HFSI has been in business since June 23, 1998. We are owned by a parent company, Hantz
Group, Inc., whose majority shareholder is John R. Hantz.
We offer services as an investment adviser, broker-dealer, and mortgage broker. We offer a va-
riety of investment advisory services to our clients, including financial planning, investment
portfolio management services, and retirement plan services. We tailor our advice and services
to the stated objectives of each of our clients. Our affiliates and our representatives offer other
services described throughout this brochure.
Financial Planning Services
Our financial planning and consulting services are offered in three different packages: (1)
the Horizon Planning Service; (2) the Premier Planning Service; and (3) the Premier Busi-
ness Planning Service.
For each of these service packages, we gather information through in-depth personal in-
terviews with you. This may include one or more in-person meetings and/or telephone
calls. We may gather information that includes, but is not limited to, your current financial
position, future goals and attitudes toward risk, and investment objectives. We ask you
to fill out a client profile questionnaire that we will carefully review, along with all other
documentation you supply. Because we do not independently verify, and instead rely
only upon the information you provide to us, it is imperative that you update information
that impacts your financial condition whenever it changes. Based on the information you
provide, we will initially provide our advice in the form of a written financial plan. You
should review the financial plan carefully and ask questions. The financial plan is de-
signed to help you achieve your stated financial goals and objectives, but there can be no
assurance that you will attain those goals and objectives because of many variables be-
yond our control.
If you choose to implement your financial plan, we recommend that you work closely
with a team of qualified professionals, which may include a securities broker, insurance
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agent, tax advisor, accountant, and attorney. You are not obligated to use our services, or
the services of our affiliates and representatives, to implement any part of your financial
plan. If you choose to implement our recommendations, you will incur additional costs
that are not covered by our financial planning and consulting fees, as described below
under the section heading, “
Fees and Compensation.”
Horizon Planning Service™
This package of our basic planning services typically includes an analysis and
presentation of the following topics that are pertinent to individuals: financial po-
sition, protection planning, basic investment planning, retirement planning, estate
planning (excluding legal services), and income tax considerations (excluding tax
return preparation services). These basic financial planning services are all pro-
vided by us.
Premier Planning Service™
This package of our advanced planning services typically includes an analysis and
presentation of the following topics that are pertinent to higher net worth individ-
uals and business owners:
● Financial position (including assets and liabilities, in-
come and expenses, and debt strategies);
● Asset protection planning (including disability income,
survivor income, long term care, home, auto and lia-
bility insurance, business owner concerns);
● Investment planning (including asset alloca-
tion, accumulation goals, and education plan-
ning);
● Retirement planning (including income and expenses,
lump sum distribution planning, and business owner con-
cerns); and
● Estate planning (excluding legal services).
This package includes income tax planning and tax return preparation by Hantz
Tax & Business, LLC, or another of our Tax and Business Consulting Affiliates
specified in the Financial Planning and Consulting Services Agreement.
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Premier Business Planning Service™
This package of our advanced planning services typically includes an analysis and
presentation of the following topics that are pertinent to businesses and business
owners:
● Business accounting services (including accounting and
tax preparation);
● Entity structure (including liability, tax implications,
and ownership and entity review);
● Executive compensation analysis (including selec-
tive benefits, ownership percentage, and key em-
ployees);
● Qualified retirement plans (including employer
funded plans, employee funded plans, and maxi-
mum owner contributions); and
● Succession planning (including buy-sell and related
key person insurance arrangements, and transition
strategies).
You are able to select the specific services you desire and they will also be speci-
fied in the Financial Planning and Consulting Agreement that we will enter into
with you. These consulting services are provided by our affiliates, Hantz Tax &
Business, LLC, or the Tax and Business Consulting Affiliate specified in the Fi-
nancial Planning and Consulting Services Agreement. However, HFSI provides
all financial planning and investment advisory services.
Termination of Financial Planning Services
You may terminate our services without incurring any fee or penalty within the
first five business days after you sign our Financial Planning and Consulting
Agreement. After the initial five-business day period, you or we may terminate the
contract by giving five business days’ written notice for any reason or no reason.
Upon termination of our Financial Planning and Consulting Agreement, we will
refund your prepayment for services if no services have been performed. We typ-
ically will not refund client payments if we have already performed substantial
services in the engagement. If you terminate our services after we have delivered
the financial plan and performed our services, you are responsible to pay the re-
maining balance due.
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Retirement Plan Services
If you are a retirement plan sponsor, we offer retirement plan consulting services to assist
you in meeting your fiduciary obligations to your company sponsored Defined Contribu-
tion Plan or Defined Benefit Plan. We can provide these services either on an ongoing
basis or by way of a specific or one-time project-based request.
Through interviews with the appropriate individuals at your company, we identify and
confirm, together with you, targeted goals and objectives. Based upon information you
provide, we are able to offer fiduciary and non-fiduciary services for your selection, as
needed.
Fiduciary services, as defined under 3(21)(A) of the Employee Retirement Income Secu-
rity Act of 1974 (“ERISA”), are provided under a Retirement Plan Services Agreement
and Investment Manager Services, as defined in Section 3(38) of ERISA, under a Discre-
tionary Investment Management Agreement (collectively “Retirement Plan Consulting
Agreements”).
A Retirement Plan Consulting Agreement is provided prior to the start of our relationship
and dependent upon your selections, may include the following services:
● Develop or supply assistance to develop, document, and review
your plan’s investment policy;
● Recommendations regarding the retention, selection, or termination
of certain designated investment alternatives and/or qualified de-
fault investment alternatives in accordance with your plan’s guide-
lines; and
● Preparation and presentation of periodic investment measurement re-
ports for your plan. These reports typically include analyses and rec-
ommendations regarding (1) the current investment market environ-
ment, as well as possible future market trends; (2) manager perfor-
mance and asset allocation; (3) reporting provided by Custodians and
Administrators; (4) investment performance and investment costs of
current selections compared to benchmarks and market averages.
● Provide participant level advice to your current employees in the plan
if you select that service in the Participant Advice Supplement (“Sup-
plement”) to our agreement with you. If you select participant level
advice, each employee seeking individual advice will in turn sign a
separate Participant Acknowledgement electing to utilize the service
while actively employed by the plan sponsor. Participant level advice
is only applicable to participant account(s) held within the retirement
plan while the participant is employed by your company.
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Through interviews with employee participants who desire our advice,
our representatives will gather information regarding their time hori-
zon, risk tolerance, and investment goals. Based on the information
obtained, our representatives will provide non-discretionary invest-
ment recommendations to the plan participant in regards to their re-
tirement plan account. Non-discretionary investment advice means
that the participant must choose whether to follow and implement the
advice or recommendations that we provide to them.
● Select, monitor, remove, and replace the Plan’s Designated Investment
Alternatives, including the plan’s qualified default investment alterna-
tive, consistent with the Plan’s IPS or written investment objectives.
● Non-fiduciary consulting services may include services regarding plan
design, service provider evaluation, training, and participant educa-
tion.
Termination of Retirement Plan Services
As the plan sponsor, you may terminate the Retirement Services Consulting
Agreement without incurring fees or penalties within 5 business days after enter-
ing into this contract.
After 5 business days, you or we may terminate the Retirement Plan Consulting
Agreement by providing 15 days’ prior written notice. The Agreement will then
terminate on the month end immediately following the 15-day notice period
(“
Termination Date”). We will prorate our compensation to the Termination
Date. With the exception of any compensation due and owing upon termination,
we do not have any additional termination charges or termination fees. After the
Termination Date, we will have no further duties or obligations to the Plan.
The participant level advice Supplement may be terminated at any time by you or
us upon 10 business days’ prior written notice. After termination of the Supple-
ment, participant advice will no longer be available to plan participants.
An employee of a plan sponsor may also individually select to terminate their
Participant Acknowledgment at any time by sending written notice to us at our
address on the cover of this brochure. We will also discontinue providing partici-
pant advice when an employee ends his or her employment with you or your affil-
iates.
Investment Portfolio and Wealth Management Services
We offer portfolio management services in which we manage your investment assets
based upon your individual financial and personal needs, investment objectives, time
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horizon, and risk tolerance. Our investment management services generally include allo-
cating your assets in accordance with one or more of our model portfolios (referred to as
Representative-as-Portfolio Manager, or RPM), all of which employ the use of a broad
range of no-load or load-waived mutual funds, exchange-traded funds (“ETFs”), and sep-
arately managed accounts by third-party money managers. A model portfolio is how we
communicate to you what specific investments you should have in your portfolio at any
given time, depending on your investment objectives and risk tolerance, among other fac-
tors. We will typically provide quarterly rebalancing services to your portfolio to help
maintain the asset allocation consistent with the model portfolio(s) selected for your ac-
count.
To enhance the speed and efficiency of RPM trading, reconciliation, and related services,
we utilize the services of an unaffiliated “Turnkey Asset Management Platform”
(“TAMP”), SmartX Advisory Solutions, LLC, an SEC-registered investment adviser
(https://adviserinfo.sec.gov/firm/summary/297680). We will use the TAMP to direct the
execution and reconciliation of the trades performed in your RPM account.
On occasion and where suitable for you, we may also allocate your assets among alterna-
tive investments, including privately placed securities such as hedge funds, private equity
funds, and real estate funds. Additional differences in holdings may stem from legacy
securities transferred into the account, cash available for the purchase of securities and
gradients of risk tolerance that you may request within the same investment objective.
The history, timing, and sometimes unique holdings in your account may result in your
investment returns being different from other clients with the same or similar investment
objective.
In certain cases, we may also provide investment advisory services to you within your
ERISA covered retirement plan. These services include, but are not limited to analysis of
plan investment options, implementation of reallocation recommendations and general ac-
count servicing. Our ability to provide these services to you will be set forth in the written
Investment Advisory Agreement that you will enter into with us which will include the
scope of services to be provided as well as the cost of those services. You are under no
obligation to employ our services in your ERISA covered plan.
Because we tailor our advisory services to meet your individual needs and seek on a con-
tinuous basis to ensure that your portfolio is managed in a manner consistent with your
needs and objectives, we will consult with you on an initial and ongoing basis to assess
your specific risk tolerance, time horizon, liquidity constraints, and other related factors
relevant to the management of your portfolio. As a result, we require your active partici-
pation while we formulate advice and recommendations. We do not verify the accuracy
of the data you provide. We assume that the information you provide is reliable and cur-
rent. We may also request the names and relationships of other advisors (e.g., attorney,
accountant, banker, etc.). You should promptly notify us whenever there are changes in
your financial situation or if you wish to place any limitations on the management of your
portfolio.
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We are able to manage your assets on a discretionary or non-discretionary basis, as deter-
mined by you and as set forth in the written Investment Advisory Agreement that you
will enter into with us. When managing assets on a discretionary basis, we will deter-
mine the portfolio for your account consistent with your stated investment objectives and
risk tolerance. You may also provide us with written guidelines and restrictions with re-
spect to our authority to invest in certain securities or types of securities so long as they
are reasonable and do not materially affect the performance of a model portfolio manage-
ment strategy or prove overly burdensome to our management efforts. If we manage
your assets on a non-discretionary basis, then you will retain the authority to make the
investment decisions prior to our implementing them. See Item 16, entitled, “Investment
Discretion” for more information.
Our Investment Advisory Agreement may be terminated by you or us at any time by
providing the other party with five business days written notice. Advisor will not prorate
or refund pre-paid advisory fees, which are deemed fully earned at the beginning of each
monthly billing period.
Termination of an Investment Advisory Agreement will not affect any liabilities or obli-
gations we have incurred or that have arisen from transactions initiated under the agree-
ment prior to the termination date, such as the purchase of investments by us for your ac-
count. You remain responsible for any cost incurred in transferring assets from your ac-
count to a different account or custodian. After the date the agreement terminates, we
will have no further duties or obligations to you under the agreement.
Globally Diversified Dynamic ETF Model Portfolios (“Dynamic Model(s)”)
The HFSI Globally Diversified Dynamic ETF Model Portfolios we offer have been de-
signed around SEC-registered exchange-traded products (ETPs), primarily including ex-
change traded funds (ETFs), with various investment characteristics and parameters of-
fering a series of investment options for our clients across five levels of risk and volatil-
ity, each level having an anticipated range of risk and volatility driven by the underlying
securities held by the ETPs and ETFs.
Typically, future prospects for greater investment returns bear greater risks, commonly
reflected in price and trading volatility, including potential loss of income and principal.
Our assessment of the relative risks and volatility of different categories of investments,
as well as specific investments, are affected by many variables beyond our control and
represent our professional judgment that under no circumstances can be guaranteed or as-
sured.
Each of our Dynamic Model portfolios includes varying asset allocations among different
ETPs and ETFs having different investment characteristics and risks including, among
others (i) domestic and foreign equities of issuers having varying levels of capitalization,
investment characteristics, historical performance, and other considerations; and (ii) fixed
income securities issued by federal, state, and local governments and corporate issuers
with varying levels of capitalization, investment characteristics, credit enhancements,
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credit histories, and other credit-related considerations. Historical performance and credit
histories do not assure the future performance of those securities.
We call each of our Dynamic Model portfolios an “Hantz Dynamic Global Allocation
ETF Gear.” Each Hantz Dynamic Global Allocation ETF Gear has been designed and
will be maintained within specific investment-related parameters that, in our professional
judgment, pertain to its relative level of market, price, and liquidity risks, returns, and
volatility. Our Dynamic Global Allocation ETF Gears range from 1 to 5 based on our as-
sessment of its anticipated risks and volatility. In our judgement, we classify the compar-
atively lowest anticipated risk and volatility as “Hantz Dynamic Global Allocation ETF
Gear 1” and the highest as “Hantz Dynamic Global Allocation ETF Gear 5”. Higher
Gears have greater asset allocations to equity securities than fixed income securities.
Risk and volatility are very important among the various investment-related considera-
tions potentially affecting anticipated investment performance. See Item 8,
Methods of
Analysis, Investment Strategies and Risk of Loss, as amended from time to time, for addi-
tional information regarding our investment strategies, practices, and related risk consid-
erations.
Typically, once each year, and in special cases more frequently, the model composition
and allocation weights may be adjusted. The timing of our rebalancing of a Dynamic
Model may be affected by tax-related considerations for clients as a whole but not with
respect to any specific client’s circumstances. See Item 4,
Advisory Business, for addi-
tional information.
Globally Diversified Active ETF Model Portfolios (“Active Model(s)”)
The HFSI Globally Diversified Active ETF Model Portfolios we offer have been de-
signed around SEC-registered exchange-traded products (ETPs), primarily including ex-
change traded funds (ETFs), with various investment characteristics and parameters of-
fering a series of investment options for our clients across five levels of risk and volatil-
ity, each level having an anticipated range of risk and volatility driven by the underlying
securities held by the ETPs and ETFs.
Typically, future prospects for greater investment returns bear greater risks, commonly
reflected in price and trading volatility, including potential loss of income and principal.
Our assessment of the relative risks and volatility of different categories of investments,
as well as specific investments, are affected by many variables beyond our control and
represent our professional judgment that under no circumstances can be guaranteed or as-
sured.
Each of our Active Model portfolios includes varying asset allocations among different
ETPs and ETFs having different investment characteristics and risks including, among
others (i) domestic and foreign equities of issuers having varying levels of capitalization,
investment characteristics, historical performance, and other considerations; and (ii) fixed
income securities issued by federal, state, and local governments and corporate issuers
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with varying levels of capitalization, investment characteristics, credit enhancements,
credit histories, and other credit-related considerations. Historical performance and credit
histories do not assure the future performance of those securities.
We call each of our Active Model portfolios an “American Drive Model Portfolio Ac-
tively Managed ETF Gear.” Each American Drive Model Portfolio Actively Managed
ETF Gear has been designed and will be maintained within specific investment-related
parameters that, in our professional judgment, pertain to its relative level of market, price,
and liquidity risks, returns, and volatility. Our American Drive Model Portfolio Actively
Managed ETF Gears range from 1 to 5 based on our assessment of its anticipated risks
and volatility. In our judgement, we classify the comparatively lowest anticipated risk
and volatility as “American Drive Model Portfolio Actively Managed ETF Gear 1” and
the highest as “American Drive Model Portfolio Actively Managed ETF Gear 5”. Higher
Gears have greater asset allocations to equity securities than fixed income securities.
Risk and volatility are very important among the various investment-related considera-
tions potentially affecting anticipated investment performance. See Item 8,
Methods of
Analysis, Investment Strategies and Risk of Loss, as amended from time to time, for addi-
tional information regarding our investment strategies, practices, and related risk consid-
erations.
Typically, once each year, and in special cases more frequently, the model composition
and allocation weights may be adjusted. Each model targets specific investment alloca-
tions. Rebalancing is important for keeping your intended level of risk consistent as mar-
kets fluctuate and asset classes drift too far from the model’s target. Accordingly, Active
Models will be reviewed, and allocations adjusted annually. Active Models will also be
monitored for drift and rebalanced, as needed, based on both downward and upward drift
from the model’s target allocations. The timing of our rebalancing of an Active Model
may be affected by tax-related considerations for clients as a whole but not with respect
to any specific client’s circumstances. See Item 4,
Advisory Business, for additional infor-
mation.
Separately Managed Accounts (“SMAs”) and Unified Managed Accounts through
Third-Party Money Managers (“Third-Party SMA Managers Program”)
We make available SMAs of several third-party investment managers (“Third-Party SMA
Managers”) through our Third-Party SMA Managers Program. Typically, these Third-
Party SMA Managers are participants in the Schwab Advisor Network platform
(“Schwab Platform”) managed by Charles Schwab & Co (“Schwab”), that also serves as
the client-directed broker-dealer and account custodian. In the future, we may select other
investment advisers participating in our Third-Party SMA Managers Program. We “man-
age the managers” in the Program on a discretionary basis, so we may change participat-
ing Third-Party SMA Managers from time to time.
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Unlike mutual funds or ETFs, when you invest in an SMA, you will own a portfolio of
individual securities under the management of an independent, unaffiliated, third-party
investment adviser who is responsible for the day-to-day investment decisions for your
portfolio. Commonly, Third-Party SMA Managers deliver their investment management
services through their use of model investment portfolios of various types and having
various investment strategies. Each Third-Party SMA Manager is solely responsible for
its own investment decisions, as well as its own actions and omissions.
In providing SMA services, your representative will typically obtain the necessary finan-
cial data from you to assist our Asset Management Team in determining appropriate in-
vestment objectives and selecting one or more Third-Party SMA Managers whose invest-
ment style and talent best fit your individual needs and circumstances. Your representa-
tive will also assist you in opening an SMA account with the Third-Party SMA Manager.
Our Asset Management Team will assist you in selecting a model portfolio of securities
and a suitable Third-Party SMA Manager to provide discretionary asset management
services.
To enhance the speed and efficiency of Third-Party SMA Managers trading, reconcilia-
tion, and related services, we utilize the services of an unaffiliated “Turnkey Asset Man-
agement Platform” (“TAMP”), SmartX Advisory Solutions, LLC, an SEC-registered in-
vestment adviser
(https://adviserinfo.sec.gov/firm/summary/297680). Third-Party SMA
Managers use the TAMP to direct the execution and reconciliation of the trades per-
formed in your SMA. The TAMP will receive Third-Party SMA Manager instructions
(“Model Signals”) periodically as to how your portfolio should be constructed and re-
balanced from time to time. Under our Third-Party SMA services, our Asset Management
Team provides ongoing investment monitoring and advice tailored to your individual
needs and as described below in “
Item 8: Methods of Analysis, Investment Strategies, and
Risk of Loss.”
You should understand that it is both the Third-Party SMA Manager and/or the TAMP
(and not HFSI or your representative) that has authority to purchase and sell specific
securities on a discretionary basis according to the investment objective you choose after
evaluating our recommendations. This authorization will be set out in the SMA and/or
Managed Account client agreement.
When engaging Third-Party SMA Managers made available by Schwab, your agreement
with Schwab and/or the Third-Party SMA Manager gives us the authority to hire or fire
these managers on your behalf. Once a manager is selected, your representative and our
Asset Management Team will continue to monitor their performance, investment strate-
gies, and target allocations to remain aligned with our clients’ investment objectives, risk
tolerance, and overall best interests. From time to time, we may change the Third-Party
SMA Manager with respect to specific investment strategies and, when that occurs, we
will give you notice of the change.
Additionally, we will meet with you, at least annually, to determine whether any changes
in your financial status warrant adjustments to your investment objectives with the third-
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party money manager or whether there should be a change in the manager(s). We will
also be happy to meet with you more frequently, if needed.
If you are interested in learning more about any of these participating Third-Party SMA
Managers services, a complete description of their programs, services, fees, payment
structure, and termination features are found in their respective service disclosure bro-
chures, investment advisory agreements, and account opening documents, all of which
we will provide to you prior to engaging their services.
From time to time, we review other Third-Party SMA Managers, whether or not partici-
pating in the Schwab Advisor Network, and we reserve the right to make different or
additional investment advisers available through our Third-Party SMA Managers Pro-
gram available to our clients as, in our discretion, we deem appropriate and consistent
with our investment strategies.
For accounts benefited from more complex investment strategies, we offer a unified solu-
tion that allows for the consolidation of a wide range of investment portfolios and products,
including SMAs, mutual funds, ETFs and individual securities to be held in a single in-
vestment account. The unified account can hold and report on multiple third-party man-
aged portfolio “sleeves” using investment model delivery along with an advisor-directed
portfolio sleeve. This account type is commonly known in the securities industry as a
“Unified Managed Account” (“UMA”). This “UMA Program” is custodied at Schwab.
The Third-Party SMA Manager’s model delivery cost varies by manager – see Item 5,
Fees and Compensation.