Source: http://docplayer.net/10270014-Form-adv-part-2a-disclosure-brochure.html
Timestamp: 2018-10-15 23:16:52
Document Index: 136217801

Matched Legal Cases: ['art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 1', 'art 2', 'art 1', 'art 2', 'art 1', 'art 1', 'art 1', 'art 2', 'art 1']

Scarlett Bates
1 Form ADV Part 2A Disclosure Brochure Effective: June 1, 2015 This Disclosure Brochure provides information about the qualifications and business practices of Connecticut Wealth Management, LLC ( CTWM ). If you have any questions about the contents of this Disclosure Brochure, please contact Monique Tardif, CTWM s Compliance Manager, at (860) CTWM is a Registered Investment Advisor ( Advisor ) with the United States Securities and Exchange Commission. The information in this Disclosure Brochure has not been approved or verified by the U.S. Securities and Exchange Commission ( SEC ) or by any state securities authority. Registration of an Investment Advisor does not imply any specific level of skill or training. Additional information about CTWM and its advisory persons are available on the SEC s website at Connecticut Wealth Management, LLC 281 Farmington Avenue Farmington, CT Phone: (860) * Fax: (860) CRD No:
2 Item 2 Material Changes Form ADV 2 is divided into two parts: Part 2A and Part 2B. Part 2A ( Disclosure Brochure ) provides information about a variety of topics relating to an Advisor s business practices and conflicts of interest. Part 2B ( Brochure Supplement ) provides individual information about the Advisors of CTWM. CTWM believes that communication and transparency are the foundation of our relationships and we continually strive to provide our Clients with complete and accurate information at all times. CTWM encourages all current and prospective Clients to read this Disclosure Brochure and discuss any questions you may have with us. And of course, we always welcome your feedback. Material Changes Material change since the last annual amendment of April 9, 2015: We have updated our fee schedule for investment management services to: Assets Under Management Annual Rate $1,000,000 to $2,500, % $2,500,001 to $5,000, % $5,000,001 to $10,000, % $10,000,001 and $15,000, % $15,000, % * Minimum account size is $1,000,000 Future Changes From time to time, we may amend this Disclosure Brochure to reflect changes in our business practices, changes in regulations and routine annual updates as required by securities regulators. A Summary of Material Changes shall be provided to each Client annually. At any time, you may view the current Disclosure Brochure on line at the SEC s Investment Adviser Public Disclosure website at To review information about CTWM: Click Investment Advisor Search in the left navigation menu. Select the option for Firm and enter (our firm s CRD number) in the field labeled: Firm IARD or CRD# or SEC#. This will provide access to Form ADV Part 1 and Part 2. Item 11 of the ADV Part 1 lists legal and disciplinary questions regarding the Advisor. In the left navigation menu, Form ADV Part 2 is located near the bottom. You may download a copy of this Disclosure Brochure on our website at or you may request a copy by contacting Monique Tardif, CTWM s Compliance Manager, at (860)
3 Item 3 Table of Contents Item 1 Cover Page... 1 Item 2 Material Changes... 2 Item 3 Table of Contents... 3 Item 4 Advisory Services... 4 A. Firm Information... 4 B. Advisory Services Offered... 4 C. Individual Client Account Management... 5 D. Wrap Fee Programs... 5 E. Assets Under Management... 5 Item 5 Fees and Compensation... 5 A. Fees for Advisory Services... 5 B. Fee Billing... 6 C. Other Fees and Expenses... 6 D. Advance Payment of Fees and Termination... 7 E. Compensation for Sales of Securities... 7 Item 6 Performance Based Fees and Side By Side Management... 7 Item 7 Types of Clients... 7 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss... 7 A. Methods of Analysis... 7 B. Risk of Loss... 8 Item 9 Disciplinary Information... 8 Item 10 Other Financial Industry Activities and Affiliations... 9 Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading... 9 A. Code of Ethics... 9 B. Personal Trading with Material Interest C. Personal Trading in Same Securities as Clients D. Personal Trading at Same Time as Client Item 12 Brokerage Practices A. Recommendation of Custodian[s] B. Aggregating and Allocating Trades Item 13 Review of Accounts A. Frequency of Reviews B. Causes for Reviews C. Review Reports Item 14 Client Referrals and Other Compensation A. Compensation Received by CTWM B. Client Referrals from Solicitors Item 15 Custody Item 16 Investment Discretion Item 17 Voting Client Securities Item 18 Financial Information... 13
4 Item 4 Advisory Services A. Firm Information Connecticut Wealth Management, LLC ( CTWM or the Advisor ) is a Registered Investment Advisor with the Securities and Exchange Commission, which is organized as a Limited Liability Company (LLC) under the laws of the State of Connecticut. CTWM began operations on October 1, 2010, and is owned and operated by Kevin Leahy (CEO and Managing Member), Denis Horrigan (Member) and Michael Tedone (Member). This Disclosure Brochure provides information regarding the qualifications, business practices, and the advisory services provided by CTWM. B. Advisory Services CTWM offers financial planning and investment advisory services to individuals, trusts, estates, non profit organizations, business owners, businesses and executives (each referred to as a Client ) in Connecticut and other states. Financial Planning and Consulting Services CTWM will typically provide a variety of financial planning services to individuals and families, pursuant to a written Financial Planning or Consulting Agreement. Typically a financial plan will be comprehensive in nature, including all major aspects of a Client s financial situation. Generally, such financial planning services will involve investment planning, retirement planning, personal savings, education savings, income tax planning, estate tax planning, cash flow analysis, and risk management including death, disability and long term care needs analysis. A financial plan provided to the Client will usually include general and/or specific recommendations for a course of action to be taken by the Client. For example, recommendations may be made that the Client start or revise their investment programs, commence or alter retirement savings, establish education savings and/or charitable giving programs. CTWM may also refer Clients to an accountant, insurance consultant, attorney or other specialist, as appropriate for their unique situation. For comprehensive financial planning engagements, the Advisor will provide a written summary of the Client s financial situation, observations, and recommendations. For consulting or ad hoc engagements, the Advisor may not provide a written summary. Plans or consultations are typically completed within ninety days of the contract date, assuming all information and documents requested from the client are promptly provided. Financial planning and consulting recommendations may pose a potential conflict between the interests of the Advisor and the interests of the Client. Clients are not obligated to implement any recommendations made by the Advisor or maintain an ongoing relationship with the Advisor. If the Client elects to act on any of the recommendations made by the Advisor, the Client is under no obligation to effect the transaction through the Advisor. Investment Management Services CTWM provides customized investment advisory solutions for its Clients. This is achieved through continuous personal Client contact and interaction while providing discretionary or non discretionary investment management and consulting services. CTWM works with each Client to identify their investment goals and objectives, as well as risk tolerance and financial situation, in order to create a portfolio allocation. CTWM constructs a portfolio, typically consisting of no load mutual funds and/or exchange traded funds ( ETFs ) to achieve the Client s investment goals. The Advisor may also utilize individual stocks, bonds, certificates of deposits, and alternative investments to meet the needs of its Clients. CTWM s investment strategy is primarily long term focused, but the Advisor may buy, sell or re allocate positions that have been held less than one year to meet the objectives of the Client or due to market conditions. CTWM constructs, implements and monitors the portfolio to ensure it meets the goals, objectives, circumstances, and risk tolerance agreed to by the Client. CTWM evaluates and selects investment vehicles for inclusion in Client portfolios only after applying their internal due diligence process. CTWM may recommend, on occasion, redistributing investment allocations to diversify the portfolio. CTWM may recommend specific positions to increase sector or asset class weightings. The Advisor may recommend employing cash positions as a possible hedge against market movement, which may adversely affect the portfolio. 4 P age
5 CTWM may recommend selling positions for reasons that include, but are not limited to, harvesting capital gains or losses, business or sector risk exposure to a specific security or class of securities, overvaluation or overweighting of the position[s] in the portfolio, change in risk tolerance of Client, generating cash to meet Client needs, changes in Client circumstances or any risk deemed unacceptable for the Client s risk tolerance. Prior to rendering investment advisory services, CTWM will ascertain, in conjunction with the Client, the Client s financial situation, risk tolerance, and investment objective[s]. CTWM will provide investment advisory services and portfolio management services and generally will not custody securities or provide other administrative services. CTWM generally does not accept or maintain custody of a Client s funds or securities, except for the authorized deduction of the Advisor s fees. In certain instances the Advisor may also serve as a trustee for a Client s account. As a result, the Advisor may be deemed to have custody of those Client assets due to its authority to obtain possession and/or direct the movement of the assets. Trustee services provided by the Advisor will be captured in a separate Trustee client agreement. All Client assets will be managed within their designated account(s), pursuant to the Client Investment Advisory Agreement. C. Individual Client Account Management Prior to engaging CTWM to provide investment advisory services, each Client is required to enter into an Investment Advisory Agreement with the Advisor that defines the terms, conditions, authority and responsibilities of the Advisor and the Client. These services may include: Establishing Investment Policy CTWM, in connection with the Client, will ascertain the Client s investment goals and objectives to develop the broad strategy [ies] to be employed to meet the objectives. Asset Allocation CTWM will develop a strategic asset allocation that is targeted to meet the investment objectives, time horizon, financial situation and tolerance for risk for each Client. Portfolio Construction CTWM will develop a portfolio for the Client that is intended to meet the stated goals and objectives of the Client. Investment Management and Supervision CTWM will provide investment management and ongoing oversight of the Client s portfolio and overall account. D. Wrap Fee Programs CTWM does not manage a wrap fee program. Investment management services are typically provided directly by CTWM. At times, certain Clients may be invested in a wrap fee program offered by LPL Financial ( LPL ). The details of this wrap fee program are provided in the wrap program brochure provided by LPL. E. Assets Under Management As of March 27, 2015 CTWM manages $477,435,309 in discretionary assets and $7,984,818 in non discretionary assets. Total assets under management are $485,420,127. Clients may request more current information at any time by contacting Monique Tardif, CTWM s Compliance Manager, at (860) Item 5 Fees and Compensation The following paragraphs detail the fee structure and compensation methodology for investment management. Each Client shall sign an Investment Advisory Agreement that details the responsibilities of CTWM and the Client. A. Fees for Advisory Services Financial Planning and Consulting Services CTWM offers financial planning or consulting services on a fixed fee basis ranging from $4,000 to $10,000, which may be negotiable depending on the nature and complexity of each Client s circumstances. The Advisor s fee is exclusive of, and in addition to, Custodian fees, transaction fees, and other related costs and expenses associated with implementing the plan, which may be incurred by the Client. However, the Advisor shall not receive any portion of these additional fees and costs. The fixed fee is determined after considering many factors, such as the level and scope of the services. 5 P age
6 Investment Management Services Investment Advisory Fees are paid quarterly in advance pursuant to the terms of the Investment Advisory Agreement. Investment Advisory Fees are based on the market value of assets under management at the end of each calendar quarter. Adjustments may be made for any deposits or withdrawals made during the quarter to ensure clients are only being charged for assets which have resided in their account over time. Investment Advisory Fees in the first quarter of service are prorated to the inception date of the account to the end of the first quarter. Fees may be negotiable at the discretion of the Advisor. The Client s fees will take into consideration the aggregate assets under management with Advisor. Certain Clients may be charged a fee that differs from the fees above. All securities held in accounts managed by CTWM will be independently valued by the designated Custodian. CTWM will not have the authority or responsibility to value portfolio securities. Investment Advisory Fees typically range from 1.10% to 0.50% based on the following schedule: B. Fee Billing Assets Under Management Annual Rate $1,000,000 to $2,500, % $2,500,001 to $5,000, % $5,000,001 to $10,000, % $10,000,001 and $15,000, % $15,000, % * Minimum account size is $1,000,000 (See Item 7). Financial Planning and Consulting Services The Advisor s fee for Financial Planning and Consulting Services is billed by CTWM. Typically, half of the total engagement fee is due at the time the Financial Planning Engagement Letter is signed by the client and prior to the start of the engagement. The balance is due at the conclusion of the planning engagement. On a case by case basis, the terms of payment may be different at the discretion of the advisor and as agreed upon by both parties. Investment Management Services Investment Advisory Fees will be automatically deducted from the Client Account by the Custodian. The amount due is calculated by the Custodian by applying the quarterly rate (annual rate divided by 4) to the total assets under management with CTWM at the end of each prior quarter. Clients will be provided with a statement, at least quarterly, from the Custodian reflecting the deduction of the Investment Advisory Fee. It is the responsibility of the Client to verify the accuracy of these fees as listed on the Custodian s account statement as the Custodian does not assume this responsibility. Clients provide written authorization permitting CTWM to be paid directly from their accounts held by the Custodian as part of the Investment Advisory Agreement and separate account forms provided by the Custodian. C. Other Fees and Expenses Clients may incur certain fees or charges imposed by third parties, other than CTWM, in connection with investments made on behalf of the Client s account[s]. The Client is responsible for all custodial and securities execution fees charged by the Custodian. The Investment Advisory Fee charged by CTWM is separate and distinct from these Custodian and execution fees. In addition, all fees paid to CTWM for investment advisory services are separate and distinct from the expenses charged by mutual funds and exchange traded funds to their shareholders, if applicable. These fees and expenses are described in each fund s prospectus. These fees and expenses will generally be used to pay management fees for the funds, other fund expenses, account administration (e.g., custody and account reporting), and a possible distribution fee. A Client could invest in these products directly, without the services of CTWM, but would not receive the services provided by CTWM which are designed to assist the Client in determining which products or services are most appropriate to each Client s financial situation and objectives. 6 P age
7 Accordingly, the Client should review both the fees charged by the fund[s] and the fees charged by CTWM to fully understand the total fees to be paid. D. Advance Payment of Fees and Termination Financial Planning and Consulting Services The Client may terminate the agreement within five (5) days of signing the Advisor s financial planning or consulting agreement, in which case the Client will not incur any fees. After the five day period, either party may terminate a planning or consulting agreement at any time by contacting the other party. The Client will incur charges for bona fide advisory services rendered to the point of termination and such fees will be due and payable by the Client. Refunds will be given on a pro rata basis. Investment Management Services CTWM is compensated for its services in advance of the quarter in which investment advisory services are rendered. Clients terminating their Investment Advisory Agreement with CTWM, in whole or in part shall be responsible for Investment Advisory Fees up to and including the effective date of termination. Upon termination, the Advisor will refund any unearned, prepaid Investment Advisory Fees from the effective date of termination to the end of the quarter. The Client s Investment Advisory Agreement with the Advisor is non transferable without the Client s written approval. E. Compensation for Sales of Securities CTWM does not receive any compensation for securities transactions in any Client account other than the Investment Advisory Fees noted above. Item 6 Performance Based Fees and Side By Side Management CTWM does not charge performance based fees for its investment advisory services. The fees charged by CTWM are as described in Item 5 Fees and Compensation and are not based upon the capital appreciation of the funds or securities held by any Client. CTWM does not manage any proprietary investment funds or limited partnerships (for example, a mutual fund or a hedge fund) and has no financial incentive to recommend any particular investment option to its Clients. Item 7 Types of Clients CTWM provides investment advisory services to the following types of Clients: Individuals, Personal Trusts and Estates private investors investing their personal assets Businesses and Not For Profit Organizations business entities investing cash reserves and endowments The relative percentage for each type of Client is available on CTWM s Form ADV Part 1. These percentages will change over time. CTWM generally requires a minimum household size of $1,000,000 to effectively implement its investment process. CTWM may reduce this household minimum at its sole discretion. Item 8 Methods of Analysis, Investment Strategies and Risk of Loss A. Methods of Analysis CTWM primarily employs fundamental analysis methods in developing investment strategies for its Clients. Research and analysis from CTWM is derived from numerous sources, including third party research materials, financial media companies, Internet sources, and review of company activities, including annual reports, prospectuses, press releases and research prepared by others. 7 P age
8 CTWM uses asset allocation strategy in managing clients assets. Asset allocation helps drive the balance between risk and reward and it is important because, when investing in multiple asset classes, a portfolio may perform more consistently over time potentially minimizing the risk of underperformance. Market conditions that can help one asset class to perform well may cause another to have average or poor returns over the same time period. A portfolio consisting of a diversified group of investments may be able to limit a client s losses and reduce the fluctuations of investment returns without sacrificing potential gain. As noted, CTWM generally employs a long term investment strategy for our Clients consistent with their financial goals. CTWM will typically hold all or a portion of a security for more than a year, but may hold them for shorter periods for the purpose of rebalancing a portfolio or meeting the cash needs of Clients. At times, CTWM may also buy and sell positions that are more short term in nature, depending on the goals of the Client and/or the fundamentals of the security, sector or asset class. B. Risk of Loss Investing in securities involves certain investment risks. Securities may fluctuate in value or lose value. Clients should be prepared to bear the potential risk of loss. CTWM will assist Clients in determining an appropriate strategy based on their tolerance for risk and other factors previously noted. However, there is no guarantee that a Client will meet their investment goals. Fundamental analysis utilizes economic and business indicators as investment selection criteria. While this type of analysis helps the Advisor in evaluating a potential investment, it does not guarantee that the investment will increase in value. Assets meeting the investment criteria utilized in the fundamental analysis may lose value and may have negative investment performance. The Advisor monitors these economic indicators to determine if adjustments to strategic allocations are appropriate. More details on the Advisor s review process are included in Item 13. Asset allocation helps drive the balance between risk and reward and it is important because, when investing in multiple asset classes, a portfolio may perform more consistently over time potentially minimizing the risk of underperformance. While asset allocation may help reduce risk, it does not eliminate risk. All investments involve some degree of risk. Each Client relationship will include a review of the Client's investment goals, financial situation, time horizon, tolerance for risk and other factors to develop an appropriate strategy for managing a Client's portfolio. Client participation in this process, including full and accurate disclosure of requested information, is essential for the analysis of a Client's portfolio. The Advisor shall rely on all information provided by the Client or their designees without the duty or obligation to validate the accuracy and completeness of the provided information. It is the responsibility of the Client to inform the Advisor of any changes in financial condition, goals or other factors that may affect this analysis. The risks associated with a particular strategy are provided to each Client in advance of investing. The Advisor will work with each Client to determine their tolerance for risk as part of the portfolio construction process. Past performance is not a guarantee of future returns. Investing in securities and other investments involves a risk of loss that each Client should understand and be willing to bear. Clients are reminded to discuss these risks with an Advisor. For more information on our investment management services, please contact Monique Tardif, CTWM s Compliance Manager, at (860) Item 9 Disciplinary Information There are no legal, regulatory or disciplinary events involving CTWM or any of its employees. CTWM and its advisory personnel value the trust you place in us. As we advise all Clients, we encourage you to perform due diligence on any advisor or service provider with whom you partner. 8 P age
9 CTWM background information is located on the Investment Adviser Public Disclosure website at To review information on CTWM contained in ADV Part 1: Select the option for Investment Advisor Firm and enter (our firm s CRD number) in the field labeled: Firm IARD or CRD# or SEC#. This will provide access to Form ADV Part 1 and Part 2. Item 11 of the ADV Part 1 lists legal and disciplinary questions regarding the Advisor. You may also research the background of CTWM s Advisors on this site. Item 10 Other Financial Industry Activities and Affiliations Broker Dealer Kevin C. Leahy is a Registered Representative of LPL of Boston, Massachusetts. LPL is a registered broker dealer (CRD No. 6413), member FINRA, SIPC. In his separate capacity as a Registered Representative, Kevin C. Leahy may receive commissions for the implementation of recommendations for commissionable transactions. Clients are not obligated to implement any recommendations provided by Kevin C. Leahy in his role as a Registered Representative. As a Registered Representative of LPL, Kevin C. Leahy may receive 12b 1 distributions from investment companies in connection with the placement of client funds into investment companies. Kevin C. Leahy will not earn investment advisory fees in connection with any services implemented in his separate capacity as a Registered Representative where commissions are earned. Also, as a result of this relationship, LPL may have access to certain confidential information (e.g., financial information, investment objectives, transactions and holdings) about CTWM s clients. If you would like a copy of LPL s privacy policy, please contact Monique Tardif, CTWM s Compliance Manager, at (860) Generally, recommendations made by Kevin C. Leahy to his Clients are made in his role as an Investment Advisor Representative of CTWM, not in his role as a Registered Representative of LPL. In no circumstances will CTWM earn an advisory fee and a commission on the same investment. Clients should be aware that the receipt of additional compensation creates a conflict of interest when making recommendations. Insurance Agency Affiliations Kevin C. Leahy may serve as a sales agent for various insurance companies. This activity is done separate and apart from his role with CTWM. As an insurance agent, Kevin C. Leahy may receive customary commissions and other related revenues from the various insurance companies whose products are sold. Commissions generated by insurance sales do not offset regular advisory fees. This may cause a conflict of interest in recommending certain products of the insurance companies. Clients are under no obligation to implement any recommendations made by Kevin C. Leahy. While the firm is licensed to sell insurance, it is not recommended and implemented by Kevin C. Leahy for all clients. Revenue from insurance commissions is not material to the advisor s total revenue. Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading A. Code of Ethics CTWM has implemented a Code of Ethics that defines our fiduciary commitment to our Client(s). This Code of Ethics applies to all persons associated with CTWM. The Code of Ethics was developed to provide general ethical guidelines and specific instructions regarding our duties to you, our Client. CTWM and our personnel owe a duty of loyalty, fairness and good faith towards each Client. It is the obligation of CTWM associates to adhere not only to the specific provisions of the Code, but also to the general principles that guide the Code. 9 P age
10 The Code of Ethics covers a range of topics that may address employee ethics and conflicts of interest. To request a copy of our Code of Ethics, please contact Monique Tardif, CTWM s Compliance Manager, at (860) B. Personal Trading with Material Interest CTWM allows our employees to purchase or sell the same securities that may be recommended to and purchased on behalf of Clients. CTWM does not act as principal in any transactions. In addition, the Advisor does not act as the general partner of a fund, or advise an investment company. CTWM does not have a material interest in any securities traded in Client accounts. C. Personal Trading in Same Securities as Clients CTWM allows our employees to purchase or sell the same securities that may be recommended to and purchased on behalf of Clients. Owning the same securities we recommend (purchase or sell) to you presents a potential conflict of interest that, as fiduciaries, we must disclose to you and mitigate through policies and procedures. As noted above, we have adopted, consistent with Section 204A of the Investment Advisers Act of 1940, a Code of Ethics, which addresses insider trading (material non public information controls) and personal securities reporting procedures. When trading for personal accounts, employees of CTWM may have a conflict of interest if trading in the same securities. The fiduciary duty to act in the best interest of its Clients can potentially be violated if personal trades are made with more advantageous terms than Client trades, or by trading based on material non public information. This risk is mitigated by CTWM requiring reporting of personal securities trades by its employees for review by the employee s supervisor or the CCO. We have also adopted written policies and procedures to detect the misuse of material, non public information. We may have an interest or position in certain securities, which may also be recommended to you. In addition, the Code of Ethics governs Gifts and Entertainment given by and provided to the Advisor, outside employment activities of employees, employee reporting, sanctions for violations of the Code of Ethics, and records retention requirements for various aspects of the Code of Ethics. D. Personal Trading at Same Time as Client While CTWM allows our employees to purchase or sell the same securities that may be recommended to and purchased on behalf of Clients, such trades are typically aggregated with Client orders or traded afterwards. CTWM will place trades only after Client orders have been placed and filled. At no time will CTWM or any associated person of CTWM, transact in any security to the detriment of any Client. Item 12 Brokerage Practices A. Recommendation of Custodian[s] CTWM recommends the Custodian for custodial and execution services or the administrator for defined contribution accounts. CTWM recommends the Custodian to safeguard Client assets and the Client authorizes CTWM to direct trades to this Custodian as agreed upon in the Investment Advisory Agreement. Further, CTWM does not have the discretionary authority to negotiate commissions on behalf of our Clients on a trade by trade basis. CTWM recommends to Clients that they establish their custodial account[s] at LPL, LLC ( LPL ). LPL is an independent and unaffiliated SEC registered broker dealer and FINRA member. LPL offers independent investment Advisors services, which include custody of securities, trade executions, clearance and settlement of transactions. CTWM receives some benefits from LPL as a result of this relationship. CTWM considers a number of factors in selecting and/or recommending Custodians for its Clients accounts, including, but not limited to, execution capability, experience, financial stability and reputation. 10 P age
11 CTWM has received a loan from LPL in order to assist CTWM with transitioning its business onto the LPL custodial platform. This loan may be forgiven by LPL based on the scope of business CTWM engages in with LPL, including the amount of CTWM s client assets with LPL. This presents a conflict of interest in that CTWM has a financial incentive to recommend that you maintain your account with LPL in order to benefit by having the loan forgiven. However, to the extent CTWM recommends clients use LPL for custodial services, it is because CTWM believes that it is in the client s best interest to do so based on the quality and pricing of the execution, capabilities, benefits of the custodial platform and other services provided by LPL. The following are additional details regarding the brokerage practices of CTWM: Soft Dollars Soft dollars are revenue programs offered by broker dealers whereby an advisor enters into an agreement to place security trades with the broker in exchange for research and other services. CTWM does not participate in soft dollar programs sponsored or offered by any broker dealer. Brokerage Referrals CTWM does not receive compensation from any third party in connection with the recommendation for establishing a brokerage account. Directed Brokerage All Clients are serviced on a directed brokerage basis, where CTWM places trades within the established account[s] at the Custodian designated by the Client. Further, all Client accounts are traded within their respective brokerage account[s]. The Advisor will not engage in any principal transactions (i.e., trade of any security from or to the Advisor s own account) or cross transactions with other Client accounts (i.e., purchase of a security into one Client account from another Client s account[s]). In selecting the Custodian, CTWM will not be obligated to select competitive bids on securities transactions and does not have an obligation to seek the lowest available transaction costs. These costs are determined by the designated Custodian. B. Aggregating and Allocating Trades The primary objective in placing brokerage orders for the purchase and sale of securities for Client accounts is to obtain the most favorable net results taking into account such factors as: Price Size of order Difficulty of execution Confidentiality CTWM will execute its transactions through an unaffiliated broker dealer approved by the Client. CTWM may aggregate orders in a block trade or trades when securities are purchased or sold through the same broker dealer for multiple (discretionary) accounts. If a block trade cannot be executed in full at the same price or time, the securities actually purchased or sold by the close of each business day must be allocated in a manner that is consistent with the initial preallocation or other written statement. This must be done in a way that does not consistently advantage or disadvantage particular Client accounts. Item 13 Review of Accounts A. Frequency of Reviews Accounts are monitored on a regular and continuous basis by a team of Advisors. Formal reviews are generally conducted three times per calendar year but may be conducted more or less frequently at the discretion of the Advisor or depending on the needs of the Client and market conditions. B. Causes for Reviews Accounts may be reviewed as a result of major changes in economic conditions triggered by material market, economic or political events. Known changes in the Client s financial situation, and/or large deposits or withdrawals in the Client s account may also require additional reviews. The Client is encouraged to notify CTWM if changes occur in his/her personal financial situation that might adversely affect his/her investment plan. 11 P age
12 C. Review Reports The Client will receive statements no less than quarterly from the Custodian. These statements are sent directly from the Custodian to the Client. The Client may also establish electronic access to the Custodian s website so that the Client may view these reports and their account activity online. Client statements will include all positions, transactions and fees relating to the Client s account[s]. The Advisor may also provide Clients with periodic reports regarding their holdings, allocations, and performance. Item 14 Client Referrals and Other Compensation A. Compensation Received by CTWM Broker Dealer Affiliation Kevin C. Leahy is a Registered Representative of LPL of Boston, Massachusetts. LPL is a registered broker dealer (CRD No. 6413), member FINRA, SIPC. In his separate capacity as a Registered Representative, he may receive commissions for the implementation of recommendations for commissionable transactions. In addition, as a Registered Representative of LPL, he may receive 12b 1 distributions from investment companies in connection with the placement of client funds into investment companies. CTWM has received an economic benefit from LPL in the form of a loan, which may be forgiven if CTWM meets certain conditions in terms of maintaining a relationship with LPL. Please see detailed discussion of the conditions and potential conflicts of interest in Item 12 Brokerage Practices. Marketing Reimbursements At times, CTWM may be reimbursed or supported by Custodians, product sponsors and other unaffiliated third parties for Client events. The reimbursements received may pose a potential conflict of interest between CTWM and its Clients, as the reimbursements could have an incentive favoring certain products and providers. To mitigate this conflict, CTWM s Investment Committee reviews all investment policies and operates independent of any marketing support. Insurance Agency Affiliations Kevin C. Leahy, Managing Member of CTWM, may serve as a sales agent for various insurance companies. This activity is done separate and apart from his role with the CTWM. As an insurance agent, he may receive customary commissions and other related revenues from the various insurance companies whose products are sold. B. Client Referrals from Solicitors CTWM does not engage paid solicitors for Client referrals. Item 15 Custody CTWM generally does not accept or maintain custody of any Client accounts, except for the authorized deduction of the Advisor s fees. All Clients must place their assets with a qualified Custodian. Clients are required to approve the Custodian to retain their funds and securities and direct CTWM to utilize that Custodian for the Client s security transactions. CTWM encourages Clients to review statements provided by the Custodian(s). In certain instances, an advisory person of CTWM may also serve as trustee for a Client s account(s). CTWM is deemed to have custody of those Client s assets because the trustee has the authority to obtain possession and/or direct the movement of the assets. Under the custody rule, CTWM is required to have an annual surprise examination by an independent auditing firm to verify that Client funds and securities are in conformity with the Investment Advisors Act of For more information about Custodians and brokerage practices, see Item 12 Brokerage Practices. 12 P age
13 Item 16 Investment Discretion CTWM generally has discretion over the selection and amount of securities to be bought or sold in Client accounts without obtaining prior consent or approval from the Client. However, these purchases or sales may be subject to specified investment objectives, guidelines, or limitations previously set forth by the Client and agreed to by CTWM. Discretionary authority will only be authorized upon full disclosure to the Client. The granting of such authority will be evidenced by the Client's execution of an Investment Advisory Agreement containing all applicable limitations to such authority. All discretionary trades made by CTWM will be in accordance with each Client's investment objectives and goals. Item 17 Voting Client Securities CTWM does not accept proxy voting responsibility for any Client. Item 18 Financial Information Neither CTWM, nor its management has any adverse financial situations that would reasonably impair the ability of CTWM to meet all obligations to its Clients. Neither CTWM, nor any of its advisory persons, has been subject to a bankruptcy or financial compromise. CTWM is not required to deliver a balance sheet along with this Disclosure Brochure as the firm does not collect fees of $1,200 or more for services to be performed six months or more in advance. 13 P age