♦What is a Registered Investment Advisor? A Registered Investment Advisor is a firm or individual, registered with the Securities and Exchange Commission or with a state, that provides investment advice to others on a professional basis for compensation. Heritage is registered as an Investment Advisor. When we act as your Investment Advisor, we are held to a fiduciary standard. This means we have to act in your best interest and not put our interest ahead of yours.
♦What is a CFP®? A CFP®, or CERTIFIED FINANCIAL PLANNERTM, is a professional who has met certain qualifications as established by the Certified Financial Planner Board of Standards. There are four specific requirements CFP® certificants must meet: Experience, Education, Examination, and Ethics. Certificants are expected to act with honesty, integrity, competence and diligence when working with clients.
♦What types of services do you offer? Our primary service is providing investment advice to our clients. The structure of our business gives clients the ability to trade in various types of securities without incurring separate brokerage commissions. Additionally, if and when requested, we may also provide limited financial planning advice, such as retirement and college savings plan analysis. Please note: The scope of any financial planning and consulting advice to be provided depends upon the specific requests and needs of the client. Heritage does not serve as an attorney, accountant, or insurance agent. Heritage does not prepare legal documents or tax returns, nor does it sell insurance products.
♦How are you compensated? Most of our accounts are managed within a Wrap Fee Program. Each Wrap Fee Account is charged a fee quarterly, in advance, based upon the market value of the assets in the account as reported by the account custodian on the last day of the previous quarter. The fee ranges from 0.75% to 1.50% of the assets under management and is negotiable. Heritage Asset Advisors Ltd., LLP is then responsible for paying the account custodian an asset-based fee for custody and trading expenses. This arrangement allows the client to receive both investment advisory services and the execution of transactions in eligible securities for a single, combined annualized fee. A summary of our fees is available in the Document Library on the Important Disclosures section of our website.
♦Will there be any other costs?
In addition to the quarterly Wrap Fee deducted by Heritage, clients will pay the custodian directly for any wire or margin expenses. Heritage typically invests client assets in mutual funds. Mutual funds impose additional fees and expenses that reduce the value of your investment.
♦Should I choose a Wrap Fee Program? What are my other options?
We recommend our Wrap Fee Program to clients who want investment advice and the ability to trade without paying separate transaction fees per trade. We provide ongoing investment advice and monitoring for these accounts and have discretionary authority to buy or sell investments without the client's consent for each trade. Clients are contacted regularly and encouraged to contact us as well at any time. This type of account is typically more expensive than other asset-based advisory accounts because the fee includes the portion payable by Heritage to the custodian. You may be able to pay less by choosing an advisor &/or custodian who allows you to pay for investment advice, trading expenses and custody separately.
There are some financial situations in which a Wrap Fee Account would be inappropriate. For example:
(1) A retail investor is unable or unwilling to tolerate any risk at all and would be better off choosing a risk-free investment.
(2) A retail investor has the option to choose an employer's retirement plan that offers a better rate of return or terms than we can provide.
(3) A retail investor needs advice only on a one time basis and does not require ongoing investment advisory services.
Our firm does not generally seek to offer new accounts outside of our Wrap Fee Program. A limited number of existing clients do participate in an Hourly Consulting Arrangement, where they can pay an hourly rate for investment advice on a one-time or as-needed basis. These accounts are not monitored on a regular basis and the client will be responsible for making the ultimate decision regarding the purchase or sale of investments.
♦Do you have any conflicts of interest?
Asset-based advisory fees create a conflict of interest in that the more assets you have in an account, the more you will pay us in fees. This gives us an incentive to encourage you to increase the assets in your accounts with us. Before opening a new account with us or adding new funds to an existing account, you should evaluate whether the fee structure is appropriate for your individual financial situation and objectives. We will always discuss these issues before opening a new account and you are encouraged to ask questions or express concerns at any time. We are mindful of our fiduciary duty and careful to act in our client's best interest at all times. As noted above, there are situations in which it would not be in your best interest to open an account with us. You should make sure you understand the services, fees, and conflicts of interest involved before opening any new financial accounts.
♦Who will maintain control of my assets and where will they be held?
Client accounts are held at an outside qualified custodian. In recommending a custodian, Heritage considers the range and quality of the products the custodian offers, the technical support provided, execution quality, commission rates, the financial responsibility and responsiveness of the custodian to both the firm and its clients. We are granted the authority to deduct quarterly fees and trade on the client's behalf through a limited power of attorney. Beyond these authorizations, we do not have any access to client assets.
♦What is a Relationship Summary?
Beginning in the summer of 2020, all registered investment advisors and registered broker dealers are required to file a Relationship Summary (also known as Form CRS) with the Securities and Exchange Commission and deliver it to current and prospective clients. The Relationship Summary can help you learn more about and compare the services, costs, conflicts of interest, standard of conduct and disciplinary history (if any) of investment advisors &/or broker dealers. Additional information and easy-to-use tools are available at the SEC's CRS website. Our most current Relationship Summary is available on our website.
♦Who can I call if I have additional questions about this information or about my account?
You can call our office at any time, at no charge. Clients are encouraged to contact us as needed and to notify us of any changes in their financial status or investment objectives as soon as possible.
♦Can I view my account online? Yes. Online account access is available through each individual custodian. Please contact us directly if you have questions about who your custodian is or how to set up online services with them.