«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 ...»
on tax planning, college savings, and investment management, as well as the following:
● Semi-annual check-up via phone or email and follow-up action as needed ● Advisement on outside investment accounts, including 401k, 529 plan, etc ● Coordination with CPA on tax minimization strategies ● Investment management of portfolio up to $300,000 Expansion The fee for this service is an upfront fee of $1,500 and an ongoing annual fee of $3,600.00 per year.
Clients on the Expansion plan are typically in their peak earning years or in retirement and have more significant tax issues, larger net-worth’s and more need for retirement planning. The Expansion plan includes all services in the Growth and Foundation plans, with additional focus on retirement planning
and estate planning, as well as the following:
● Quarterly contact via phone or email and follow-up action as needed ● For retirees, investment withdrawal and social security maximization strategies ● Coordination with estate planning attorney ● Investment management of portfolio up to $500,000 Pinnacle The fee for this service is negotiable and depends on the needs of the client, but typically ranges from $5,000 to $10,000 per year. Clients on the Pinnacle plan typically have net worths in excess of $1,000,000
and are looking for additional services not provided in our standard plans, including, but not limited to:
● Investment management of portfolio exceeding $500,000 ● Custom meeting schedule, including quarterly or monthly ● Coordination of complex tax or estate planning issues with other advisors ● Advice on private or alternative investments ● Advice on stock options or executive compensation packages ● Business exit planning No increase in the annual fee shall be effective without agreement from the client by signing a new agreement or amendment to their current advisory agreement.
Hourly Planning and Project Fees Financial Planning projects will generally be offered on a fixed fee basis, which is agreed upon before the start of any work. Fixed fees will be determined on a case by case basis with the fee based on an estimate of the number of hours required to complete the project, multiplied by $150.00 per hour.
The fixed fee for planning projects typically range between $1,000.00 - $3,000.00. The fee is negotiable in certain cases. If a fixed fee program is chosen, half of the fee is due at the beginning of process and the remainder is due at completion of work, however, Switchpoint will not bill an amount above $500.00 more than 6 months in advance. If the situation necessitates additional work beyond the typical project range, an hourly rate of $150.00 per hour will be billed.
Other Types of Fees and Expenses Our fees are exclusive of brokerage commissions, transaction fees, and other related costs and expenses which may be incurred by the client. Clients may incur certain charges imposed by custodians, brokers, and other third parties such as custodial fees, deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions. Mutual fund and exchange traded funds also charge internal management fees, which are disclosed in a fund’s prospectus. Such charges, fees and commissions are exclusive of and in addition to our fee, and we shall not receive any portion of these commissions, fees, and costs.
Item 12 further describes the factors that we consider in selecting or recommending broker-dealers for client’s transactions and determining the reasonableness of their compensation (e.g., commissions).
We do not accept compensation for the sale of securities or other investment products including assetbased sales charges or service fees from the sale of mutual funds.
Item 6: Performance-Based Fees and SideBy-Side Management We do not offer performance-based fees.
Item 7: Types of Clients We provide financial planning and portfolio management services to individuals. We do not have a minimum account size requirement.
Item 8: Methods of Analysis, Investment Strategies and Risk of Loss Passive Investment Management We primarily practice passive investment management. Passive investing involves building portfolios that are comprised of various distinct asset classes. The asset classes are weighted in a manner to achieve a desired relationship between correlation, risk and return. Funds that passively capture the returns of the desired asset classes are placed in the portfolio. The funds that are used to build passive portfolios are typically index mutual funds or exchange traded funds.
Passive investment management is characterized by low portfolio expenses (i.e. the funds inside the portfolio have low internal costs), minimal trading costs (due to infrequent trading activity), and relative tax efficiency (because the funds inside the portfolio are tax efficient and turnover inside the portfolio is minimal).
In contrast, active management involves a single manager or managers who employ some method, strategy or technique to construct a portfolio that is intended to generate returns that are greater than the broader market or a designated benchmark. Academic research indicates most active managers underperform the market.
Material Risks Involved All investing strategies we offer involve risk and may result in a loss of your original investment which you should be prepared to bear. Many of these risks apply equally to stocks, bonds, commodities and any other investment or security. Material risks associated with our investment strategies are listed below.
Market Risk: Market risk involves the possibility that an investment’s current market value will fall because of a general market decline, reducing the value of the investment regardless of the operational success of the issuer’s operations or its financial condition.
Strategy Risk: The Adviser’s investment strategies and/or investment techniques may not work as intended.
Small and Medium Cap Company Risk: Securities of companies with small and medium market capitalizations are often more volatile and less liquid than investments in larger companies. Small and medium cap companies may face a greater risk of business failure, which could increase the volatility of the client’s portfolio.
Limited markets: Certain securities may be less liquid (harder to sell or buy) and their prices may at times be more volatile than at other times. Under certain market conditions we may be unable to sell or liquidate investments at prices we consider reasonable or favorable, or find buyers at any price.
Concentration Risk: Certain investment strategies focus on particular asset-classes, industries, sectors or types of investment. From time to time these strategies may be subject to greater risks of adverse developments in such areas of focus than a strategy that is more broadly diversified across a wider variety of investments.
Interest Rate Risk: Bond (fixed income) prices generally fall when interest rates rise, and the value may fall below par value or the principal investment. The opposite is also generally true: bond prices generally rise when interest rates fall. In general, fixed income securities with longer maturities are more sensitive to these price changes. Most other investments are also sensitive to the level and direction of interest rates.
Legal or Legislative Risk: Legislative changes or Court rulings may impact the value of investments, or the securities’ claim on the issuer’s assets and finances.
Inflation: Inflation may erode the buying-power of your investment portfolio, even if the dollar value of your investments remains the same.
Risks Associated with Securities Apart from the general risks outlined above which apply to all types of investments, specific securities may have other risks.
Commercial Paper is, in most cases, an unsecured promissory note that is issued with a maturity of 270 days or less. Being unsecured the risk to the investor is that the issuer may default.
Common stocks may go up and down in price quite dramatically, and in the event of an issuer’s bankruptcy or restructuring could lose all value. A slower-growth or recessionary economic environment could have an adverse effect on the price of all stocks.
Corporate Bonds are debt securities to borrow money. Generally, issuers pay investors periodic interest and repay the amount borrowed either periodically during the life of the security and/or at maturity. Alternatively, investors can purchase other debt securities, such as zero coupon bonds, which do not pay current interest, but rather are priced at a discount from their face values and their values accrete over time to face value at maturity. The market prices of debt securities fluctuate depending on such factors as interest rates, credit quality, and maturity. In general, market prices of debt securities decline when interest rates rise and increase when interest rates fall. The longer the time to a bond’s maturity, the greater its interest rate risk.
Bank Obligations including bonds and certificates of deposit may be vulnerable to setbacks or panics in the banking industry. Banks and other financial institutions are greatly affected by interest rates and may be adversely affected by downturns in the U.S. and foreign economies or changes in banking regulations.
Municipal Bonds are debt obligations generally issued to obtain funds for various public purposes, including the construction of public facilities. Municipal bonds pay a lower rate of return than most other types of bonds. However, because of a municipal bond’s tax-favored status, investors should compare the relative after-tax return to the after-tax return of other bonds, depending on the investor’s tax bracket. Investing in municipal bonds carries the same general risks as investing in bonds in general. Those risks include interest rate risk, reinvestment risk, inflation risk, market risk, call or redemption risk, credit risk, and liquidity and valuation risk.
Options and other derivatives carry many unique risks, including time-sensitivity, and can result in the complete loss of principal. While covered call writing does provide a partial hedge to the stock against which the call is written, the hedge is limited to the amount of cash flow received when writing the option. When selling covered calls, there is a risk the underlying position may be called away at a price lower than the current market price.
Exchange Traded Funds prices may vary significantly from the Net Asset Value due to market conditions. Certain Exchange Traded Funds may not track underlying benchmarks as expected.
Investment Companies Risk. When a client invests in open end mutual funds or ETFs, the client indirectly bears its proportionate share of any fees and expenses payable directly by those funds.
Therefore, the client will incur higher expenses, many of which may be duplicative. In addition, the client’s overall portfolio may be affected by losses of an underlying fund and the level of risk arising from the investment practices of an underlying fund (such as the use of derivatives). ETFs are also subject to the following risks: (i) an ETF’s shares may trade at a market price that is above or below their net asset value; (ii) the ETF may employ an investment strategy that utilizes high leverage ratios;
or (iii) trading of an ETF’s shares may be halted if the listing exchange’s officials deem such action appropriate, the shares are de-listed from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally. The Adviser has no control over the risks taken by the underlying funds in which clients invest.
Item 9: Disciplinary Information Registered investment advisers are required to disclose all material facts regarding any legal or disciplinary events that would be material to your evaluation of Switchpoint or the integrity of our management. We have no information applicable to this Item.
Item 10: Other Financial Industry Activities and Affiliations James Sweeney currently does not participate in other financial industry activities and is not affiliated with other financial firms. Switchpoint does not recommend, or select other investment advisers for its clients.
Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading As a fiduciary, our firm and its associates have a duty of utmost good faith to act solely in the best interests of each client. Our clients entrust us with their funds and personal information, which in turn places a high standard on our conduct and integrity. Our fiduciary duty is a core aspect of our Code of Ethics and represents the expected basis of all of our dealings.
This code does not attempt to identify all possible conflicts of interest, and literal compliance with each of its specific provisions will not shield associated persons from liability for personal trading or other conduct that violates a fiduciary duty to advisory clients. A summary of the Code of Ethics' Principles is outlined below.
• Integrity - Associated persons shall offer and provide professional services with integrity.
• Objectivity - Associated persons shall be objective in providing professional services to clients.
• Competence - Associated persons shall provide services to clients competently and maintain the necessary knowledge and skill to continue to do so in those areas in which they are engaged.
• Fairness - Associated persons shall perform professional services in a manner that is fair and reasonable to clients, principals, partners, and employers, and shall disclose conflict(s) of interest in providing such services.
• Confidentiality - Associated persons shall not disclose confidential client information without the specific consent of the client unless in response to proper legal process, or as required by law.
• Professionalism - Associated persons’ conduct in all matter shall reflect credit of the profession.
• Diligence - Associated persons shall act diligently in providing professional services.
We will, upon request, promptly provide a complete code of ethics.
Our firm and its “related persons” (associates, their immediate family members, etc.) may buy or sell securities the same as, similar to, or different from, those we recommend to clients for their accounts.