Introduction: Feldman, Ingardona & Co. (the “Firm”) is a registered investment adviser with the U.S. Securities and Exchange Commission (“SEC”) privately owned by William M. Feldman, Chairman & Chief Executive Officer, Alex M. Ingardona, President & Chief Operating Officer and Timothy M. Hart, Vice President. The Firm is also registered as a general securities broker-dealer with the SEC and member of the Financial Industry Regulatory Authority, the Securities Industry Protection Corporation, a Municipal Securities Rulemaking Board registrant and an Illinois Department of Insurance licensed business entity. You should be aware that services and fees differ between investment advisers and broker-dealers and it is important for retail investors to understand the differences. Free and simple tools are available for you to research firms and financial professionals at www.Investor.gov/CRS, a website maintained by the SEC. These tools can provide you with educational materials about broker-dealers, investment advisers, and investing in general.
What investment services and advice can you provide me?
Our firm provides both discretionary and non-discretionary investment advisory services for portfolios of high net worth individuals and families, institutions, pension and profit-sharing plans, trusts and business entities. These services focus on the entire process of portfolio management by working with the client to organize the portfolio and develop an overall strategy to address the needs and investment objectives for the portfolio. The strategy includes a long-term strategic asset allocation, selection of investment managers and mutual funds to be used in the portfolio and performance measures according to which the overall portfolio and all investments for the portfolio will be monitored. The strategy is tailored to the individual needs and objectives of each client relationship. As such, you may impose restrictions on investing in certain securities or types of securities that will be incorporated into the overall strategy.
We focus on the entire process of portfolio management by working with you to organize the portfolio and develop an overall strategy to address the needs and investment objectives for the portfolio. The strategy includes (1) a determination of the long-term strategic asset allocation for the portfolio, (2) the decision of whether to vary the asset allocation over shorter time periods, (3) the selection of the best and most cost effective method to achieve the asset class returns incorporated in the long-term strategic asset allocation and (4) a comprehensive report to measure the portfolio’s investment performance against benchmark returns.
Client investment portfolios are reviewed at a minimum of once a quarter by our firm’s officers, Mr. Feldman, Mr. Ingardona and Mr. Hart. Market conditions that might cause a wide variance in the overall asset allocation, or other factors, could cause a more frequent review.
For additional information, please review our Form ADV Part 2A Brochure (Items 4 and 7) which is available on the SEC’s website at www.adviserinfo.sec.gov or requesting a copy from us by calling the number noted above.
What fees will I pay?
The specific manner in which fees are charged by us is established in a client’s written investment advisory agreement. Generally, the fee will be payable quarterly in advance. Although minimum investment varies depending on the type of client and extent of services, generally the minimum account size is $5,000,000. The first payment is due and payable upon execution of the advisory agreement and will be assessed pro-rata in the event the agreement is executed other than the first day of the new calendar quarter. Subsequent payments are due and will be assessed on the first day of each calendar quarter based on the value of the portfolio as of the last day of the previous calendar quarter. If termination occurs prior to the end of a calendar quarter, a pro-rata refund of unearned fees will be made to the client.
Fees may be paid direct by the client, or the client may authorize the custodian holding client funds and securities to deduct advisory fees direct from the client account in accordance with statements prepared and submitted to the custodian by us. The custodian will provide periodic account statements to the client. Such statements will reflect all fee withdrawals by us. It is the client’s responsibility to verify the accuracy of the fee calculation. The custodian will not determine whether the fee is properly calculated.
In certain circumstances, advisory fees may be negotiated and may differ among clients based upon a number of factors, such as the number of investing entities or accounts in the investment portfolio and the complexity of the overall investment strategy.
In addition to fees paid to our firm for advisory services, with respect to a client’s investments in mutual funds, clients pay additional fees on the mutual fund investment because the mutual funds also pay advisory and/or management fees to their investment advisor.
You will pay fees and costs whether you make or lose money on investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying. For additional information about our fees, please review our Form ADV Part 2A Brochure (Item 5) which is available on the SEC’s website at www.adviserinfo.sec.gov
What are your legal obligations to me when acting as my investment adviser? How else does your firm make money and what conflicts of interest do you have?
When we act as your investment adviser, we have to act in your best interest and not put our interests ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the investment advice we provide you. Here are instances to help you understand what this means.
As broker-dealer, our firm has a correspondent clearing relationship with National Financial Services, LLC (“NFS”), a Fidelity Investments company, to introduce client accounts pursuant to a clearing and executing services agreement. You may use NFS as custodian for your portfolio assets but are not obligated to do so. As such, we receive commissions and fees charged to the client account on transactions executed and/or cleared through NFS. We may also receive service, administrative, or other fees (e.g. 12b-1 fees) from other investment advisors or in connection with the distribution or sale of mutual fund shares that we recommend. Thus, a conflict of interest exists between our interests and those of our advisory clients. In order to address this conflict of interest, we disclose our correspondent relationship in the advisory agreement and include a schedule of commissions and fees to be charged to the client account for trades executed through NFS. The pricing for the client fee schedule is set to offset the clearing costs that NFS charges us so that we derive very little net compensation from executing client trades. More importantly, our dual registration allows us to state in our advisory agreement that our client’s advisory fee will be reduced by any service, administrative or other fees estimated to be received by us in connection with mutual fund shares held in the portfolio. Mutual funds recommended under advisory services will generally be “no-load” or “load-waived.” If any mutual fund or insurance commissions or “loads” are collected by us, we will disclose to our client and in turn reduce the client advisory fee by that amount on a dollar-for-dollar basis. Clients are not obligated to use the services of the investment managers, mutual funds or securities recommended or to purchase investment products either through us or through NFS.
Another instance is that our firm is compensated based on the value of the accounts we manage. As a result, to the extent that we manage more of your assets, we would benefit by receiving higher investment advisory fees.
For additional information, please see our Form ADV Part 2A Brochure on the SEC’s website at www.adviserinfo.sec.gov.
How do your financial professionals make money?
Our financial professionals are compensated based on our firm’s overall performance of fees received from all clients less expenses. Compensation is in the form of a base salary and distributions according to the ownership interest of the Firm.
Do you or your financial professionals have legal or disciplinary history?
No. Please visit www.Investor.gov/CRS, for a free and simple tool to research our Firm and financial professionals.
You can always contact us for up-to-date information and a copy of this relationship summary at (630) 663-1800 or find additional information about our advisory services on the SEC’s website at www.adviserinfo.sec.gov.
Below are conversation starters for questions to ask us:
- Given my financial situation, should I choose an investment advisory service? Why or why not?
- How will you choose investments to recommend to me?
- What is your relevant experience, including your licenses, education, and other qualifications? What do these qualifications mean?
- Help me understand how these fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?
- How might your conflicts of interest affect me, and how will you address them?
- As a financial professional, do you have any disciplinary history? For what type of conduct?
- Who is my primary contact person? Is he or she a representative of an investment adviser or a broker-dealer? Who can I talk to if I have concerns about how this person is treating me?