«Switchpoint Financial Planning LLC 896 W 1875 S Lehi, UT 84043 Phone: (602)859-8292 Form ADV Part 2A – Firm Brochure 602-859-8292 Dated February ...»
Item 1: Cover Page
Switchpoint Financial Planning LLC
896 W 1875 S
Lehi, UT 84043
Form ADV Part 2A – Firm Brochure
Dated February 10, 2016
This Brochure provides information about the qualifications and business practices of Switchpoint
Financial Planning LLC, “Switchpoint”. If you have any questions about the contents of this Brochure,
please contact us at 602-859-8292. The information in this Brochure has not been approved or verified
by the United States Securities and Exchange Commission or by any state securities authority.
Switchpoint Financial Planning LLC is registered as an Investment Adviser with the State of Utah.
Registration of an Investment Adviser does not imply any level of skill or training.
Additional information about Switchpoint is available on the SEC’s website at www.adviserinfo.sec.gov which can be found using the firm’s identification number 282856.
Item 2: Material Changes Since this is the first filing of the Form ADV Part 2A for Switchpoint, there is nothing to report. In the future, any material changes during the year made will be reported here.
Item 3: Table of Contents Contents Item 1: Cover Page Item 2: Material Changes Item 3: Table of Contents Item 4: Advisory Business Item 5: Fees and Compensation Item 6: Performance-Based Fees and Side-By-Side Management Item 7: Types of Clients Item 8: Methods of Analysis, Investment Strategies and Risk of Loss Item 9: Disciplinary Information Item 10: Other Financial Industry Activities and Affiliations Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Item 12: Brokerage Practices Item 13: Review of Accounts Item 14: Client Referrals and Other Compensation Item 15: Custody Item 16: Investment Discretion Item 17: Voting Client Securities Item 18: Financial Information Item 19: Requirements for State-Registered Advisers Form ADV Part 2B – Brochure Supplement Item 2: Educational Background and Business Experience Item 3: Disciplinary Information Item 4: Other Business Activities Item 6: Supervision Item 7: Requirements for State Registered Advisers Item 4: Advisory Business Description of Advisory Firm Switchpoint Financial Planning LLC is registered as an Investment Adviser with the State of Utah. We were founded in March 2015. James Rhead Sweeney is the principal owner of Switchpoint. As of March 1, 2016, Switchpoint Financial Planning LLC reports no Discretionary or Non-Discretionary Assets Under Management. All future Assets Under Management Calculations will be reported here.
Types of Advisory Services Financial Planning Financial planning is a comprehensive evaluation of a client’s current and future financial state by using currently known variables to predict future cash flows, asset values and withdrawal plans. The key defining aspect of financial planning is that through the financial planning process, all questions, information and analysis will be considered as they impact and are impacted by the entire financial and life situation of the client. Clients purchasing this service will receive a written or an electronic report, providing the client with a detailed financial plan designed to achieve his or her stated financial goals and objectives.
In general, the financial plan will address any or all of the following areas of concern. The client and advisor will work together to select the specific areas to cover. These areas may include, but are not
limited to, the following:
● Business Planning: We provide consulting services for clients who currently operate their own business, are considering starting a business, or are planning for an exit from their current business. Under this type of engagement, we work with you to assess your current situation, identify your objectives, and develop a plan aimed at achieving your goals.
● Cash Flow and Debt Management: We will conduct a review of your income and expenses to determine your current surplus or deficit along with advice on prioritizing how any surplus should be used or how to reduce expenses if they exceed your income. Advice may also be provided on which debts to pay off first based on factors such as the interest rate of the debt and any income tax ramifications. We may also recommend what we believe to be an appropriate cash reserve that should be considered for emergencies and other financial goals, along with a review of accounts (such as money market funds) for such reserves, plus strategies
to save desired amounts.
● College Savings: Includes projecting the amount that will be needed to achieve college or other post-secondary education funding goals, along with advice on ways for you to save the desired amount. Recommendations as to savings strategies are included, and, if needed, we will review your financial picture as it relates to eligibility for financial aid or the best way to contribute to grandchildren (if appropriate).
● Employee Benefits Optimization: We will provide review and analysis as to whether you, as an employee, are taking the maximum advantage possible of your employee benefits. If you are a business owner, we will consider and/or recommend the various benefit programs that can be structured to meet both business and personal retirement goals.
● Estate Planning: This usually includes an analysis of your exposure to estate taxes and your current estate plan, which may include whether you have a will, powers of attorney, trusts and other related documents. Our advice also typically includes ways for you to minimize or avoid future estate taxes by implementing appropriate estate planning strategies such as the use of applicable trusts.
We always recommend that you consult with a qualified attorney when you initiate, update, or complete estate planning activities. We may provide you with contact information for attorneys who specialize in estate planning when you wish to hire an attorney for such purposes. From time-to-time, we will participate in meetings or phone calls between you and your attorney with your approval or request.
● Financial Goals: We will help clients identify financial goals and develop a plan to reach them.
We will identify what you plan to accomplish, what resources you will need to make it happen, how much time you will need to reach the goal, and how much you should budget for your goal.
● Investment Analysis: Our investment approach is holistic in nature. We consider not only accounts managed by Switchpoint, but other assets owned by the client in developing an asset allocation strategy to meet clients’ financial goals and risk tolerance. This includes, but is not limited to, reviewing employee stock options, defined contribution plans (401k, 403b, etc), real estate assets, and other private investments, as well as assisting you in establishing investment accounts at a selected broker/dealer or custodian. The strategies and types of investments we may recommend are further discussed in Item 8 of this brochure.
● Retirement Planning: Our retirement planning services typically include projections of your likelihood of achieving your financial goals, typically focusing on financial independence as the primary objective. For situations where projections show less than the desired results, we may make recommendations, including those that may impact the original projections by adjusting certain variables (i.e., working longer, saving more, spending less, taking more risk with investments).
If you are near retirement or already retired, we will do a thorough analysis of your social security and pension benefits, as well as retirement accounts and other assets available for retirement needs. Advice may be given on appropriate distribution strategies to minimize the likelihood of running out of money or having to adversely alter spending during your retirement years.
● Insurance/Risk Management: A risk management review includes an analysis of your exposure to major risks that could have a significant adverse impact on your financial picture, such as premature death, disability, property and casualty losses, or the need for long-term care planning. Advice may be provided on ways to minimize such risks and about weighing the costs of purchasing insurance versus the benefits of doing so and, likewise, the potential cost of not purchasing insurance (“self-insuring”).
● Tax Planning Strategies: Advice may include ways to minimize current and future income taxes as a part of your overall financial planning picture. For example, we may make recommendations on which type of account(s) or specific investments should be owned based in part on their “tax efficiency,” with consideration that there is always a possibility of future changes to federal, state or local tax laws and rates that may impact your situation.
We recommend that you consult with a qualified tax professional before initiating any tax planning strategy, and we may provide you with contact information for accountants or attorneys who specialize in this area if you wish to hire someone for such purposes. We will participate in meetings or phone calls between you and your tax professional with your approval.
Investment Management Services
As part of our comprehensive financial planning service, we are in the business of managing individually tailored investment portfolios on a discretionary and non-discretionary basis. Our firm provides continuous advice to a client regarding the investment of client funds based on the individual needs of the client. Through personal discussions in which goals and objectives based on a client's particular circumstances are established, we develop a client's personal investment plan with an asset allocation target and create and manage a portfolio based on that policy and allocation target. During our data-gathering process, we determine the client’s individual objectives, time horizons, risk tolerance, and liquidity needs. We may also review and discuss a client’s prior investment history, as well as family composition and background.
Account supervision is guided by the stated objectives of the client (i.e., maximum capital appreciation, growth, income, or growth and income), as well as tax considerations. Clients may impose reasonable restrictions on investing in certain securities, types of securities, or industry sectors. Fees pertaining to this service are outlined in Item 5 of this brochure.
If you participate in our discretionary portfolio management services, we require you to grant our firm discretionary authority to manage your account. Discretionary authorization will allow us to determine the specific securities, and the amount of securities, to be purchased or sold for your account without your approval prior to each transaction. Discretionary authority is typically granted by the investment advisory agreement you sign with our firm and the appropriate trading authorization forms. You may, in our sole discretion, limit our discretionary authority (for example, limiting the types of securities that can be purchased for your account) by providing our firm with your restrictions and guidelines in writing. If you enter into non-discretionary arrangements with our firm, we must obtain your approval prior to executing any transactions on behalf of your account.
Client Tailored Services and Client Imposed Restrictions We offer the same suite of services to all of our clients. However, specific client financial plans and their implementation are dependent upon the client Investment Policy Statement which outlines each client’s current situation (income, tax levels, and risk tolerance levels) and is used to construct a client specific plan to aid in the selection of a portfolio that matches restrictions, needs, and targets.
Wrap Fee ProgramsWe do not participate in wrap fee programs.
Item 5: Fees and Compensation Please note, unless a client has received the firm’s disclosure brochure at least 48 hours prior to signing the investment advisory contract, the investment advisory contract may be terminated by the client within five (5) business days of signing the contract without incurring any advisory fees. How we are paid depends on the type of advisory service we are performing. Please review the fee and compensation information below.
Comprehensive Financial Planning and Investment Management Comprehensive Financial Planning and Investment Management consists of an upfront charge of as outlined below, billed 50% in advance and 50% after completion of initial financial plan. Thereafter, an ongoing fixed annual fee will be paid monthly or quarterly, in arrears, as outlined below. These fees may be negotiable in certain cases. Advisory fees may be directly debited from client accounts and paid quarterly at a rate of 1/4 the fixed annual fee, or the client may choose to pay monthly by check, credit card or ACH at a rate of 1/12 the annual fixed annual fee. This service may be terminated with 30 days’ notice. Since fees are paid in arrears, no rebate will be needed upon termination of the account.
Switchpoint believes that financial planning is a necessary prerequisite to building an appropriate investment plan and therefore does not offer investment management on a standalone basis.
Foundation The fee for this service is an upfront fee of $500 and an ongoing annual fee of $1,200.00 per year. Clients on the Foundation plan are typically young professionals looking to build a solid financial foundation.
Most have few, if any, investible assets. The Foundation plan focuses on budgeting and cash flow issues, employee benefits optimization and insurance protection. As needed, basic advice will be given related
to our other services. The Foundation plan includes:
● Initial Delivery and Annual Review of Financial Plan ● Post-meeting recommendations and follow-up ● Availability of adviser by phone or emails as questions arise throughout the year ● Access to online financial dashboard ● Investment management of portfolio up to $150,000 Growth The fee for this service is an upfront fee of $1,000 and an ongoing annual fee of $2,400.00 per year.
Clients on the Growth plan typically have higher incomes with more need for planning around tax issues.
Many have also started to accumulate significant assets and require additional advice regarding investments. The Growth plan includes all services in the Foundation plan, and includes additional focus