulting engagement or to engage the services of any such recommended professional,
including Beacon Trust itself. The client retains absolute discretion over all such implementation decisions
and is free to accept or reject any of Beacon Trust’s recommendations. Clients are advised that it remains
their responsibility to promptly notify Beacon Trust if there is ever any change in their financial situation or
investment objectives for the purpose of reviewing, evaluating, or revising Beacon Trust’s previous
recommendations and/or services.
Investment and Wealth Management Services
Clients can engage Beacon Trust to manage all or a portion of their assets on a discretionary basis. As
detailed in Item 8, Beacon Trust allocates clients’ investment management assets in both in-house equity
and fixed income strategies, as well as with Independent Managers (as defined below), mutual funds
(including Beacon Trust managed funds), exchange-traded funds (“ETFs”), individual debt and equity
securities, options, investment limited partnerships, or other investments in accordance with the objectives
of the client. If appropriate, Beacon Trust may provide advice about any type of investment held in clients'
portfolios.
Beacon Trust will, on occasion, render non-discretionary investment management services to clients
relative to variable life/annuity products that they may own, their individual employer-sponsored retirement
plans, and/or 529 plans or other products that may not be held by the client’s primary custodian. In so doing,
Beacon Trust either directs or recommends the allocation of client assets among the various investment
options that are available. Client assets are maintained at the specific insurance company or custodian
designated by the service.
Beacon Trust tailors its advisory services to the individual needs of clients. Beacon Trust consults with
clients initially and on an ongoing basis to determine risk tolerance, time horizon and other factors that may
impact the clients’ investment needs. Beacon Trust ensures that clients’ investments are suitable for their
investment needs, goals, objectives, and risk tolerance. This would include ensuring clients are invested in
the most advantageous mutual fund share class, at the time of investment, as well as at the time which client
assets may be transferred to Beacon Trust, and on an ongoing basis. At times, a more advantageous share
may exist, however, the client may not be eligible for inclusion, due to the size of investment or mutual
fund company contractual agreements with the custodian or Beacon Trust.
Clients are advised to promptly notify Beacon Trust if there are changes in their financial situation or
investment objectives or if they wish to impose any reasonable restrictions upon Beacon Trust’s
management services. Clients may impose reasonable restrictions or mandates on the management of their
account (e.g., require that a portion of their assets be invested in socially responsible funds) if, in Beacon
Trust’s sole discretion, the conditions will not materially impact the performance of a portfolio strategy or
prove overly burdensome to its management efforts. If it is determined that it has a material impact, Beacon
Trust will work with the client to tailor the desired restriction into the investment management services.
Use of Independent Managers
As mentioned above, Beacon Trust recommends that certain clients authorize the active discretionary
management of a portion of their assets by and/or among certain independent investment managers
(“Independent Managers”), based upon the stated investment objectives of the client. The terms and
conditions under which the client engages the Independent Managers are set forth in a separate written
agreement between Beacon Trust or the client and the designated Independent Managers. Beacon Trust
renders services to the client relative to the discretionary selection of Independent Managers. Beacon Trust
also monitors and reviews the account performance and the client’s investment objectives. Beacon
Trust receives an annual advisory fee which is based upon a percentage of the market value of the
assets being managed by the designated Independent Managers.
When selecting an Independent Manager for a client, Beacon Trust reviews information about the
Independent Manager such as its disclosure brochure and/or material supplied by the Independent Manager
or independent third parties for a description of the Independent Manager’s investment strategies, past
performance and risk results to the extent available. Factors that Beacon Trust considers in recommending
an Independent Manager include the client’s stated investment objectives, as well as the manager’s
management style, performance, reputation, financial strength, reporting, pricing, and Beacon’s research of
the manager. The investment management fees charged by the designated Independent Managers,
together with the fees charged by the corresponding designated broker- dealer/custodian of the
client’s assets, may be exclusive of, and in addition to, Beacon Trust’s investment advisory fee set
forth above. As discussed above, the client may incur additional fees separate from those charged by
Beacon Trust, the designated Independent Managers, and corresponding broker-dealer and
custodian.
In addition to Beacon Trust’s written disclosure brochure, the client also receives the written disclosure
brochure of the designated Independent Managers. Certain Independent Managers may impose more
restrictive account requirements and varying billing practices than Beacon Trust.
Management of the Mutual Funds
Beacon Accelerated Return Strategy Fund (“BARLX")
The mutual fund (“Fund”) Fund’s investment objectives are capital appreciation and alpha generation. The
Fund aims to achieve its investment objective of capital appreciation by investing in call options that
replicate the returns of the broad U.S. equity indices. The Fund aims to achieve its investment objective of
alpha generation by purchasing and selling call options on U.S. equity indices to enhance the returns and
generate premium income. The Fund aims to achieve its investment objective through the systematic
purchase of rolling investments or “tranches”. Each tranche is made up of long and short options traded on
the performance of a broad market index. Index exposure may be gained
using additional options, a basket
of securities, exchange traded funds (“ETFs”) or other means.
Beacon Planned Return Strategy Fund (“BPRLX”)
This Fund’s investment objectives are capital preservation and capital appreciation. The Fund aims to
achieve its investment objective of capital preservation by purchasing put options against the U.S. equity
indices. The Fund aims to achieve its investment objective of capital appreciation by purchasing call options
on U.S. equity indices and collecting premium income from selling call and put options against the U.S.
equity indices. The Fund aims to achieve its investment objective through the systematic purchase of rolling
investments or “tranches”. Each tranche is made up of long and short options traded on the performance of
a broad market index. Index exposure may be gained using additional options, a basket of securities, ETFs,
or other means.
You may pay more in fees if you are invested in the Beacon Funds than if invested in other funds
available through the Wrap Program.
All clients are invested in the most advantageous share class available in both funds. This creates a conflict
of interest since we have a financial incentive to recommend the Beacon Funds to you. Beacon mitigates
this conflict by not charging advisory fees on top of Fund management fee as the Beacon Funds are excluded
from fee calculations.
The Funds are registered under the Investment Company Act of 1940 and the interests of which are
registered pursuant to the Securities Act of 1933.
Wrap Program
Beacon Trust offers the Beacon Trust wrap program (“Wrap Program”) through Schwab Advisor Services
division of Charles Schwab & Co., Inc. (“Schwab”), a registered broker-dealer, member SIPC, as described
below. Beacon Trust offers the Wrap Program, if deemed appropriate, to interested prospects and advisory
clients. Beacon Trust is the sponsor of the Wrap Program and the party responsible for marketing it.
Generally, the clients in the Wrap Program include high net worth individuals and trusts. The fees for the
program are listed later in the document. Beacon Trust does not offer different tiers of fees for these
accounts. If a client wants an account that is non-discretionary, that can be accommodated, if reasonable to
the firm, and suitable to the client, at a different fee structure.
The description of the Wrap Program herein is a summary and a copy of the Beacon Trust wrap fee brochure
(Form ADV Part 2A Appendix 1) is available to clients upon request without charge.
The Beacon Trust portfolio management group pursues investment strategies as follows:
• The Core Strategy portfolio seeks to provide long-term capital appreciation by investing in the
common stock of companies that have compelling financial characteristics and disruptive catalysis
to drive growth. The strategy focuses on companies with above-average return on invested capital
(ROIC), free cash flow margins, and revenue growth. Valuation measures such as the price/earnings
ratio relative to the strategy’s benchmark, the S&P 500, are considered but are not a driving factor
in the management of the strategy. Core’s managers are financial analysts that use quantitative
screens and a qualitative review to select companies that have the potential to compound their capital
value at an above-average rate over a five year period, without incurring above average risk.
• The Income and Appreciation portfolio is comprised of highly rated stocks according to Beacon
Trust’s multifactor models. A blend of growth and value, the portfolio holds about 40 stocks with
a minimum capitalization of $2 billion. There is an emphasis to generate a dividend yield
significantly higher than the S&P 500. The Income and Appreciation portfolio is actively managed
with constant portfolio manager oversight, risk management and a process-driven trading strategy.
It includes current income, capital appreciation and total return. In stock selection, the portfolio
tries to be cognizant of portfolio risk characteristics.
• The ‘FIRM’ portfolio, an acronym for Factor Information Return Model, utilizes factors in the
portfolio construction process. Factors are underlying exposures that explain and drive stock
returns. The factor approach provides opportunity to replicate the best parts of the market, can
provide diversification, avoids overexposure to growth and large-cap biases, and avoids poorly
compensated risks. It utilizes three transparent factors that have historically driven above-average
stock returns: Quality: Low volatility in earnings per share (EPS) and low debt to equity; Valuation:
Low price to earnings (P/E) ratio; and Size: Small market capitalization. The portfolio is constructed
from the S&P 500 universe by ranking the aforementioned factors independently utilizing a
screening process. The monthly reconstitution process replaces stocks falling short of the factor
standards with higher ranking stocks in each quartile. The process is predominantly quantitative,
thereby reducing fundamental judgments and portfolio manager biases in stock selection.
• The ‘HI-DIV’ portfolio recognizes the historical importance of dividends within the total return
compounding process. It holds high quality companies that we believe are committed to appropriate
capital deployment activities, including competitive dividend payouts to shareholders. Holdings
will have one of the following three attributes: above average current dividend yield; attractive
dividend growth potential; or prospective dividend growth in excess of market expectations. The
strategy maintains a long-term time horizon which generally results in low portfolio turnover.
• In addition, Beacon Trust constructs household level portfolios of mutual funds, ETFs and managed
accounts, for its clients.
The ETF model portfolios’ process was developed by our investment committee based upon the
principles of behavioral finance. The result is a portfolio that is specifically matched to a client’s
risk tolerance. Beacon Trust does this by optimizing the portfolio based upon the expected return,
volatility and correlation of the underlying components. Beacon Trust considers the following
factors rooted in behavioral finance when determining a client’s economic and emotional risk
tolerances:
1. Investment objective
2. Portfolio risk definition
3. Reaction to levels of loss
4. The risk/return trade off
5. Potential losses vs. potential gains
6. Anxiety of losses vs. the satisfaction of gains
7. Investment performance time horizon
8. Stability of potential returns
9. Personal goals vs. benchmark comparison
10. Spending or gifting levels
Conservative ETF Strategy: tends to hold a larger percentage of fixed income assets
compared to equity and alternative assets;
Balanced ETF Strategy: tends to hold similar amounts of equity and fixed income assets,
although this may change depending on our macroeconomic outlook;
Aggressive ETF Strategy: tends to hold a larger percentage of equity assets compared to
fixed income and alternative assets.
• Additionally, Beacon Trust’s fixed income strategies invest individual client portfolios using direct
ownership of bonds and other fixed income securities in an individual account, allowing for
customized restrictions and tax management. Beacon Trust’s philosophy in trading fixed income
for our clients is to minimize risk and find safety in big names with high credit quality.
Taxable Fixed Income: Beacon Trust focuses on active portfolio management to construct and
manage limited duration, high quality taxable portfolios, while seeking to produce income and
preserve principal. Portfolios are managed in a separate account for full transparency and income
predictability. The team analyzes the interest rate forecast for 12-24 months and attempts to
determine the optimal point on the yield curve for mature structure, and then identifies attractive
sectors within the taxable marketplace, and then opportunistically trade in the marketplace to
purchase bonds at institutional levels.
Tax Exempt Fixed Income: Beacon Trust focuses on active portfolio management in an effort to
construct and manage limited duration, high quality tax-exempt portfolios, while seeking to maximize
after-tax income while preserving principal. Portfolios are managed in a separate account for full
transparency and income predictability. The team analyzes the interest rate forecast for 12-24
months and attempts to determine the optimal point on the yield curve for mature structure, and
then identifies attractive sectors within the tax- exempt marketplace, and then opportunistically
trade in the marketplace to purchase bonds at institutional levels.
Clients may elect to pursue these strategies through the Wrap Program, under which clients will pay
a single fee (i.e., wrap fee) to Beacon Trust, and Beacon Trust will then be responsible for all
brokerage expenses. By enrolling in the Wrap Program, clients are choosing the brokerage services
of Schwab. Assets placed in the Wrap Program are managed on a fully discretionary basis by
Beacon Trust.
Review & Reports of Account
Beacon Trust’s Wrap Fee Program accounts will be formally reviewed at least annually, in addition to the
regular contact with clients for investment discussions specific to account needs and services, to determine
that the account holdings are consistent with the investor profile, investment restrictions and risk objectives.
More frequent reviews may be triggered by material changes in variables such as the client’s individual
circumstances, the market, and political or economic environment. Program clients will receive account
statements, at least quarterly, and transaction confirmations directly from their custodian(s). Beacon Trust
may arrange for periodic performance reports to be delivered to the client or made available to the client in
other electronic forms. This would include a review of positions transferred in-kind from other financial
institutions. You should ensure that you compare these reports to those provided by the custodian.
401k Plan Advisory
At times, Beacon Trust may enter into an agreement to provide advice to the individual participants of 401k
plans. The advice given is specific to the plan itself and only affects those participants in the plan under
contract. This advice does not involve specific security or portfolio selection, therefore no conflict should
exist.