Daniel Bernstein
Archetype ADV Brochure 11.12.2020 Disclosure Brochure
November 2, 2020
a Registered Investment Adviser
4400 Post Oak Pkwy, Suite 1950 Houston, TX 77027
(346) 352-2360
www.archetypewealth.com
This brochure provides information about the qualifications and business practices of Archetype Wealth Partners, LLC (hereinafter "Archetype Wealth Partners" or the "Firm"). If you have any questions about the contents of this brochure, please contact the Firm at the telephone number listed above. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission (SEC) or by any state securities authority. Additional information about the Firm is available on the SEC's website at www.adviserinfo.sec.gov. The Firm is a registered investment adviser. Registration does not imply any level of skill or training.
Disclosure Brochure
Archetype Wealth Partners, LLC
Item 2. Material Changes
In this Item, Archetype Wealth Partners is required to discuss any material changes that have been made to the brochure since the last annual amendment. Archetype Wealth Partners, LLC significantly increased in assets under management (AUM) with the addition of the Atlanta office, and updated its ownership structure to include a minority share of ownership by Archetype Wealth Partners, LTD. Additionally, Archetype Wealth Partners updated their office address and removed the disciplinary history of an advisor who moved to a different firm.
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Item 3. Table of Contents
Item 2. Material Changes..............................................................................................................................................2 Item 3. Table of Contents .............................................................................................................................................3 Item 4. Advisory Business ............................................................................................................................................4 Item 5. Fees and Compensation....................................................................................................................................6 Item 6. Performance-Based Fees and Side-by-Side Management ................................................................................9 Item 7. Types of Clients................................................................................................................................................9 Item 8. Methods of Analysis, Investment Strategies and Risk of Loss.........................................................................9 Item 9. Disciplinary Information ................................................................................................................................ 13 Item 10. Other Financial Industry Activities and Affiliations .................................................................................... 13 Item 11. Code of Ethics .............................................................................................................................................. 14 Item 12. Brokerage Practices ...................................................................................................................................... 15 Item 13. Review of Accounts ..................................................................................................................................... 18 Item 14. Client Referrals and Other Compensation.................................................................................................... 18 Item 15. Custody......................................................................................................................................................... 19 Item 16. Investment Discretion................................................................................................................................... 19 Item 17. Voting Client Securities ............................................................................................................................... 20 Item 18. Financial Information ................................................................................................................................... 20
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Item 4. Advisory Business
Archetype Wealth Partners offers a variety of advisory services, which include financial planning, consulting, and investment management services. Prior to Archetype Wealth Partners rendering any of the foregoing advisory services, clients are required to enter into one or more written agreements with Archetype Wealth Partners setting forth the relevant terms and conditions of the advisory relationship (the "Advisory Agreement").
Archetype Wealth Partners filed for registration as an investment adviser in April 2017 and is owned by Jeffrey A. Thomas and Archetype Wealth Partners, LTD. As of December 31, 2019 Archetype Wealth Partners had $348,462,657 in assets under management, $348,462,657 of which was managed on a discretionary basis and $0 of which was managed on a non-discretionary basis.
While this brochure generally describes the business of Archetype Wealth Partners, certain sections also discuss the activities of its Supervised Persons, which refer to the Firm's officers, partners, directors (or other persons occupying a similar status or performing similar functions), employees or any other person who provides investment advice on Archetype Wealth Partners' behalf and is subject to the Firm's supervision or control.
Financial Planning and Consulting Services
Archetype Wealth Partners offers clients a broad range of financial planning and consulting services, which may include any or all of the following functions:
Business Planning Cash Flow Forecasting Trust and Estate Planning Financial Reporting Investment Consulting Insurance Planning
Retirement Planning Risk Management Charitable Giving Distribution Planning Tax Planning Manager Due Diligence
While each of these services is available on a stand-alone basis, certain of them may also be rendered in conjunction with investment portfolio management as part of a comprehensive wealth management engagement (described in more detail below).
In performing these services, Archetype Wealth Partners is not required to verify any information received from the client or from the client's other professionals (e.g., attorneys, accountants, etc.,) and is expressly authorized to rely on such information. Archetype Wealth Partners may recommend clients engage the Firm for additional related services and/or other professionals to implement its recommendations. Clients
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are advised that a conflict of interest exists for the Firm to recommend that clients engage Archetype Wealth Partners or its affiliates to provide (or continue to provide) additional services for compensation, including investment management services. Clients retain absolute discretion over all decisions regarding implementation and are under no obligation to act upon any of the recommendations made by Archetype Wealth Partners under a financial planning or consulting engagement. Clients are advised that it remains their responsibility to promptly notify the Firm of any change in their financial situation or investment objectives for the purpose of reviewing, evaluating or revising Archetype Wealth Partners' recommendations and/or services.
Wealth Management Services
Archetype Wealth Partners provides clients with wealth management services which includes a broad range of comprehensive financial planning and consulting services as well as discretionary and/or nondiscretionary management of investment portfolios.
Archetype Wealth Partners primarily allocates client assets among various mutual funds, exchange-traded funds ("ETFs"), individual debt and equity securities, and independent investment managers ("Independent Managers") in accordance with their stated investment objectives.
Where appropriate, the Firm may also provide advice about any type of legacy position or other investment held in client portfolios. Clients may engage Archetype Wealth Partners to manage and/or advise on certain investment products that are not maintained at their primary custodian, such as variable life insurance and annuity contracts and assets held in employer sponsored retirement plans and qualified tuition plans (i.e., 529 plans). In these situations, Archetype Wealth Partners directs or recommends the allocation of client assets among the various investment options available with the product. These assets are generally maintained at the underwriting insurance company or the custodian designated by the product's provider.
Archetype Wealth Partners tailors its advisory services to meet the needs of its individual clients and seeks to ensure, on a continuous basis, that client portfolios are managed in a manner consistent with those needs and objectives. Archetype Wealth Partners consults with clients on an initial and ongoing basis to assess their specific risk tolerance, time horizon, liquidity constraints and other related factors relevant to the management of their portfolios. Clients are advised to promptly notify Archetype Wealth Partners if there are changes in their financial situation or if they wish to place any limitations on the management of their portfolios. Clients may impose reasonable restrictions or mandates on the management of their accounts if Archetype Wealth Partners determines, in its sole discretion, the conditions would not materially impact the performance of a management strategy or prove overly burdensome to the Firm's management efforts.
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Use of Independent Managers
As mentioned above, Archetype Wealth Partners may select certain Independent Managers to actively manage a portion of its clients' assets. The specific terms and conditions under which a client engages an Independent Manager may be set forth in a separate written agreement with the designated Independent Manager. In addition to this brochure, clients may also receive the written disclosure documents of the respective Independent Managers engaged to manage their assets.
Archetype Wealth Partners evaluates a variety of information about Independent Managers, which may include the Independent Managers' public disclosure documents, materials supplied by the Independent Managers themselves and other third-party analyses it believes are reputable. To the extent possible, the Firm seeks to assess the Independent Managers' investment strategies, past performance and risk results in relation to its clients' individual portfolio allocations and risk exposure. Archetype Wealth Partners also takes into consideration each Independent Manager's management style, returns, reputation, financial strength, reporting, pricing and research capabilities, among other factors.
Archetype Wealth Partners continues to provide services relative to the discretionary or non-discretionary selection of the Independent Managers. On an ongoing basis, the Firm monitors the performance of those accounts being managed by Independent Managers. Archetype Wealth Partners seeks to ensure the Independent Managers' strategies and target allocations remain aligned with its clients' investment objectives and overall best interests.
Item 5. Fees and Compensation
Archetype Wealth Partners offers services on a fee basis, which may include fixed fees, as well as fees based upon assets under management or advisement.
Financial Planning and Consulting Fees
Archetype Wealth Partners generally charges a fixed fee for providing financial planning and consulting services under a stand-alone engagement. These fees are negotiable, but generally range from $500 to $100,000, depending upon the scope and complexity of the services and the professional rendering the financial planning and/or the consulting services. If the client engages the Firm for additional investment advisory services, Archetype Wealth Partners may offset all or a portion of its fees for those services based upon the amount paid for the financial planning and/or consulting services.
The terms and conditions of the financial planning and/or consulting engagement are set forth in the Advisory Agreement and Archetype Wealth Partners generally requires one-half of the fee (estimated
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hourly or fixed) payable upon execution of the Advisory Agreement. The outstanding balance is generally due upon delivery of the financial plan or completion of the agreed upon services. The Firm does not, however, take receipt of $1,200 or more in prepaid fees in excess of six months in advance of services rendered.
Wealth Management Fees
Depending on the particular client engagement, Archetype Wealth Partners offers investment management services for an annual fee based on the amount of assets under the Firm's management. This management fee varies in accordance with the following blended fee schedule:
PORTFOLIO VALUE
First $1,000,000 Next $1,000,000 Next $3,000,000 Above $5,000,000
BASE FEE
2.00% 1.50% 1.00% Negotiable
The Firm may also charge a fixed fee for the financial planning and consulting services that are provided under a wealth management relationship. The annual fee is prorated and charged quarterly, in advance, based upon the market value of the assets being managed by Archetype Wealth Partners on the last day of the previous billing period. If assets are deposited into or withdrawn from an account after the inception of a billing period, the fee payable with respect to such assets is adjusted to reflect the interim change in portfolio value. For the initial period of an engagement, the fee is calculated on a pro rata basis. In the event the advisory agreement is terminated, the fee for the final billing period is prorated through the effective date of the termination and the outstanding or unearned portion of the fee is charged or refunded to the client, as appropriate.
As an alternative to the above fee arrangement, the Firm offers investment management as well as financial planning and consulting services for a negotiated fixed annual fee that is prorated and charged either monthly or quarterly in advance.
Additionally, for asset management services the Firm provides with respect to certain client holdings (e.g., held-away assets, accommodation accounts, alternative investments, etc.), Archetype Wealth Partners may negotiate a fee rate that differs from the range set forth above.
Fee Discretion
Archetype Wealth Partners may, in its sole discretion, negotiate to charge a lesser fee based upon certain criteria, such as anticipated future earning capacity, anticipated future additional assets, dollar amount of
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assets to be managed, related accounts, account composition, pre-existing/legacy client relationship, account retention and pro bono activities. In addition, the Firm may charge a lesser fee for assets where the Firm provides services (such as reporting and analysis for financial planning purposes), but does not manage the assets on an ongoing basis.
Additional Fees and Expenses
In addition to the advisory fees paid to Archetype Wealth Partners, clients may also incur certain charges imposed by other third parties, such as broker-dealers, custodians, trust companies, banks and other financial institutions (collectively "Financial Institutions"). These additional charges may include securities brokerage commissions and other transaction costs, custodial fees, fees charged by the Independent Managers, margin costs, charges imposed directly by a mutual fund or ETF in a client's account, as disclosed in the fund's prospectus (e.g., fund management fees and other fund expenses), 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. The Firm's brokerage practices are described at length in Item 12, below.
Direct Fee Debit
Clients generally provide Archetype Wealth Partners and/or certain Independent Managers with the authority to directly debit their accounts for payment of the investment advisory fees. The Financial Institutions that act as the qualified custodian for client accounts, from which the Firm retains the authority to directly deduct fees, have agreed to send statements to clients not less than quarterly detailing all account transactions, including any amounts paid to Archetype Wealth Partners.
Use of Margin
The Firm may be authorized to use margin in the management of the client's investment portfolio. In these cases the fee payable will be assessed net of margin such that the market value of the client's account and corresponding fee payable by the client to the Firm will not be increased.
Account Additions and Withdrawals
Clients may make additions to and withdrawals from their account at any time, subject to Archetype Wealth Partners' right to terminate an account. Additions may be in cash or securities provided that the Firm reserves the right to liquidate any transferred securities or declines to accept particular securities into a client's account. Clients may withdraw account assets on notice to Archetype Wealth Partners, subject to the usual and customary securities settlement procedures. However, the Firm generally designs its portfolios as long-term investments and the withdrawal of assets may impair the achievement of a client's
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investment objectives. Archetype Wealth Partners may consult with its clients about the options and implications of transferring securities. Clients are advised that when transferred securities are liquidated, they may be subject to transaction fees, short-term redemption fees, fees assessed at the mutual fund level (e.g., contingent deferred sales charges) and/or tax ramifications.
Item 6. Performance-Based Fees and Side-by-Side Management
Archetype Wealth Partners does not provide any services for a performance-based fee (i.e., a fee based on a share of capital gains or capital appreciation of a client's assets).
Item 7. Types of Clients
Archetype Wealth Partners offers services to individuals, trusts, estates, charitable organizations, corporations and business entities.
Minimum Account Requirements
Advisor Managed Accounts are generally subject to a minimum household investment amount of $200,000 although exceptions can be made. Certain Independent Managers may, however, impose more restrictive account requirements and billing practices from the Firm. In these instances, Archetype Wealth Partners may alter its corresponding account requirements and/or billing practices to accommodate those of the Independent Managers.
Item 8. Methods of Analysis, Investment Strategies and Risk of Loss
Methods of Analysis
Archetype Wealth Partners utilizes a combination of fundamental, technical, and cyclical methods of analysis.
Fundamental analysis involves an evaluation of the fundamental financial condition and competitive position of a particular fund or issuer. For Archetype Wealth Partners, this process typically involves an analysis of an issuer's management team, investment strategies, style drift, past performance, reputation and financial strength in relation to the asset class concentrations and risk exposures of the Firm's model
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asset allocations. A substantial risk in relying upon fundamental analysis is that while the overall health and position of a company may be good, evolving market conditions may negatively impact the security.
Technical analysis involves the examination of past market data rather than specific issuer information in determining the recommendations made to clients. Technical analysis may involve the use of mathematical based indicators and charts, such as moving averages and price correlations, to identify market patterns and trends which may be based on investor sentiment rather than the fundamentals of the company. A substantial risk in relying upon technical analysis is that spotting historical trends may not help to predict such trends in the future. Even if the trend will eventually reoccur, there is no guarantee that Archetype Wealth Partners will be able to accurately predict such a reoccurrence.
Cyclical analysis is similar to technical analysis in that it involves the assessment of market conditions at a macro (entire market or economy) or micro (company specific) level, rather than focusing on the overall fundamental analysis of the health of the particular company that Archetype Wealth Partners is recommending. The risks with cyclical analysis are similar to those of technical analysis.
Investment Strategies
Archetype Wealth Partners considers a client's goals and risk tolerance before reaching a mutual decision with the client on how bestto build an investment portfolio. Archetype Wealth Partners follows a rigorous and detailed planning process to create a diversified portfolio aimed at meeting client objectives. Upon completion of the analysis Archetype Wealth Partners and the client will review the different investment options that are available to meet the objectives. These investment options may include a combination of (i) portfolios that are managed internally by Archetype Wealth Partners (ii) portfolios that are actively managed by outside managers via ETFs, mutual funds, closed-end funds, investment partnerships and/or Independent Manager's and (iii) passive portfolios with investments in ETFs and/or mutual funds. On occasion the Firm may utilize other financial products including annuities and insurance to meet client objectives.
Archetype Wealth Partners is focused on delivering attractive risk-adjusted returns for our clients. The Firm seeks to accomplish this through a combination of fundamental and quantitative analysis. Archetype Wealth Partners manages a variety of portfolios internally which are comprised of individual equity securities, individual bonds, ETFs, closed-end funds and open end mutual funds. These portfolios are built using the Firm's in-house fundamental and quantitative research as well as third-party research.
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Risk of Loss
Market Risks
Investing involves risk, including the potential loss of principal, and all investors should be guided accordingly. The profitability of a significant portion of Archetype Wealth Partners' recommendations and/or investment decisions may depend to a great extent upon correctly assessing the future course of price movements of stocks, bonds and other asset classes. There can be no assurance that Archetype Wealth Partners will be able to predict those price movements accurately or capitalize on any such assumptions.
Volatility Risks
The prices and values of investments can be highly volatile, and are influenced by, among other things, interest rates, general economic conditions, the condition of the financial markets, the financial condition of the issuers of such assets, changing supply and demand relationships, and programs and policies of governments.
Cash Management Risks
The Firm may invest some of a client's assets temporarily in money market funds or other similar types of investments, during which time an advisory account may be prevented from achieving its investment objective.
Equity-Related Securities and Instruments
The Firm may take long and short positions in common stocks of U.S. and non-U.S. issuers traded on national securities exchanges and over-the-counter markets. The value of equity securities varies in response to many factors. These factors include, without limitation, factors specific to an issuer and factors specific to the industry in which the issuer participates. Individual companies may report poor results or be negatively affected by industry and/or economic trends and developments, and the stock prices of such companies may suffer a decline in response. In addition, equity securities are subject to stock risk, which is the risk that stock prices historically rise and fall in periodic cycles. U.S. and non-U.S. stock markets have experienced periods of substantial price volatility in the past and may do so again in the future. In addition, investments in small-capitalization, mid-capitalization and financially distressed companies may
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be subject to more abrupt or erratic price movements and may lack sufficient market liquidity, and these issuers often face greater business risks.
Fixed Income Securities
Fixed income securities are subject to the risk of the issuer's or a guarantor's inability to meet principal and interest payments on its obligations and to price volatility.
Mutual Funds and ETFs
An investment in a mutual fund or ETF involves risk, including the loss of principal. Mutual fund and ETF shareholders are necessarily subject to the risks stemming from the individual issuers of the fund's underlying portfolio securities. Such shareholders are also liable for taxes on any fund-level capital gains, as mutual funds and ETFs are required by law to distribute capital gains in the event they sell securities for a profit that cannot be offset by a corresponding loss.
Shares of mutual funds are generally distributed and redeemed on an ongoing basis by the fund itself or a broker acting on its behalf. The trading price at which a share is transacted is equal to a fund's stated daily per share net asset value ("NAV"), plus any shareholders fees (e.g., sales loads, purchase fees, redemption fees). The per share NAV of a mutual fund is calculated at the end of each business day, although the actual NAV fluctuates with intraday changes to the market value of the fund's holdings. The trading prices of a mutual fund's shares may differ significantly from the NAV during periods of market volatility, which may, among other factors, lead to the mutual fund's shares trading at a premium or discount to actual NAV. The Firm may also invest in "closed end" funds. Closed end funds have a fixed number of shares outstanding. There are differing risks with closed end funds which include use of leverage and share prices that trade at a discount from their net asset value.
Shares of ETFs are listed on securities exchanges and transacted at negotiated prices in the secondary market. Generally, ETF shares trade at or near their most recent NAV, which is generally calculated at least once daily for indexed based ETFs and potentially more frequently for actively managed ETFs. However, certain inefficiencies may cause the shares to trade at a premium or discount to their pro rata NAV. There is also no guarantee that an active secondary market for such shares will develop or continue to exist. Generally, an ETF only redeems shares when aggregated as creation units (usually 20,000 shares or more). Therefore, if a liquid secondary market ceases to exist for shares of a particular ETF, a shareholder may have no way to dispose of such shares. Risks specific to the funds held by a client will be further discussed in each fund's prospectus which will be delivered to each investor.
Use of Independent Managers
As stated above, Archetype Wealth Partners may select certain Independent Managers to manage a portion of its clients' assets. In these situations, Archetype Wealth Partners continues to conduct ongoing due diligence of such managers, but such recommendations rely to a great extent on the Independent Managers'
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ability to successfully implement their investment strategies. In addition, Archetype Wealth Partners generally may not have the ability to supervise the Independent Managers on a day-to-day basis.
Use of Margin
While the use of margin borrowing can substantially improve returns, it may also increase overall portfolio risk. Margin transactions are generally effected using capital borrowed from a Financial Institution, which is secured by a client's holdings. Under certain circumstances, a lending Financial Institution may demand an increase in the underlying collateral. If the client is unable to provide the additional collateral, the Financial Institution may liquidate account assets to satisfy the client's outstanding obligations, which could have extremely adverse consequences. In addition, fluctuations in the amount of a client's borrowings and the corresponding interest rates may have a significant effect on the profitability and stability of a client's portfolio.
Item 9. Disciplinary Information
Archetype Wealth Partners, LLC. has not been involved in any legal or disciplinary events that are material to a client's evaluation of its advisory business or the integrity of its management.
Item 10. Other Financial Industry Activities and Affiliations
This item requires investment advisers to disclose certain financial industry activities and affiliations.
Related Certified Public Accountant
Archetype Wealth Partners does not render accounting services to clients. In the event a client requires accounting services, the firm may recommend a certified public accountant. At times, the Firm may recommend the services of its investment adviser representative Michael Richter through the certified public accounting firm of Mike Richter CPA, PLLC. These services are rendered independent of Archetype Wealth Partners and pursuant to a separate agreement between the client and the accounting firm. The Firm does not receive any portion of the fees paid by the client to Mike Richter CPA, PLLC. There exists a conflict of interest to the extent that the Firm recommends the accounting services of Mike Richter CPA, PLLC.
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Item 11. Code of Ethics
Archetype Wealth Partners has adopted a code of ethics in compliance with applicable securities laws ("Code of Ethics") that sets forth the standards of conduct expected of its Supervised Persons. Archetype Wealth Partners' Code of Ethics contains written policies reasonably designed to prevent certain unlawful practices such as the use of material non-public information by the Firm or any of its Supervised Persons and the trading by the same of securities ahead of clients in order to take advantage of pending orders.
The Code of Ethics also requires certain of Archetype Wealth Partners' personnel to report their personal securities holdings and transactions and obtain pre-approval of certain investments (e.g., initial public offerings, limited offerings). However, the Firm's Supervised Persons are permitted to buy or sell securities that it also recommends to clients if done in a fair and equitable manner that is consistent with the Firm's policies and procedures. This Code of Ethics has been established recognizing that some securities trade in sufficiently broad markets to permit transactions by certain personnel to be completed without any appreciable impact on the markets of such securities. Therefore, under limited circumstances, exceptions may be made to the policies stated below.
When the Firm is engaging in or considering a transaction in any security on behalf of a client, no Supervised Person with access to this information may knowingly effect for themselves or for their immediate family (i.e., spouse, minor children and adults living in the same household) a transaction in that security unless:
· the transaction has been completed;
· the transaction for the Supervised Person is completed as part of a batch trade with clients; or
· a decision has been made not to engage in the transaction for the client.
These requirements are not applicable to: (i) direct obligations of the Government of the United States; (ii) money market instruments, bankers' acceptances, bank certificates of deposit, commercial paper, repurchase agreements and other high quality short-term debt instruments, including repurchase agreements; (iii) shares issued by mutual funds or money market funds; and (iv) shares issued by unit investment trusts that are invested exclusively in one or more mutual funds.
Clients and prospective clients may contact Archetype Wealth Partners to request a copy of its Code of Ethics.
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Item 12. Brokerage Practices
Recommendation of Broker/Dealers for Client Transactions
Archetype Wealth Partners generally recommends that clients utilize the custody, brokerage and clearing services of Schwab Advisor ServicesTM ("Schwab") for investment management accounts.
Factors which Archetype Wealth Partners considers in recommending Schwab or any other broker-dealer to clients include their respective financial strength, reputation, execution, pricing, research and service. Schwab may enable the Firm to obtain many mutual funds without transaction charges and other securities at nominal transaction charges. Schwab has also agreed to reimburse clients for exit fees associated with moving accounts to Schwab. The reimbursement is only available up to a certain amount for the Firm's clients over a twelve month period. Fees are reimbursed on a first-come-first-served basis so that no clients are favored. The commissions and/or transaction fees charged by Schwab may be higher or lower than those charged by other Financial Institutions.
The commissions paid by Archetype Wealth Partners' clients to Schwab comply with the Firm's duty to obtain "best execution." Clients may pay commissions that are higher than another qualified Financial Institution might charge to effect the same transaction where Archetype Wealth Partners determines that the commissions are reasonable in relation to the value of the brokerage and research services received. In seeking best execution, the determinative factor is not the lowest possible cost, but whether the transaction represents the best qualitative execution, taking into consideration the full range of a Financial Institution's services, including among others, the value of research provided, execution capability, commission rates and responsiveness. Archetype Wealth Partners seeks competitive rates but may not necessarily obtain the lowest possible commission rates for client transactions.
Transactions may be cleared through other broker-dealers with whom the Firm and its custodians have entered into agreements for prime brokerage clearing services. Should an account make use of prime brokerage, the Client may be required to sign an additional agreement, and additional fees are likely to be charged.
Consistent with obtaining best execution, brokerage transactions may be directed to certain broker/dealers in return for investment research products and/or services which assist Archetype Wealth Partners in its investment decision-making process. Such research generally will be used to service all of the Firm's clients, but brokerage commissions paid by one client may be used to pay for research that is not used in managing that client's portfolio. The receipt of investment research products and/or services as well as the allocation of the benefit of such investment research products and/or services poses a conflict of interest because Archetype Wealth Partners does not have to produce or pay for the products or services.
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Archetype Wealth Partners periodically and systematically reviews its policies and procedures regarding its recommendation of Financial Institutions in light of its duty to obtain best execution.
Software and Support Provided by Financial Institutions
Archetype Wealth Partners may receive without cost from Schwab computer software and related systems support, which allow Archetype Wealth Partners to better monitor client accounts maintained at Schwab. Archetype Wealth Partners may receive the software and related support without cost because the Firm renders investment management services to clients that maintain assets at Schwab. The software and support is not provided in connection with securities transactions of clients (i.e., not "soft dollars"). The software and related systems support may benefit Archetype Wealth Partners, but not its clients directly. In fulfilling its duties to its clients, Archetype Wealth Partners endeavors at all times to put the interests of its clients first. Clients should be aware, however, that Archetype Wealth Partners' receipt of economic benefits from a broker/dealer creates a conflict of interest since these benefits may influence the Firm's choice of broker/dealer over another that does not furnish similar software, systems support or services, especially because the support is contingent upon clients placing a certain level(s) of assets at Schwab.
Specifically, Archetype Wealth Partners may receive the following benefits from Schwab:
· Funds to be used toward eligible third-party vendor services and services provided by Schwab affiliates for marketing, technology, consulting or research expenses. Additional funds are available provided that the value of client assets on the Schwab platform equal or exceed a pre- determined threshold. This arrangement creates a conflict of interest as it creates an incentive for the Firm to recommend Schwab's services to its clients in order to receive such benefits.
· Receipt of duplicate client confirmations and bundled duplicate statements;
· Access to a trading desk that exclusively services its institutional traders;
· Access to block trading which provides the ability to aggregate securities transactions and then allocate the appropriate shares to client accounts; and
· Access to an electronic communication network for client order entry and account information.
Brokerage for Client Referrals
Archetype Wealth Partners does not consider, in selecting or recommending broker/dealers, whether the Firm receives client referrals from the Financial Institutions or other third party.
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Directed Brokerage
The client may direct Archetype Wealth Partners in writing to use a particular Financial Institution to execute some or all transactions for the client. In that case, the client will negotiate terms and arrangements for the account with that Financial Institution and the Firm will not seek better execution services or prices from other Financial Institutions or be able to "batch" client transactions for execution through other Financial Institutions with orders for other accounts managed by Archetype Wealth Partners (as described above). As a result, the client may pay higher commissions or other transaction costs, greater spreads or may receive less favorable net prices, on transactions for the account than would otherwise be the case. Subject to its duty of best execution, Archetype Wealth Partners may decline a client's request to direct brokerage if, in the Firm's sole discretion, such directed brokerage arrangements would result in additional operational difficulties.
Trade Aggregation
Transactions for each client generally will be effected independently, unless Archetype Wealth Partners decides to purchase or sell the same securities for several clients at approximately the same time. Archetype Wealth Partners may (but is not obligated to) combine or "batch" such orders to obtain best execution, to negotiate more favorable commission rates or to allocate equitably among the Firm's clients differences in prices and commissions or other transaction costs that might not have been obtained had such orders been placed independently. Under this procedure, transactions will generally be averaged as to price and allocated among Archetype Wealth Partners' clients pro rata to the purchase and sale orders placed for each client on any given day. To the extent that the Firm determines to aggregate client orders for the purchase or sale of securities, including securities in which Archetype Wealth Partners' Supervised Persons may invest, the Firm generally does so in accordance with applicable rules promulgated under the Advisers Act and no-action guidance provided by the staff of the U.S. Securities and Exchange Commission. Archetype Wealth Partners does not receive any additional compensation or remuneration as a result of the aggregation.
In the event that the Firm determines that a prorated allocation is not appropriate under the particular circumstances, the allocation will be made based upon other relevant factors, which may include: (i) when only a small percentage of the order is executed, shares may be allocated to the account with the smallest order or the smallest position or to an account that is out of line with respect to security or sector weightings relative to other portfolios, with similar mandates; (ii) allocations may be given to one account when one account has limitations in its investment guidelines which prohibit it from purchasing other securities which are expected to produce similar investment results and can be purchased by other accounts; (iii) if an account reaches an investment guideline limit and cannot participate in an allocation, shares may be reallocated to other accounts (this may be due to unforeseen changes in an account's assets after an order is placed); (iv) with respect to sale allocations, allocations may be given to accounts low in cash; (v) in
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cases when a pro rata allocation of a potential execution would result in a de minimis allocation in one or more accounts, the Firm may exclude the account(s) from the allocation; the transactions may be executed on a pro rata basis among the remaining accounts; or (vi) in cases where a small proportion of an order is executed in all accounts, shares may be allocated to one or more accounts on a random basis.
Item 13. Review of Accounts
Account Reviews
Archetype Wealth Partners monitors client portfolios on a continuous and ongoing basis while regular account reviews are conducted on at least a quarterly basis. Such reviews are conducted by the Firm's investment adviser representatives. All investment advisory clients are encouraged to discuss their needs, goals and objectives with Archetype Wealth Partners and to keep the Firm informed of any changes thereto. The Firm contacts ongoing investment advisory clients at least annually to review its previous services and/or recommendations and quarterly to discuss the impact resulting from any changes in the client's financial situation and/or investment objectives.
Account Statements and Reports
Clients are provided with transaction confirmation notices and regular summary account statements directly from the Financial Institutions where their assets are custodied. From time-to-time or as otherwise requested, clients may also receive written or electronic reports from Archetype Wealth Partners and/or an outside service provider, which contain certain account and/or market-related information, such as an inventory of account holdings or account performance. Clients should compare the account statements they receive from their custodian with any documents or reports they receive from Archetype Wealth Partners or an outside service provider.
Item 14. Client Referrals and Other Compensation
Client Referrals
In the event a client is introduced to Archetype Wealth Partners by either an unaffiliated or an affiliated solicitor, the Firm may pay that solicitor a referral fee in accordance with applicable state securities laws. Unless otherwise disclosed, any such referral fee is paid solely from Archetype Wealth Partners' investment management fee and does not result in any additional charge to the client. If the client is
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Disclosure Brochure
Archetype Wealth Partners, LLC
introduced to the Firm by an unaffiliated solicitor, the solicitor is required to provide the client with Archetype Wealth Partners' written brochure(s) and a copy of a solicitor's disclosure statement containing the terms and conditions of the solicitation arrangement. Any affiliated solicitor of Archetype Wealth Partners is required to disclose the nature of his or her relationship to prospective clients at the time of the solicitation and will provide all prospective clients with a copy of the Firm's written brochure(s) at the time of the solicitation.
Item 15. Custody
The Advisory Agreement and/or the separate agreement with any Financial Institution generally authorize Archetype Wealth Partners and/or the Independent Managers to debit client accounts for payment of the Firm's fees and to directly remit that those funds to the Firm in accordance with applicable custody rules. The Financial Institutions that act as the qualified custodian for client accounts, from which the Firm retains the authority to directly deduct fees, have agreed to send statements to clients not less than quarterly detailing all account transactions, including any amounts paid to Archetype Wealth Partners.
In addition, as discussed in Item 13, Archetype Wealth Partners may also send periodic supplemental reports to clients. Clients should carefully review the statements sent directly by the Financial Institutions and compare them to those received from Archetype Wealth Partners.
Item 16. Investment Discretion
Archetype Wealth Partners may be given the authority to exercise discretion on behalf of clients. Archetype Wealth Partners is considered to exercise investment discretion over a client's account if it can effect and/or direct transactions in client accounts without first seeking their consent. Archetype Wealth Partners is given this authority through a power-of-attorney included in the agreement between Archetype Wealth Partners and the client. Clients may request a limitation on this authority (such as certain securities not to be bought or sold). Archetype Wealth Partners takes discretion over the following activities:
· The securities to be purchased or sold;
· The amount of securities to be purchased or sold;
· When transactions are made; and
· The Independent Managers to be hired or fired.
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Disclosure Brochure
Archetype Wealth Partners, LLC
Item 17. Voting Client Securities
Declination of Proxy Voting Authority
Archetype Wealth Partners generally does not accept the authority to vote a client's securities (i.e., proxies) on their behalf. Clients receive proxies directly from the Financial Institutions where their assets are custodied and may contact the Firm at the contact information on the cover of this brochure with questions about any such issuer solicitations.
Item 18. Financial Information
Archetype Wealth Partners is not required to disclose any financial information due to the following: · The Firm does not require or solicit the prepayment of more than $1,200 in fees six months or more in advance of services rendered; · The Firm does not have a financial condition that is reasonably likely to impair its ability to meet contractual commitments to clients; and
· The Firm has not been the subject of a bankruptcy petition at any time during the past ten years.
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