Challenger Wealth Management (hereinafter referred to as "CWM") is an investment advisory firm offering asset management services customized to your individual needs as well as financial planning and asset management services through the selection and ongoing monitoring of a third party advisory service.
A. CWM was formed in May 2002 under the laws of the State of California and became registered as an investment adviser with the State of California in December 2002. Additionally, we are registered in other states when required by those state regulations. Nancy Challenger, CRD number 1377977, is the President, an Advisory Representative and Chief Compliance Officer (CCO). Nancy Challenger has been in the financial services industry since 1985. Additional business information about Nancy Challenger is disclosed on the Supplemental Brochure attached to this brochure.
B. CWM offers the following advisory services, with each service more fully described below:
•Asset Management Services
•Third-Party Management Services
•Financial Planning and Consulting Services. Asset Management Services When CWM completes its analysis of your situation, our Advisory Representative will determine an asset allocation customized to your financial goals, objectives, and risk tolerance. We customize your portfolio allocation taking into consideration your limitations or restrictions, the market and economy at the time, and your financial situation, goals, and objectives. We will schedule a meeting with you and present the recommended portfolio allocation. We will discuss the allocation strategy in detail and if necessary, the recommend portfolio will be adjusted to meet your comfort level as to risk and reward. Once you are comfortable with the allocation and upon your approval, we will implement the initial portfolio allocation. After we implement the initial portfolio allocation, with your written approval as indicated in the Advisory Agreement, we will provide continuous and ongoing management of your account.
CWM offers asset management services on a discretionary basis. We will use our own discretion to determine any changes to the account. We will manage the account and will make changes to the allocation as deemed appropriate by the firm and your Advisory Representative. We will determine the securities to be purchased and sold in the account and will alter the securities holdings from time to time, without prior consultation with you.
Depending on your specific goals and objectives, we will generally hold positions in your account for a long term, even more than a year. Your portfolio may be similarly managed and contain similar holdings as compared to other clients' managed accounts.
Our Advisory Representative primarily uses mutual funds, stocks, bonds, certificates of deposits, government securities, exchange traded funds (ETFs), money markets and some fee-based annuities, as appropriate, based on your goals and objectives.
Transactions in the account, account reallocations, and rebalancing may trigger a taxable event, with the exception of IRA accounts, 403(b) accounts, and other qualified retirement accounts.
4 As further described below, CWM has entered into a relationship to offer you asset management services through the Charles Schwab & Co., Inc. ("Schwab"), a FINRA registered broker-dealer, member SIPC. CWM is independently owned and operated and is not affiliated with Schwab. If you select another brokerage firm for custodial and/or brokerage services, you will not be able to receive asset management services from CWM. Third-Party Management Services We will gather information regarding your investment objectives, goals, time horizon and risk tolerance to assess your suitability for this service. Based on our analysis of your situation, and if appropriate, we may recommend working in conjunction with a third party management service. We offer our clients the services of various third-party investment advisers ("Third-Party Management Services") for the provision of certain investment advisory programs including mutual fund wrap and separately managed account programs. Currently we have a relationship with City National Rochdale (CRD number 117198). If you are interested in learning more about any of these services, please note that a complete description of the programs, services, fees and payment structure, and termination features is available via the applicable Third-Party Management Service's disclosure brochures, investment advisory contracts, and account opening documents which we make sure are provided to you. In connection with these arrangements, we will provide assistance in the selection and ongoing monitoring of a particular Third-Party Management Service. Factors that we consider in the selection of a particular third-party advisor may include but may not be limited to: (1) our assessment of a particular Third-Party Management Service; (2) your risk tolerance, goals, objectives and restrictions, as well as investment experience; and, (3) the assets you have available for investment.
You should know that the services provided by us through the use of Third-Party Management Services are under certain conditions directly offered by them to you. The fees charged by Third-Party Management Services who offer their programs directly to you may be more or less than the combined fees charged by the Third-Party Management Service and us for our participation in the investment programs. CWM will not directly conduct any securities transactions on your behalf or participate directly in the selection of the securities to be purchased or sold for your account. The Third Party Manager will make discretionary investment decisions according to the agreement between you and the Manager. The Third Party Manager will charge you advisory fees according to their fee schedule as disclosed in the Manager's disclosure brochure. Please refer to Item 5, Fees and Compensation, for further information regarding the Third Party Managers.
Sub-Adviser CWM has entered into an agreement with Capital Research and Management Company (CRD number 110885) ("Capital Research") to provide discretionary investment management services for certain client accounts designated by CWM. CWM will gather information regarding your investment objectives, goals, time horizon and risk tolerance. Based on your financial situation, CWM will make a determination regarding the appropriateness and suitability of using a Sub-Adviser's investment Strategy.
CWM will select one or more Strategies and provide the Sub-Adviser with the necessary Client Account Information and notify the Sub-Adviser of any changes thereafter. The Sub-Adviser will have investment discretion regarding the selection of the securities and trading discretion as to what will be purchased or sold for your account. There are account minimums of $100,000 or $250,000 depending 5 on the Strategy selected. The Sub-Adviser will charge their own advisory fee according to their fee schedule. Please refer to item 5, Fees and Compensation for further information regarding the Sub- Adviser. Financial Planning and Consulting Services Our Advisory Representative will schedule a meeting with you to gather financial information and history from you about your retirement and financial goals, investment objectives, investment horizon, financial needs, cash flow analysis, cost-of-living needs, education needs, savings tendencies, and other applicable financial information to provide the planning services you request. CWM will prepare a written financial plan and present the analysis of your situation along with our recommendations for steps to be taken to assist you to work toward your financial goals.
Depending upon your needs, our advice may include topics such as: Financial Planning: We help individuals and families reach goals that require money to achieve, such as having adequate retirement income or resources to cover college expenses. We will prepare a written plan for you to help achieve your desired standard of living and meet financial goals in a timely and orderly fashion. Our analysis will be based upon the information provided to us by you and our independent research. Retirement Income Planning: We will prepare a detailed financial plan, including generic investment recommendations, dealing with your financial concerns relating to retirement. Our analysis will be based upon the information provided to us by you and our independent research. Estate Planning: Estate planning concerns the transfer of assets both during life and after death. In general, the primary emphasis in estate planning is on (1) minimizing the costs associated with those transfers, (2) determining the optimal disposition and subsequent management of the transferred assets, and (3) ensuring that the estate has sufficient sources of liquid assets to satisfy its obligations.
We will review your Wills, Trusts and other documents that have been drafted, analyzing liquidity, reviewing property ownership, reviewing Federal Estate Taxes and State Inheritance Taxes and planning strategies for their avoidance. Our analysis will be based upon the information provided to us by you and our independent research. Executive Benefit Analysis: We will prepare a detailed analysis, including generic investment recommendations, of the fringe benefits offered by the Client, if the Client acts as an employer, or received by the Client, if the Client acts as an employee. Our analysis will be based upon the information provided by you and our independent research. Education Planning: We will prepare a detailed financial plan, including generic investment recommendations, relating to the funding of educational expenses for you or your children or other dependents. Our analysis will be based upon the information provided to us by you and our independent research. Portfolio Analysis: We will review and assess the elements of your entire portfolio of securities. The review is done for careful analysis of risk and return. Portfolio Analysis conducted at regular intervals helps to make changes in the portfolio allocation and change the portfolio according to the changing market and 6 different circumstances. The analysis also helps in proper resource/asset allocation to different elements in the portfolio. Our analysis will be based upon the information provided to us by you and our independent research. Investment Analysis: We will evaluate the investments in your portfolio for profitability and risk with the purpose of measuring how the given investment is a good fit for your portfolio. Our analysis will be based upon the information provided to us by you and our independent research. Budgeting and Cash Flow Analysis: We will prepare a detailed budget and cash flow analysis for you. Our analysis will be based upon the information provided by you and our independent research. Investment Tax Analysis: We will evaluate the investments in your portfolio from a tax perspective. The purpose is to ensure tax efficiency. Our analysis will be based upon the information provided by you and our independent research. Individual Qualified Plan Account Advice: We will prepare a detailed analysis, including generic investment recommendations, of your employer sponsored retirement program. Our analysis will be based upon the information provided by you and our independent research. General Planning Information The Plan is based on your financial situation at the time and on the financial information you disclosed to our Advisory Representative. You need to be aware that certain assumptions may be made with respect to interest and inflation rates as well as the use of past trends and performance of the market and economy. However, past performance is no indication of future performance. CWM cannot offer any guarantees or promises that your financial goals and objectives will be met. Further, you must continue to review the plan and update the plan based on changes

in your financial situation, goals, or objectives or changes in the economy. If your financial situation or investment goals or objectives change, you must notify CWM promptly of the changes. You are advised that the advice offered by CWM may be limited and is not meant to be comprehensive. Based on your specific needs or situation, you may need to seek the services of other professionals such as an insurance adviser, attorney and/or accountant.
You are under no obligation to act on the investment adviser's or associated person's recommendations. Moreover, if you elect to act on any of the recommendations, you are under no obligation to effect the transaction through the investment adviser or the associated person when such person is employed as an agent with a licensed broker dealer or is licensed as a broker dealer or through any associated or affiliate of such a person.
You always have the right to decide whether to implement planning advice through CWM or our Advisory Representative. If you do choose to implement the plan with us, and if we recommend you purchase insurance, we will receive insurance commissions or asset-based compensation in addition to the advisory fee you paid for the planning services. (Please see Item 10 below for more information.) Excluding our direct American Funds accounts, for client assets that are held outside of Schwab ("outside accounts"), CWM may provide periodic investment advice. These outside assets may be held at mutual fund companies, variable annuity companies, other brokerage firms, and employer sponsored retirement plans such as 401(k) accounts. These outside assets are not held with our primary custodians, Schwab, and CWM will not implement any investment recommendations. CWM 7 will review the outside account(s) and provide asset allocation and portfolio monitoring services. After the initial asset allocation recommendations, we will monitor the account(s) on a periodic basis, typically once a year, and provide rebalancing and/or reallocation suggestions. The client is responsible for making (or not making) changes to the account(s). Be aware that partial implementation or delayed implementation may have an impact on the performance of the account. Because CWM may not have access to your outside assets, you will be responsible for providing CWM with copies or duplicate statements.
C. CWM tailors the advisory services we offer to your individual needs. You may impose restrictions and/or limitations on the investing in certain securities or types of securities. We will ask you to complete a data-gathering questionnaire to assist us with obtaining information about your financial situation and history. Additionally, our Advisory Representative will meet with you and conduct an interview and data-gathering session to continue the due-diligence process. The information gathered by CWM will assist the firm in providing you with the requested services and customize the services to your financial situation. Depending on the services you have requested, we will gather various financial information and history from you including, but not limited to:
•Retirement and financial goals
•Investment objectives
•Investment horizon
•Existing portfolio statements, including retirement account information
•Financial needs
•Tax bracket information
•Cash flow analysis
•Cost-of-living needs
•Savings tendencies
•Other applicable financial information required by our Advisory Representative to provide the investment advisory services you have requested. D. CWM does not participate in any wrap fee programs by providing portfolio management services. However, when appropriate, we will recommend the services of AssetMark, Inc., City National Rochdale or other third party manager which may offer a wrap fee program. A wrap fee program generally involves an investment account where you are charged a single, bundled, or "wrap" fee for investment advice, brokerage services, administrative expenses, and other fees and expenses.
E. As of December 31, 2023, we have $175,794,101 discretionary client assets under management and $1,470,900 non-discretionary assets under management. Additionally, we provide investment advice on an additional $83.1 million of assets under advisement that are directly managed by the third party money manager. These assets are not considered CWM's regulatory assets under management since they are managed by AssetMark, Inc. and City National Rochdale.
General Information The investment recommendations and advice offered by CWM are not legal, accounting, or tax advice. You should coordinate and discuss the impact of financial advice with your attorney and/or accountant. Our primary goal is to help our clients identify and pursue their financial goals, thereby enhancing the overall quality of their lives.
While our firm endeavors at all times to offer clients specialized services at reasonable costs, the fees charged by other investments advisers for comparable services may be lower than the fees charged by our firm.
8 IRA Rollover Recommendations Effective December 20, 2021 (or such later date as the US Department of Labor ("DOL") Field Assistance Bulletin 2018-02 ceases to be in effect), for purposes of complying with the DOL's Prohibited Transaction Exemption 2020-02 ("PTE 2020-02") where applicable, we are providing the following acknowledgment to you. When we provide investment advice to you regarding your retirement plan account or individual retirement 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 interest ahead of yours. 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. We benefit financially from the rollover of your assets from a retirement account to an account that we manage or provide investment advice, because the assets increase our assets under management and, in turn, our advisory fees. As a fiduciary, we only recommend a rollover when we believe it is in your best interest.
IRA Rollover Considerations As part of our financial planning and advisory services, we may provide you with recommendations and advice concerning your employer retirement plan or other qualified retirement account. We may recommend that you withdraw the assets from your employer's retirement plan or other qualified retirement account and roll the assets over to an individual retirement account ("IRA") to be managed by us or a Third-Party Manager that we recommend. If you elect to roll the assets to an IRA under our management or Third-Party Managed Program, we will charge you an asset-based fee as described in Item 5. This practice presents a conflict of interest because our investment advisory representatives have an incentive to recommend a rollover to you for the purpose of generating fee-based compensation rather than solely based on your needs. You are under no obligation, contractually or otherwise, to complete the rollover. Furthermore, if you do complete the rollover, you are under no obligation to have your IRA assets managed by us or under our Third-Party Managed Program.
Employers may permit former employees to keep their retirement assets in their company plan. Also, current employees can sometimes move assets out of their company plan before they retire or change jobs. In determining whether to complete the rollover to an IRA, and to the extent the following options are available, you should consider the costs and benefits of each.
An employee will typically have four options: 1. Leave the funds in your employer's (former employer's) plan.
2. Roll over the funds to a new employer's retirement plan.
3. Cash out and take a taxable distribution from the plan.
4. Roll the funds into an IRA rollover account.
Each of these options has advantages and disadvantages. Before making a change, we encourage you to speak with your financial advisor, CPA, and/or tax attorney.
9 Before rolling over your retirement funds to an IRA for us to manage or under our Third-Party Managed Program, carefully consider the following. NOTE: This list is not exhaustive.
1. Determine whether the investment options in your employer's retirement plan address your needs or whether other types of investments are needed.
a. Employer retirement plans generally have a more limited investment menu than IRAs.
b. Employer retirement plans may have unique investment options not available to the public, such as employer securities or previously closed funds.
2. Your current plan may have lower fees than our fee and the Third-Party Manager's fee combined.
a. If you are interested in investing only in mutual funds, you should understand the cost structure of the share classes available in your employer's retirement plan and how the costs of those share classes compare with those available in an IRA.
b. You should understand the various products and services available through an IRA provider and their potential costs.
c. It is likely you will not be charged a management fee and will not receive ongoing asset management services unless you elect to have such services. If your plan offers management services, there may be a fee associated with the service that is more or less than our fee and the Third-Party Manager's fee combined.
3. Our strategy and/or the Third-Party Manager's strategy may have higher risk than the options provided to you in your plan.
4. Your current plan may offer financial advice, guidance, management, and/or portfolio options at no additional cost.
5. If you keep your assets titled in a 401(k) or retirement account, and you are still working, you could potentially delay your required minimum distribution beyond age 73.
6. Your 401(k) may offer more liability protection than a rollover IRA; each state may vary. Generally, Federal law protects assets in qualified plans from creditors. Since 2005, IRA assets have been generally protected from creditors in bankruptcies; however, there can be exceptions. Consult an attorney if you are concerned about protecting your retirement plan assets from creditors.
7. You may be able to take out a loan on your 401(k), but not from an IRA.
8. IRA assets can be accessed any time; however, prior to age 59 ½ distributions are subject to ordinary income tax and may also be subject to a 10% early distribution penalty unless they qualify for an exception such as disability, higher education expenses, or a home purchase.
9. If you own company stock in your plan, you may be able to liquidate those shares at a lower capital gains tax rate.
10. Your plan may allow you to hire us as the manager and keep the assets titled in the plan name.
It is important that you understand your options, their features and their differences, and decide whether a rollover is best for you. If you have questions, contact us at our main number listed on the cover page of this brochure. As an investment adviser registered under applicable federal and state securities laws, CWM owes the client a fiduciary duty to put the Client's interest first which includes, but is not limited to, a duty of care, loyalty, obedience, and utmost good faith.