Form ADV Part 2A - Firm Brochure - March 2019 · ADV Part 2A – Firm Brochure Page 2 The Dala...

Item1:CoverPage

Part2AofFormADV:FirmBrochureMarch2019

TheDalaGroup,LLC

2815ForbsAve,Suite107HoffmanEstates,IL60192www.TheDalaGroup.com

FirmContact:

MichaelHeatwoleChiefComplianceOfficer

This brochure provides information about the qualifications and business practices of The DalaGroup,LLC.Ifclientshaveanyquestionsaboutthecontentsofthisbrochure,pleasecontactusat847-532-5335.TheinformationinthisbrochurehasnotbeenapprovedorverifiedbytheUnitedStates Securities and Exchange Commission or by any State Securities Authority. Additionalinformation about our firm is also available on the SEC’swebsite atwww.adviserinfo.sec.gov bysearchingCRD#291828.Pleasenote that theuse of the term “registered investment adviser” anddescription of our firmand/orourassociatesas“registered”doesnotimplyacertainlevelofskillortraining.ClientsareencouragedtoreviewthisBrochureandBrochureSupplementsforourfirm’sassociateswhoadviseclientsformoreinformationonthequalificationsofourfirmandouremployees.

ADVPart2A–FirmBrochure Page2 TheDalaGroup,LLC

Item2:MaterialChanges

TheDalaGroup,LLCisrequiredtomakeclientsawareofinformationthathaschangedsincethelastannualupdatetotheFirmBrochure(“Brochure”)andthatmaybeimportanttothem.Clientscanthendeterminewhethertoreviewthebrochureinitsentiretyortocontactuswithquestionsaboutthechanges.NomaterialchangeshavebeenmadesincethelastupdateoftheFirmBrochure.


Item3:TableofContents

Item1:CoverPage.....................................................................................................................................................................1Item2:MaterialChanges........................................................................................................................................................2Item3:TableofContents........................................................................................................................................................3Item4:AdvisoryBusiness......................................................................................................................................................4Item5:Fees&Compensation...............................................................................................................................................8Item6:Performance-BasedFees&Side-By-SideManagement............................................................................9Item7:TypesofClients&AccountRequirements...................................................................................................10Item8:MethodsofAnalysis,InvestmentStrategies&RiskofLoss.................................................................10Item9:DisciplinaryInformation......................................................................................................................................17Item10:OtherFinancialIndustryActivities&Affiliations..................................................................................17Item11:CodeofEthics,ParticipationorInterestin...............................................................................................18Item12:BrokeragePractices.............................................................................................................................................19Item13:ReviewofAccountsorFinancialPlans.......................................................................................................23Item14:ClientReferrals&OtherCompensation.....................................................................................................23Item15:Custody.....................................................................................................................................................................24Item16:InvestmentDiscretion........................................................................................................................................25Item17:VotingClientSecurities......................................................................................................................................25Item18:FinancialInformation.........................................................................................................................................25Item19:RequirementsforState-RegisteredAdvisers...........................................................................................26


Item4:AdvisoryBusiness

Our firm is dedicated to providing individuals and other types of clients with a wide array ofinvestmentadvisoryservices.OurfirmisalimitedliabilitycompanyformedunderthelawsoftheStateofIllinoisin2018andhasbeeninbusinessasaninvestmentadvisersincethattime.OurfirmiswhollyownedbyMichaelHeatwole. ThepurposeofthisBrochureistodisclosetheconflictsofinterestassociatedwiththeinvestmenttransactions,compensationandanyothermattersrelatedtoinvestmentdecisionsmadebyourfirmoritsrepresentatives.Asafiduciary,itisourdutytoalwaysactintheclient’sbestinterest.Thisisaccomplished inpartbyknowingourclient.Our firmhasestablishedaservice-orientedadvisorypracticewithopen linesof communication formanydifferent typesof clients tohelpmeet theirfinancialgoalswhileremainingsensitivetorisktoleranceandtimehorizons.Workingwithclientstounderstandtheirinvestmentobjectiveswhileeducatingthemaboutourprocess,facilitatesthekindofworkingrelationshipwevalue.TypesofAdvisoryServicesOfferedFinancialPlanning&Consulting:

Ourfirmprovidesavarietyofstandalonefinancialplanningandconsultingservicestoclientsforthemanagementoffinancialresourcesbaseduponananalysisofcurrentsituation,goals,andobjectives.Financialplanningserviceswill involvepreparingafinancialplanforclientsbasedontheclient’sfinancialgoalsandobjectives.Thisplanningmayencompassoneormoreofthefollowingareas:CashFlow & Debt Analysis, Investment Planning, Retirement Planning, Estate Planning, CharitablePlanning, EducationPlanning, Corporate andPersonalTaxPlanning, InsuranceAnalysis, Lines ofCreditEvaluation,orBusinessandPersonalFinancialPlanning.

• Cash Flow&Debt Analysis: This involves advicewith respect to cash accounts, financialobligations,andcashmanagement.

o Theestimatednumberofhoursrequiredtorendera formal financialplan for thisservicerangesfrom1hoursto4hours.Thisisonlyanestimate,andthenumberofhours required may fluctuate according to the scope and complexity of theengagement.

• InvestmentPlanning:Thisinvolvesadvicewithrespecttoassetselectionandallocation,as

wellasinvestmentincomeaccumulationtechniques.Evaluationsaremadeofexistingand,whenapplicable,potentialinvestmentsintermsoftheireconomicandtaxcharacteristicsaswellastheirsuitabilityformeetingclient’sobjectives.Taxconsequencesandtheirimplicationsareidentifiedandevaluatedingeneralterms.



• RetirementPlanning: This involvesadvicewithrespect toalternativesand techniques foraccumulatingwealthforretirementincomeoradvicerelativetoappropriatedistributionsofassetsfollowingretirement.Taximplicationsandconsequencesareidentifiedandevaluatedingeneralterms.


• EstatePlanning: Thisserviceinvolvesadvicewithrespecttopropertyownership,

distributionstrategies,estatetaxreduction,andtaxpaymenttechniques.Itinvolvesadiscussionofgifts,trusts,etc.andthedispositionofbusinessinterests.Taxconsequencesandtheirimplicationsareidentifiedandevaluated.AttherequestoftheClient,ourfirmwillengagetheclient’schosenpersonalestateattorneyorplanner,withregardtoadvisingthewealthmanagementoftheestateplanning.


• Charitable Planning: This includes the incorporation of charitable giving into a client’s

financialplanthatmaximizesphilanthropic,tax,andlegacyplanninggoals.o Theestimatednumberofhoursrequiredtorendera formal financialplan for this

servicerangesfrom1hoursto6hours.Thisisonlyanestimate,andthenumberofhours required may fluctuate according to the scope and complexity of theengagement.

• EducationPlanning:Thisincludesalternativesandstrategieswithrespecttothecompleteor

partialfundingofcollegeorotherpost-secondaryeducationexperience.Taxconsequencesandtheirimplicationsareidentifiedandevaluatedingeneralterms.


• CorporateandPersonalTaxPlanning:Taxplanningisreferredtotheclient’schosenpersonal

tax advisor. Our firm may offer advice as to how tax laws may affect various financialdecisions,e.g.acquisitions,pensionstrategy,investinginnewopportunitiesorconsolidationofexistinginvestments,andindividualtaxationissues,amongothers.


• InsuranceAnalysis: Thisincludesriskmanagementassociatedwithadvisory

recommendationsbasedonthecombinationofinsurancetypesthatbestmeetaclient’sspecificneeds,e.g.life,health,disability,andlong-termcare,andothersasappropriate.

o Theestimatednumberofhoursrequiredtorendera formal financialplan for thisservicerangesfrom1hoursto2hours.Thisisonlyanestimate,andthenumberof


hours required may fluctuate according to the scope and complexity of theengagement.

• LinesofCreditEvaluation:Thisserviceincludesanevaluationoftheclient’saccesstolinesof

credit,theirapplicabilityasameanstoraisefundswhenthesumrequiredisunknown,andacostbenefitanalysistodeterminewhetheropeningalineofcreditwouldbeadvisablegiventheindividualscurrentfinancialgoals.


• BusinessandPersonalFinancialPlanning:ThisserviceinvolvesananalysisofClient’scash

flow, theirbusiness’cash flowwhereapplicable,andcombinedtax liabilities.Thisservicemay extend to incorporate other financial planning services stated above to determine abetterbalancebetweentheclient’spersonalandprofessionalenterprises.


Writtenfinancialplansrenderedtoclientsusuallyincludegeneralrecommendationsforacourseofactivityorspecificactionstobetakenbytheclients.Implementationoftherecommendationswillbeatthediscretionoftheclient.Ourfirmprovidesclientswithasummaryoftheirfinancialsituation,andobservationsforfinancialplanningengagements.Ifalltheinformationanddocumentsrequestedfrom the client are provided promptly, plans or consultations are typically completed within 6monthsoftheclientsigningacontractwithourfirm.FinancialConsultationservicesrenderedtoourclientswillusuallyincludegeneralrecommendationsforacourseofactivity,orspecificactionstobetakenbytheclients,andincludeindividuallytailoredfinancial advice. Recommendations may be made that will cover similar subject matter as thefinancialplanningserviceslistedabove.Itshouldalsobenotedthatwereferclientstoanaccountant,attorneyorotherspecialist,asnecessaryfornon-advisoryrelatedservices.Forfinancialconsultingengagements,weusuallydonotprovideourclientswithawrittensummaryofourobservations.Consultationsaretypicallycompletedwithinsix(6)monthsoftheclientsigningacontractwithus,assuming that all the information and documentswe request from the client are provided to uspromptly.Implementationoftherecommendationswillbeatthediscretionoftheclient.RetirementPlanConsulting:

Our firmprovides retirement plan consulting services to employer plan sponsors on an ongoingbasis.Generally,suchconsultingservicesconsistofassistingemployerplansponsorsinestablishing,monitoringandreviewingtheircompany'sparticipant-directedretirementplan.Astheneedsoftheplan sponsor dictate, areas of advising could include: investment options, plan structure andparticipanteducation.RetirementPlanConsultingservicestypicallyinclude:

• EstablishinganInvestmentPolicyStatement–Ourfirmwillassistinthedevelopmentofastatement that summarizes the investment goals and objectives along with the broadstrategiestobeemployedtomeettheobjectives.

• Investment Options – Our firm will work with the Plan Sponsor to evaluate existinginvestmentoptionsandmakerecommendationsforappropriatechanges.


• AssetAllocationandPortfolioConstruction–OurfirmwilldevelopstrategicassetallocationmodelstoaidParticipantsindevelopingstrategiestomeettheirinvestmentobjectives,timehorizon,financialsituationandtoleranceforrisk.

• InvestmentMonitoring – Our firmwill monitor the performance of the investments andnotifytheclientintheeventofover/underperformanceandintimesofmarketvolatility.

• Employee Communications – For pension, profit sharing and 401(k) plan clients withindividual plan participants exercising control over assets in their own account (''self-directed plans''), we may also provide educational support and investment workshopsdesignedfortheplanparticipantswhentheplansponsorengagesourfirmtoprovidetheseservices.ThenatureofthetopicstobecoveredwillbedeterminedbyusandtheclientundertheguidelinesestablishedinERISASection404(c).Theeducationalsupportandinvestmentworkshops will NOT provide plan participants with individualized, tailored investmentadvice or individualized, tailored asset allocation recommendations. Individuals seekingindividualizedadvicemayrequestprivateconsultation(eitherbytelephoneorinperson),duringwhichspecificinvestmentstrategiesmaybediscussed.Theimplementationofanyorallrecommendationsissolelyatthediscretionoftheparticipant,unlessaseparateadvisoryagreementhasbeenimplementedbetweentheparticipantandtheadvisor.

Inprovidingservicesforretirementplanconsulting,ourfirmdoesnotprovideany advisoryserviceswithrespecttothefollowingtypesofassets:employersecurities,realestate (excludingrealestatefundsandpubliclytradedREITS),participantloans,non-publiclytraded securities or assets,otherilliquidinvestments,orbrokeragewindowprograms (collectively,“ExcludedAssets”).Allretirementplanconsultingservicesshallbeincompliancewiththeapplicablestatelawsregulatingretirementconsultingservices.Thisapplies toclientaccounts thatareretirementorotheremployeebenefitplans (“Plan”) governed by the Employee Retirement Income Security Act of 1974, as amended(“ERISA”). If the client accounts arepart of aPlan, andour firmaccepts appointment toprovideservicestosuchaccounts,ourfirmacknowledgesitsfiduciarystandardwithinthemeaningofSection3(21)or3(38)ofERISAasdesignatedbytheRetirementPlanConsultingAgreementwithrespecttotheprovisionofservicesdescribedtherein.TailoringofAdvisoryServices

General investmentadvicewillbeofferedtoourFinancialPlanning&ConsultingandRetirementPlanConsulting.

ParticipationinWrapFeeProgramsOurfirmoffersandsponsorsawrapfeeprogram.ComprehensivePortfolioManagementservicesareonlyofferedthroughwrappedaccounts,whicharemanagedonanindividualizedbasisaccordingtotheclient’sinvestmentobjectives,financialgoals,risktolerance,etc.PleaseseeourPart2A,Appendix1(the“WrapFeeProgramBrochure”)formoreinformation.RegulatoryAssetsUnderManagementOurfirmmanages$28,868,511onadiscretionarybasisand$2,576,139onanon-discretionarybasisasofMarch2019.


Item5:Fees&Compensation

CompensationforOurAdvisoryServicesFinancialPlanning&Consulting:We chargeonanhourlyor flat feebasis for financialplanningand consulting services.The totalestimatedfee,aswellastheultimatefeethatwechargeyou,isbasedonthescopeandcomplexityofourengagementwithyou.Ourhourlyfeesare$275andourflatfeesrangefrom$1,800to$5,500.

Werequirearetaineroffifty-percent(50%)oftheultimatefinancialplanningorconsultingfeewiththeremainderofthefeedirectlybilledtoyouandduetouswithinthirty(30)daysofyourfinancialplanbeingdeliveredorconsultationrenderedtoyou.Wewillnotrequirearetainerexceeding$500whenservicescannotberenderedwithin6(six)months.

HourlyFees:Ourhourlyfeesarenegotiable,andwillnotexceed$275.Projectsspanningmorethanthreemonthswillbebilledquarterly.Theitemsaddressedinamodularplanorgeneralconsultingservicesmayincludeoneormoreoftheserviceslistedabove.Theamountoftimespentwilldependon the complexity of the request and all serviceswill be completedwithin sixmonths. The totalnumber of hours will be estimated prior to the engagement and will be specified in our firm’sFinancialPlanning&ConsultingAgreementforhourlyservices.Theclientwillbeinvoiceddirectlyforhourlyfees.

• Example:Aclientmeetswithourfirmtodiscussbasicfinancialconsultingissuesandseeks

generalinvestmentadvicerelatingtobroadissuessuchasretirementplanningandeducationplanning.Themeetinglasts2hoursandfollowupresearchtakes2hours.At$275perhour,theclientwouldbechargeda$550retainerfeeatthetimeoftheinitialmeeting(275x2hours)andanadditional$550uponcompletionoftheengagement($275x2hours).Ourfirmwillperformallfinancialconsultingworkbeforesixmonthsexpire.

FixedFees:Ourfixedfeesarenegotiable,andwillnotexceed$4800.Dependingoncircumstances,feesforFinancialPlanning&ConsultingServicesareofferedtoclientsforsmallconsultingprojectsoraspartofanannualretainerprogram.Suchservicesincludeanycombinationoftheabove-listedservices, periodic reviews, revisions/updates to the financial plan, and day-to- day consulting asrequired.Fixedfeesmayrequire50%astheinitialretainerandthebalancedueuponcompletion.

• Example:Aclientwithlimitedfinancialinvestinghistoryandmodestassetswhocontracts

withourfirmforasingleservicelistedabovewouldbechargedafeeof$2,400,becauseoflimiteddocumentreviewandfewerconsultingoptions.AclientwithmaximumcomplexitywhocontractedBridgewaterAssetManagementLLCforallserviceslistedabovewhichmayrequire forty ormorehours ofAdviser’s timewould be charged an annual service fee of$4,800. Adviserwill outline a six-month service plan and charge client 50% as an initialretainer.Adviser’sserviceswillbecompletedwithinsixmonths

Eitherpartymay terminate theFinancialPlanning&Consultingserviceatany timebyprovidingwritten notice. For purposes of calculating refunds, allwork performed by us up to the point of


terminationshallbecalculatedatourhourlyfeecurrentlyineffect.Youwillreceiveapro-ratarefundofunearnedfeesbasedonthetimeandeffortexpendedbyourfirmandPlanner.RetirementPlanConsulting:

AssetsUnderManagement Annual%$0 to $1,000,000 0.75

$1,000,000 to $5,000,000 0.3Over$5,000,000 0.25

As an example, a plan with $2,500,000 in Assets Under Management may be charged 0.75% on the first $1,000,000 of Assets, and 0.3% on the final $1,500,000 of Assets. OurRetirementPlanConsultingservicesarebilledonafeebasedonthepercentageofPlanassetsundermanagement.Thetotalestimatedfee,aswellastheultimatefeecharged,isbasedonthescopeandcomplexityofourengagementwiththeclient.Thefee-payingarrangementswillbedeterminedonacase-by-casebasisandwillbedetailedinthesignedconsultingagreement.OtherTypesofFees&Expenses

Wrapclientswillnotincurtransactioncostsfortradesbytheirchosencustodian.MoreinformationaboutthiscanbefoundinourseparateWrapFeeProgramBrochure.Termination&RefundsFinancial Planning & Consulting clients may terminate their agreement at any time before thedeliveryofafinancialplanbyprovidingwrittennotice.Forpurposesofcalculatingrefunds,allworkperformedbyusuptothepointofterminationshallbecalculatedatthehourlyfeecurrentlyineffect.Clientswillreceiveapro-ratarefundofunearnedfeesbasedonthetimeandeffortexpendedbyourfirm.Eitherparty toaRetirementPlanConsultingAgreementmay terminateatany timebyprovidingwrittennoticetotheotherparty.Fullrefundswillonlybemadeincaseswherecancellationoccurswithin5businessdaysofsigninganagreement.After5businessdays from initial signing,eitherpartymustprovidetheotherparty30dayswrittennoticetoterminatebilling.Billingwillterminate30daysafterreceiptofterminationnotice.Clientswillbechargedonapro-ratabasis,whichtakesintoaccountworkcompletedbyourfirmonbehalfoftheclient.Clientswillincurchargesforbonafideadvisoryservicesrendereduptothepointoftermination(determinedas30daysfromreceiptofsaidwrittennotice)andsuchfeeswillbedueandpayable.CommissionableSecuritiesSalesOurfirmandrepresentativesdonotsellsecuritiesforacommissioninadvisoryaccounts.

Item6:Performance-BasedFees&Side-By-SideManagement

Ourfirmdoesnotchargeperformance-basedfees.


Item7:TypesofClients&AccountRequirements

Ourfirmhasthefollowingtypesofclients:

• IndividualsandHighNetWorthIndividuals;• CharitableOrganizations;• PensionandProfitSharingPlans;• Corporations,LimitedLiabilityCompaniesand/orOtherBusinessTypes

Ourfirmdoesnotimposerequirementsforopeningandmaintainingaccountsorotherwiseengagingus.

Item8:MethodsofAnalysis,InvestmentStrategies&RiskofLoss

MethodsofAnalysisWeusethefollowingmethodsofanalysis informulatingour investmentadviceand/ormanagingclientassets:FundamentalAnalysis:Theanalysisof abusiness's financial statements (usually to analyze thebusiness'sassets,liabilities,andearnings),health,anditscompetitorsandmarkets.Whenanalyzingastock,futurescontract,orcurrencyusingfundamentalanalysistherearetwobasicapproachesonecanuse:bottomupanalysisandtopdownanalysis.Thetermsareusedtodistinguishsuchanalysisfromothertypesofinvestmentanalysis,suchasquantitativeandtechnical.Fundamentalanalysisisperformedonhistoricalandpresentdata,butwiththegoalofmakingfinancialforecasts.Thereareseveralpossibleobjectives:(a)toconductacompanystockvaluationandpredictitsprobablepriceevolution;(b)tomakeaprojectiononitsbusinessperformance;(c)toevaluateitsmanagementandmake internal business decisions; (d) and/or to calculate its credit risk.; and (e) to find out theintrinsicvalueoftheshare.Whentheobjectiveoftheanalysisistodeterminewhatstocktobuyandatwhatprice,therearetwobasicmethodologies investors rely upon: (a) Fundamental analysismaintains thatmarketsmaymispriceasecurityintheshortrunbutthatthe"correct"pricewilleventuallybereached.Profitscanbemade by purchasing themispriced security and thenwaiting for themarket to recognize its"mistake" and re-price the security.; and (b) Technical analysismaintains that all information isreflected already in the price of a security. Technical analysts analyze trends and believe thatsentiment changes predate and predict trend changes. Investors' emotional responses to pricemovements lead to recognizable price chart patterns. Technical analysts also analyze historicaltrends to predict future price movement. Investors can use one or both of these different butcomplementarymethodsforstockpicking.Thispresentsapotentialrisk,asthepriceofasecuritycanmoveupordownalongwiththeoverallmarketregardlessoftheeconomicandfinancialfactorsconsideredinevaluatingthestock.QuantitativeAnalysis:Theuse ofmodels, or algorithms, to evaluate assets for investment. Theprocessusuallyconsistsofsearchingvastdatabasesforpatterns,suchascorrelationsamongliquid


assetsorprice-movementpatterns(trendfollowingormeanreversion).Theresultingstrategiesmayinvolve high-frequency trading. The results of the analysis are taken into consideration in thedecisiontobuyorsellsecuritiesandinthemanagementofportfoliocharacteristics.Ariskinusingquantitativeanalysisisthatthemethodsormodelsusedmaybebasedonassumptionsthatprovetobeincorrect.QualitativeAnalysis:Asecuritiesanalysisthatusessubjectivejudgmentbasedonunquantifiableinformation,suchasmanagementexpertise,industrycycles,strengthofresearchanddevelopment,and labor relations. Qualitative analysis contrasts withquantitative analysis, which focuses onnumbersthatcanbefoundonreportssuchasbalancesheets.Thetwotechniques,however,willoftenbe used together in order to examine a company's operations and evaluate its potential as aninvestmentopportunity.Qualitativeanalysisdealswithintangible,inexactconcernsthatbelongtothesocialandexperientialrealmratherthanthemathematicalone.Thisapproachdependsonthekind of intelligence thatmachines (currently) lack, since things like positive associationswith abrand, management trustworthiness, customer satisfaction, competitive advantage and culturalshiftsaredifficult,arguablyimpossible,tocapturewithnumericalinputs.Ariskinusingqualitativeanalysisisthatsubjectivejudgmentmayproveincorrect.Sector Analysis: Sector analysis involves identification and analysis of various industries oreconomicsectorsthatarelikelytoexhibitsuperiorperformance.Academicstudiesindicatethatthehealthofastock'ssectorisasimportantastheperformanceoftheindividualstockitself.Inotherwords,eventhebeststocklocatedinaweaksectorwilloftenperformpoorlybecausethatsectorisoutoffavor.Eachindustryhasdifferencesintermsofitscustomerbase,marketshareamongfirms,industrygrowth,competition,regulationandbusinesscycles.Learninghowtheindustryoperatesprovides a deeper understanding of a company's financial health. One method of analyzing acompany'sgrowthpotentialisexaminingwhethertheamountofcustomersintheoverallmarketisexpected togrow. Insomemarkets, there is zeroornegativegrowth,a factordemandingcarefulconsideration.Additionally,marketanalystsrecommendthatinvestorsshouldmonitorsectorsthatarenearingthebottomofperformancerankingsforpossiblesignsofanimpendingturnaround.InvestmentStrategiesWeUseWe use the following strategies in managing client accounts, provided that such strategies areappropriate to theneedsof the clientandconsistentwith the client's investmentobjectives, risktolerance,andtimehorizons,amongotherconsiderations:AssetAllocation:Theimplementationofaninvestmentstrategythatattemptstobalanceriskversusreward by adjusting the percentage of each asset in an investment portfolio according to theinvestor'srisktolerance,goalsandinvestmenttimeframe.Assetallocationisbasedontheprinciplethatdifferentassetsperformdifferentlyindifferentmarketandeconomicconditions.Afundamentaljustificationforassetallocationisthenotionthatdifferentassetclassesofferreturnsthatarenotperfectly correlated, hence diversification reduces the overall risk in terms of the variability ofreturnsforagivenlevelofexpectedreturn.Althoughriskisreducedaslongascorrelationsarenotperfect,itistypicallyforecast(whollyorinpart)basedonstatisticalrelationships(likecorrelationandvariance)thatexistedoversomepastperiod.Expectationsforreturnareoftenderivedinthesameway.Anassetclassisagroupofeconomicresourcessharingsimilarcharacteristics,suchasriskinessandreturn.Therearemanytypesofassetsthatmayormaynotbeincludedinanassetallocationstrategy.The"traditional"assetclassesarestocks(value,dividend,growth,orsector-specific[ora"blend"of


any two ormore of the preceding]; large-cap versusmid-cap, small-cap ormicro-cap; domestic,foreign[developed],emergingorfrontiermarkets),bonds(fixedincomesecuritiesmoregenerally:investment-grade or junk [high-yield]; government or corporate; short-term, intermediate, long-term;domestic,foreign,emergingmarkets),andcashorcashequivalents.Allocationamongthesethreeprovidesastartingpoint.Usuallyincludedarehybridinstrumentssuchasconvertiblebondsandpreferredstocks,countingasamixtureofbondsandstocks.Otheralternativeassetsthatmaybeconsideredinclude:commodities:preciousmetals,nonferrousmetals,agriculture,energy,others.;Commercial or residential real estate (also REITs); Collectibles such as art, coins, or stamps;insuranceproducts(annuity,lifesettlements,catastrophebonds,personallifeinsuranceproducts,etc.);derivativessuchas long-shortormarketneutralstrategies,options,collateralizeddebt,andfutures;foreigncurrency;venturecapital;privateequity;and/ordistressedsecurities.Thereareseveraltypesofassetallocationstrategiesbasedoninvestmentgoals,risktolerance,timeframes and diversification. The most common forms of asset allocation are: strategic, dynamic,tactical,andcore-satellite.

• StrategicAssetAllocation:Theprimarygoalofastrategicassetallocationistocreateanassetmixthatseekstoprovidetheoptimalbalancebetweenexpectedriskandreturnforalong-term investment horizon. Generally speaking, strategic asset allocation strategies areagnostictoeconomicenvironments,i.e.,theydonotchangetheirallocationposturesrelativetochangingmarketoreconomicconditions.

• DynamicAssetAllocation:Dynamicassetallocationissimilartostrategicassetallocationinthatportfoliosarebuiltbyallocatingtoanassetmixthatseekstoprovidetheoptimalbalancebetween expected risk and return for a long-term investment horizon. Like strategicallocation strategies, dynamic strategies largely retain exposure to their original assetclasses;however,unlikestrategicstrategies,dynamicassetallocationportfolioswilladjusttheirposturesovertimerelativetochangesintheeconomicenvironment.

• TacticalAssetAllocation:Tacticalassetallocationisastrategyinwhichaninvestortakesamoreactiveapproachthattriestopositionaportfoliointothoseassets,sectors,orindividualstocks that show the most potential for perceived gains. While an original asset mix isformulatedmuch like strategic anddynamic portfolio, tactical strategies are often tradedmoreactivelyandarefreetomoveentirelyinandoutoftheircoreassetclasses

• Core-SatelliteAssetAllocation:Core-Satelliteallocationstrategiesgenerallycontaina'core'strategicelementmakingupthemostsignificantportionoftheportfolio,whileapplyingadynamicortactical 'satellite'strategythatmakesupasmallerpartoftheportfolio.Inthisway, core-satellite allocation strategies are ahybridof the strategic anddynamic/tacticalallocationstrategiesmentionedabove.

DimensionalFunds:Ourfirmwillallocatetheclient'sassetsamongvariousinvestmentstakingintoconsiderationtheoverallmanagementstyleselectedbytheclient.Ifsuitablefortheclientourfirmrecommendsportfoliosconsistingofpassivelymanagedassetclassandindexmutualfunds.OurfirmrecommendsmutualfundsofferedbyDimensionalFundAdvisors(“DFA”).DFAsponsoredmutualfundsfollowapassiveassetclassinvestmentphilosophywithlowholdingsturnover.Consequently,theDFAfundfeesaregenerallylowerthanfeesandexpenseschargedbyothertypesoffunds.ExchangeTradedFunds(“ETFs”):AnETFisatypeofInvestmentCompany(usually,anopen-endfundorunitinvestmenttrust)whoseprimaryobjectiveistoachievethesamereturnasaparticularmarketindex.ThevastmajorityofETFsaredesignedtotrackanindex,sotheirperformanceisclosetothatofanindexmutualfund,buttheyarenotexactduplicates.Atrackingerror,orthedifferencebetween the returns of a fund and the returns of the index, can arise due to differences incomposition,managementfees,expenses,andhandlingofdividends.ETFsbenefitfromcontinuous


pricing;theycanbeboughtandsoldonastockexchangethroughoutthetradingday.BecauseETFstradelikestocks,youcanplaceordersjustlikewithindividualstocks-suchaslimitorders,good-until-canceledorders,stoplossordersetc.Theycanalsobesoldshort.Traditionalmutualfundsareboughtandredeemedbasedontheirnetassetvalues(“NAV”)attheendoftheday.ETFsareboughtand sold at the market prices on the exchanges, which resemble the underlying NAV but areindependentofit.However,arbitrageurswillensurethatETFpricesarekeptveryclosetotheNAVoftheunderlyingsecurities.AlthoughaninvestorcanbuyasfewasoneshareofanETF,mostbuyinboardlots.Anythingboughtinlessthanaboardlotwillincreasethecosttotheinvestor.AnyonecanbuyanyETFnomatterwhereintheworldittrades.Thisprovidesabenefitovermutualfunds,whichgenerallycanonlybeboughtinthecountryinwhichtheyareregistered.OneofthemainfeaturesofETFsaretheirlowannualfees,especiallywhencomparedtotraditionalmutual funds. The passive nature of index investing, reduced marketing, and distribution andaccounting expenses all contribute to the lower fees. However, individual investors must pay abrokeragecommissiontopurchaseandsellETFshares; forthoseinvestorswhotradefrequently,thiscansignificantlyincreasethecostof investinginETFs.Thatsaid,withtheadventof low-costbrokeragefees,smallorfrequentpurchasesofETFsarebecomingmorecostefficient.EquitySecurities:Equitysecuritiesrepresentanownershippositioninacompany.Equitysecuritiestypicallyconsistofcommonstocks.Thepricesofequitysecuritiesfluctuatebasedon,amongotherthings, events specific to their issuers andmarket, economic and other conditions. For example,pricesof thesesecuritiescanbeaffectedbyfinancialcontractsheldbythe issuerorthirdparties(suchasderivatives)relatingtothesecurityorotherassetsorindices.Theremaybelittletradinginthesecondarymarketforparticularequitysecurities,whichmayadverselyaffectOurfirm'sabilitytovalueaccuratelyordisposeofsuchequitysecurities.Adversepublicityandinvestorperceptions,whetherornotbasedonfundamentalanalysis,maydecreasethevalueand/or liquidityofequitysecurities.Investinginsmallercompaniesmayposeadditionalrisksasitisoftenmoredifficulttovalue or dispose of small company stocks, more difficult to obtain information about smallercompanies,andthepricesoftheirstocksmaybemorevolatilethanstocksoflarger,moreestablishedcompanies. Clients should have a long-term perspective and, for example, be able to toleratepotentiallysharpdeclinesinvalue.FixedIncome:Fixedincomeisatypeofinvestingorbudgetingstyleforwhichrealreturnratesorperiodicincomeisreceivedatregularintervalsandatreasonablypredictablelevels.Fixed-incomeinvestorsaretypicallyretiredindividualswhorelyontheirinvestmentstoprovidearegular,stableincomestream.Thisdemographictendstoinvestheavilyinfixed-incomeinvestmentsbecauseofthereliable returns they offer. Fixed-income investorswho live on set amounts of periodically paidincomefacetheriskofinflationerodingtheirspendingpower.Some examples of fixed-income investments include treasuries, money market instruments,corporatebonds,asset-backedsecurities,municipalbondsandinternationalbonds.Theprimaryriskassociated with fixed-income investments is the borrower defaulting on his payment. Otherconsiderationsincludeexchangerateriskforinternationalbondsandinterestrateriskforlonger-dated securities.Themost common typeof fixed-incomesecurity is abond.Bondsare issuedbyfederal governments, local municipalities and major corporations. Fixed-income securities arerecommended for investors seeking adiverseportfolio; however, thepercentageof theportfoliodedicated to fixed income depends on your own personal investment style. There is also anopportunitytodiversifythefixed-incomecomponentofaportfolio.Riskierfixed-incomeproducts,suchasjunkbondsandlonger-datedproducts,shouldcomprisealowerpercentageofyouroverallportfolio.


The interestpaymenton fixed-incomesecurities is consideredregular incomeand isdeterminedbasedonthecreditworthinessoftheborrowerandcurrentmarketrates.Ingeneral,bondsandfixed-incomesecuritieswithlonger-datedmaturitiespayahigherrate,alsoreferredtoasthecouponrate,becausetheyareconsideredriskier.Thelongerthesecurityisonthemarket,themoretimeithastoloseitsvalueand/ordefault.Attheendofthebondterm,oratbondmaturity,theborrowerreturnstheamountborrowed,alsoreferredtoastheprincipalorparvalue.IndexFund:Amutualfundorexchange-tradedfund(“ETF”)designedtofollowcertainpresetrulesso that the fund can track specified basket of underlying investments. Those rules may includetrackingprominentindexesliketheS&P500ortheDowJonesIndustrialAverageorimplementationrules,suchastax-management,trackingerrorminimization,largeblocktradingorpatient/flexibletradingstrategiesthatallowsforgreatertrackingerror,butlowermarketimpactcosts.Indexfundsmay also have rules that screen for social and sustainable criteria. An index fund’s rules ofconstructionclearlyidentifythetypeofcompaniessuitableforthefund.Themostcommonlyknownindexfund,theS&P500IndexFund,isbasedontherulesestablishedbyS&PDowJonesIndicesfortheirS&P500Index.Equityindexfundswouldincludegroupsofstockswithsimilarcharacteristicssuchas the size, value,profitability and/or thegeographic locationof the companies.Agroupofstocksmay include companies from the United States, Non-US Developed, emergingmarkets orFrontierMarket countries. Additional index fundswithin these geographicmarketsmay includeindexes of companies that include rules based on company characteristics or factors, such ascompaniesthataresmall,mid-sized,large,smallvalue,largevalue,smallgrowth,largegrowth,thelevelofgrossprofitabilityorinvestmentcapital,realestate,orindexesbasedoncommoditiesandfixed-income.Companiesarepurchasedandheldwithintheindexfundwhentheymeetthespecificindexrulesorparametersandaresoldwhentheymoveoutsideofthoserulesorparameters.Thinkofanindexfundasaninvestmentutilizingrules-basedinvesting.Someindexprovidersannouncechangesofthecompanies intheir indexbeforethechangedateandother indexprovidersdonotmakesuchannouncements.Index fundsmustperiodically "rebalance"oradjust theirportfolios tomatch thenewpricesandmarketcapitalizationoftheunderlyingsecuritiesinthestockorotherindexesthattheytrack.Thisallowsalgorithmic traders toperform indexarbitragebyanticipatingand tradingaheadof stockpricemovementscausedbymutualfundrebalancing,makingaprofitonforeknowledgeofthelargeinstitutionalblockorders.Thisresultsinprofitstransferredfrominvestorstoalgorithmictraders.Oneproblemoccurswhenalargeamountofmoneytracksthesameindex.Accordingtotheory,acompanyshouldnotbeworthmorewhenitisinanindex.Butduetosupplyanddemand,acompanybeingaddedcanhaveademandshock,andacompanybeingdeletedcanhaveasupplyshock,andthiswillchangetheprice.Thisdoesnotshowupintrackingerrorsincetheindexisalsoaffected.AfundmayexperiencelessimpactbytrackingalesspopularindexIndividualStocks:Acommonstockisasecuritythatrepresentsownershipinacorporation.Holdersofcommonstockexercisecontrolbyelectingaboardofdirectorsandvotingoncorporatepolicy.Investinginindividualcommonstocksprovidesuswithmorecontrolofwhatyouareinvestedinandwhenthat investment ismade.Havingtheability todecidewhentobuyorsellhelpsustimethetakingofgainsorlosses.Commonstocks,however,bearagreateramountofriskwhencomparedtocertificate of deposits, preferred stock and bonds. It is typically more difficult to achievediversificationwheninvestinginindividualcommonstocks.Additionally,commonstockholdersareon the bottom of the priority ladder for ownership structure; if a company goes bankrupt, thecommonstockholdersdonot receive theirmoneyuntil the creditors andpreferred shareholdershavereceivedtheirrespectiveshareoftheleftoverassets.


Long-TermPurchases:Ourfirmmaybuysecuritiesforyouraccountandholdthemforarelativelylong time (more thana year) in anticipation that the security’s valuewill appreciateover a longhorizon.Theriskofthisstrategyisthatourfirmcouldmissoutonpotentialshort-termgainsthatcouldhavebeenprofitable to your account, or it’s possible that the security’s valuemaydeclinesharplybeforeourfirmmakeadecisiontosell.MutualFunds:Amutualfundisacompanythatpoolsmoneyfrommanyinvestorsandinveststhemoneyinavarietyofdifferingsecuritytypesbasedtheobjectivesofthefund.Theportfolioofthefundconsistsofthecombinedholdingsitowns.Eachsharerepresentsaninvestor’sproportionateownershipofthefund’sholdingsandtheincomethoseholdingsgenerate.Thepricethatinvestorspayformutualfundsharesisthefund’spersharenetassetvalue(“NAV”)plusanyshareholderfeesthat the fund imposes at the time of purchase (such as sales loads). Investors typically cannotascertaintheexactmake-upofafund’sportfolioatanygiventime,norcantheydirectlyinfluencewhichsecuritiesthefundmanagerbuysandsellsorthetimingofthosetrades.Withanindividualstock,investorscanobtainreal-time(orclosetoreal-time)pricinginformationwithrelativeeasebychecking financialwebsitesorby callingabrokeroryour investmentadviser. Investors canalsomonitorhowastock’spricechangesfromhourtohour—orevensecondtosecond.Bycontrast,withamutualfund,thepriceatwhichaninvestorpurchasesorredeemsshareswilltypicallydependonthefund’sNAV,whichiscalculateddailyaftermarketclose.Thebenefitsofinvestingthroughmutualfundsinclude:(a)Mutualfundsareprofessionallymanagedbyaninvestmentadviserwhoresearches,selects,andmonitorstheperformanceofthesecuritiespurchasedby the fund; (b)Mutual funds typicallyhave thebenefitofdiversification,which isaninvesting strategy that generally sums up as “Don’t put all your eggs in one basket.” Spreadinginvestments across awide range of companies and industry sectors can help lower the risk if acompanyorsectorfails.Someinvestorsfinditeasiertoachievediversificationthroughownershipofmutualfundsratherthanthroughownershipofindividualstocksorbonds.;(c)Somemutualfundsaccommodate investorswhodonothavea lotofmoney to investbysettingrelatively lowdollaramountsforinitialpurchases,subsequentmonthlypurchases,orboth.;and(d)Atanytime,mutualfundinvestorscanreadilyredeemtheirsharesatthecurrentNAV,lessanyfeesandchargesassessedonredemption.Mutualfundsalsohavefeaturesthatsomeinvestorsmightviewasdisadvantages:(a)Investorsmustpaysalescharges,annualfees,andotherexpensesregardlessofhowthefundperforms.Dependingon the timing of their investment, investors may also have to pay taxes on any capital gainsdistributiontheyreceive.Thisincludesinstanceswherethefundwentontoperformpoorlyafterpurchasingshares.;(b)Investorstypicallycannotascertaintheexactmake-upofafund’sportfolioatanygiventime,norcantheydirectlyinfluencewhichsecuritiesthefundmanagerbuysandsellsorthetimingofthosetrades.;and(c)Withanindividualstock,investorscanobtainreal-time(orclosetoreal-time)pricing informationwithrelativeeasebychecking financialwebsitesorbycallingabrokeroryourinvestmentadviser.Investorscanalsomonitorhowastock’spricechangesfromhourtohour—orevensecondtosecond.Bycontrast,withamutualfund,thepriceatwhichaninvestorpurchasesor redeems shareswill typicallydependon the fund’sNAV,which the fundmightnotcalculateuntilmanyhoursaftertheinvestorplacedtheorder.Ingeneral,mutualfundsmustcalculatetheirNAVatleastonceeverybusinessday,typicallyafterthemajorU.S.exchangesclose.Wheninvestorsbuyandholdanindividualstockorbond,theinvestormustpayincometaxeachyearonthedividendsorinteresttheinvestorreceives.However,theinvestorwillnothavetopayanycapitalgainstaxuntiltheinvestoractuallysellsandmakesaprofit.Mutualfundsaredifferent.Whenaninvestorbuysandholdsmutualfundshares,theinvestorwilloweincometaxonanyordinary


dividendsintheyeartheinvestorreceivesorreinveststhem.Moreover,inadditiontoowingtaxesonanypersonalcapitalgainswhentheinvestorsellsshares,theinvestormayhavetopaytaxeseachyearonthefund’scapitalgains.Thatisbecausethelawrequiresmutualfundstodistributecapitalgainstoshareholdersiftheysellsecuritiesforaprofit,andcannotuselossestooffsetthesegains.Real Estate Investment Trusts (“REITs”):REITs primarily invest in real estate or real estate-related loans. Equity REITs own real estate properties,whilemortgageREITs hold construction,developmentand/orlong-termmortgageloans.Changesinthevalueoftheunderlyingpropertyofthetrusts,thecreditworthinessoftheissuer,propertytaxes,interestrates,taxlaws,andregulatoryrequirements,suchasthoserelatingtotheenvironmentallcanaffectthevaluesofREITs.BothtypesofREITsaredependentuponmanagementskill,thecashflowsgeneratedbytheirholdings,therealestatemarketingeneral,andthepossibilityoffailingtoqualifyforanyapplicablepass-throughtaxtreatmentorfailingtomaintainanyapplicableexemptivestatusaffordedunderrelevantlaws.Short-TermPurchases:Whenutilizingthisstrategy,ourfirmmayalsopurchasesecuritieswiththeideaofsellingthemwithinarelativelyshorttime(typicallyayearorless).Ourfirmdoesthisinanattempttotakeadvantageofconditionsthatourfirmbelieveswillsoonresultinapriceswinginthesecuritiesourfirmpurchase.RiskofLossInvestinginsecuritiesinvolvesriskoflossthatclientsshouldbepreparedtobear.Whilethestockmarketmayincreaseandtheaccount(s)couldenjoyagain,itisalsopossiblethatthestockmarketmaydecreaseandtheaccount(s)couldsufferaloss.Itisimportantthatclientsunderstandtherisksassociatedwithinvestinginthestockmarket,andthattheirassetsareappropriatelydiversifiedininvestments.Clientsareencouragedtoaskourfirmanyquestionsregardingtheirrisktolerance.CompanyRisk:When investing in stockpositions, there is alwaysa certain levelof companyorindustryspecificriskthatisinherentineachinvestment.Thisisalsoreferredtoasunsystematicriskand canbe reduced through appropriatediversification. There is the risk that the companywillperformpoorlyorhaveitsvaluereducedbasedonfactorsspecifictothecompanyoritsindustry.For example, if a company’s employees goon strikeor the company receivesunfavorablemediaattentionforitsactions,thevalueofthecompanymaybereduced.CreditRisk:Creditriskcanbeafactorinsituationswhereaninvestment’sperformancereliesonaborrower’s repayment of borrowed funds.With credit risk, an investor can experience a loss orunfavorableperformanceifaborrowerdoesnotrepaytheborrowedfundsasexpectedorrequired.Investmentholdingsthatinvolveformsofindebtedness(i.e.borrowedfunds)aresubjecttocreditrisk.Equity(Stock)MarketRisk:Commonstocksaresusceptibletogeneralstockmarketfluctuationsandtovolatile increasesanddecreases invalueasmarketconfidence inandperceptionsof theirissuerschange. Ifyouheldcommonstock,orcommonstockequivalents,ofanygivenissuer,youwouldgenerallybeexposedtogreaterriskthanifyouheldpreferredstocksanddebtobligationsoftheissuer.ETF &Mutual Fund Risk: When investing in an ETF or mutual fund, you will bear additionalexpensesbasedonyourproratashareoftheETF’sormutualfund’soperatingexpenses,includingthepotentialduplicationofmanagementfees.TheriskofowninganETFormutualfundgenerally


reflectstherisksofowningtheunderlyingsecuritiestheETFormutualfundholds.ClientswillalsoincurbrokeragecostswhenpurchasingETFs.FixedIncomeSecuritiesRisk:Typically,thevaluesoffixed-incomesecuritieschangeinverselywithprevailinginterestrates.Therefore,afundamentalriskoffixed-incomesecuritiesisinterestraterisk,whichistheriskthattheirvaluewillgenerallydeclineasprevailinginterestratesrise,whichmaycauseyouraccountvaluetolikewisedecrease,andviceversa.Howspecificfixedincomesecuritiesmayreacttochanges in interestrateswilldependonthespecificcharacteristicsofeachsecurity.Fixed-incomesecuritiesarealsosubjecttocreditrisk,prepaymentrisk,valuationrisk,andliquidityrisk.Credit risk is thechance thatabond issuerwill fail topay interestandprincipal ina timelymanner,orthatnegativeperceptionsofthe issuer’sabilitytomakesuchpaymentswillcausethepriceofabondtodecline.LiquidityRisk:Certainassetsmaynotbereadilyconvertedintocashormayhaveaverylimitedmarketinwhichtheytrade.Thus,youmayexperiencetheriskthatyourinvestmentorassetswithinyourinvestmentmaynotbeabletobeliquidatedquickly,thus,extendingtheperiodoftimebywhichyoumayreceivetheproceeds fromyour investment.Liquidityriskcanalsoresult inunfavorablepricingwhenexiting(i.e.notbeingabletoquicklygetoutofaninvestmentbeforethepricedropssignificantly) a particular investment and therefore, can have a negative impact on investmentreturns.StrategyRisk:Thereisnoguaranteethattheinvestmentstrategiesdiscussedhereinwillworkunderallmarketconditionsandeachinvestorshouldevaluatehis/herabilitytomaintainanyinvestmenthe/sheisconsideringinlightofhis/herowninvestmenttimehorizon.Investmentsaresubjecttorisk,includingpossiblelossofprincipal.

DescriptionofMaterial,SignificantorUnusualRisksOurfirmgenerallyinvestsclientcashbalancesinmoneymarketfunds,FDICInsuredCertificatesofDeposit,high-gradecommercialpaperand/orgovernmentbackeddebtinstruments.Ultimately,ourfirm tries to achieve the highest return on client cash balances through relatively low-riskconservativeinvestments.Inmostcases,atleastapartialcashbalancewillbemaintainedinamoneymarketaccountsothatourfirmmaydebitadvisoryfeesforourservicesrelatedtoourservices,asapplicable.

Item9:DisciplinaryInformation

Therearenolegalordisciplinaryeventsthatarematerialtotheevaluationofouradvisorybusinessortheintegrityofourmanagement.

Item10:OtherFinancialIndustryActivities&Affiliations

Representativesofourfirmareinsuranceagents/brokers.Theyofferinsuranceproductsandreceivefees as a result of insurance sales.A conflict of interest exists as these insurance sales create an


incentivetorecommendproductsbasedonthecompensationadviserand/oroursupervisedpersonsmayearn.Tomitigatethispotentialconflict,ourfirmwillactintheclient’sbestinterest.

Item11:CodeofEthics,ParticipationorInterestin

ClientTransactions&PersonalTrading

Asafiduciary,itisaninvestmentadviser’sresponsibilitytoprovidefairandfulldisclosureofallmaterialfactsandtoactsolelyinthebestinterestofeachofourclientsatalltimes.Ourfiduciarydutyistheunderlyingprincipleforourfirm’sCodeofEthics,whichincludesproceduresforpersonalsecuritiestransaction and insider trading. Our firm requires all representatives to conduct businesswith thehighestlevelofethicalstandardsandtocomplywithallfederalandstatesecuritieslawsatalltimes.Uponemploymentwithourfirm,andatleastannuallythereafter,allrepresentativesofourfirmwillacknowledge receipt, understanding and compliance with our firm’s Code of Ethics. Our firm andrepresentativesmustconductbusinessinanhonest,ethical,andfairmannerandavoidallcircumstancesthatmightnegativelyaffectorappeartoaffectourdutyofcompleteloyaltytoallclients.ThisdisclosureisprovidedtogiveallclientsasummaryofourCodeofEthics.IfaclientorapotentialclientwishestoreviewourCodeofEthicsinitsentirety,acopywillbeprovidedpromptlyuponrequest.Our firm recognizes that the personal investment transactions of our representatives demands theapplicationofaCodeofEthicswithhighstandardsandrequiresthatallsuchtransactionsbecarriedoutinawaythatdoesnotendangertheinterestofanyclient.Atthesametime,ourfirmalsobelievesthatifinvestmentgoalsaresimilarforclientsandforourrepresentatives,itislogical,andevendesirable,thattherebecommonownershipofsomesecurities.Inordertopreventconflictsofinterest,ourfirmhasestablishedproceduresfortransactionseffectedbyour representatives for theirpersonalaccounts1. Inorder tomonitor compliancewithourpersonaltradingpolicy,ourfirmhaspre-clearancerequirementsandaquarterlysecuritiestransactionreportingsystemforallofourrepresentatives.Neitherour firmnorarelatedpersonrecommends,buysorsells forclientaccounts,securities inwhichourfirmorarelatedpersonhasamaterialfinancialinterestwithoutpriordisclosuretotheclient.Related persons of our firm may buy or sell securities and other investments that are alsorecommendedtoclients.Inordertominimizethisconflictofinterest,ourrelatedpersonswillplaceclientinterestsaheadoftheirowninterestsandadheretoourfirm’sCodeofEthics,acopyofwhichisavailableuponrequest.Likewise,relatedpersonsofourfirmbuyorsellsecuritiesforthemselvesatoraboutthesametimetheybuyorsell thesamesecurities forclientaccounts. Inorder tominimize thisconflictof interest,ourrelatedpersonswillplaceclientinterestsaheadoftheirowninterestsandadheretoourfirm’sCodeofEthics,acopyofwhichisavailableuponrequest.Further,ourrelatedpersonswillrefrainfrombuying

1Forpurposesofthepolicy,ourassociate’spersonalaccountgenerallyincludesanyaccount(a)inthenameofourassociate,his/herspouse,his/herminorchildrenorotherdependentsresidinginthesamehousehold,(b)forwhichourassociateisatrusteeorexecutor,or(c)whichourassociatecontrols,includingourclientaccountswhichourassociatecontrolsand/oramemberofhis/herhouseholdhasadirectorindirectbeneficialinterestin.


orsellingthesamesecuritiespriortobuyingorsellingforourclientsinthesamedayunlessincludedinablocktrade.

Item12:BrokeragePractices

Custodian&BrokersUsedOur firm does notmaintain custody of client assets (although our firmmay be deemed to havecustodyofclientassets ifgivetheauthority towithdrawassets fromclientaccounts.See Item15Custody,below).Clientassetsmustbemaintainedinanaccountata“qualifiedcustodian,”generallyabroker-dealerorbank.OurfirmrecommendsthatclientsusetheSchwabAdvisorServicesdivisionof Charles Schwab& Co. Inc. (“Schwab”), a FINRA-registered broker-dealer, member SIPC, as thequalifiedcustodian.Ourfirmisindependentlyownedandoperated,andnotaffiliatedwithSchwab.Schwabwillholdclientassetsinabrokerageaccountandbuyandsellsecuritieswheninstructed.WhileourfirmrecommendsthatclientsuseSchwabascustodian/broker,clientswilldecidewhethertodosoandopenanaccountwithSchwabbyenteringintoanaccountagreementdirectlywiththem.Ourfirmdoesnotopentheaccount.EventhoughtheaccountismaintainedatSchwab,ourfirmcanstilluseotherbrokerstoexecutetrades,asdescribedinthenextparagraph.HowBrokers/CustodiansAreSelectedOur firm seeks to recommend a custodian/broker who will hold client assets and executetransactions on terms that are overall most advantageous when compared to other availableprovidersandtheirservices.Awiderangeoffactorsareconsidered,including,butnotlimitedto:

• combinationoftransactionexecutionservicesalongwithassetcustodyservices(generallywithoutaseparatefeeforcustody)

• capabilitytoexecute,clearandsettletrades(buyandsellsecuritiesforclientaccounts)• capabilitiestofacilitatetransfersandpaymentstoandfromaccounts(wiretransfers,check

requests,billpayment,etc.)• breadth of investment products made available (stocks, bonds, mutual funds, exchange

tradedfunds(ETFs),etc.)• availability of investment research and tools that assist in making investment decisions

qualityofservices• competitivenessofthepriceofthoseservices(commissionrates,margininterestrates,other

fees,etc.)andwillingnesstonegotiatethem• reputation,financialstrengthandstabilityoftheprovider• priorservicetoourfirmandourotherclients• availability of other products and services that benefit our firm, as discussed below (see

“Products&ServicesAvailablefromSchwab”)Custody&BrokerageCostsSchwabgenerallydoesnotchargeaseparatefeeforcustodyservices,butiscompensatedbychargingcommissions or other fees to clients on trades that are executed or that settle into the Schwabaccount. Inaddition tocommissions,Schwabchargesa flatdollaramountasa “primebroker”or“tradeaway”feeforeachtradethatourfirmhasexecutedbyadifferentbroker-dealerbutwherethesecuritiesboughtorthefundsfromthesecuritiessoldaredeposited(settled)intoaSchwabaccount.


Thesefeesareinadditiontothecommissionsorothercompensationpaidtotheexecutingbroker-dealer.Becauseofthis,inordertominimizeclienttradingcosts,ourfirmhasSchwabexecutemosttradesfortheaccounts.Products&ServicesAvailablefromSchwabSchwabAdvisorServicesisSchwab’sbusinessservingindependentinvestmentadvisoryfirmslikeour firm. They provide our firm and clients with access to its institutional brokerage – trading,custody,reportingandrelatedservices–manyofwhicharenottypicallyavailabletoSchwabretailcustomers. Schwab also makes available various support services. Some of those services helpmanageoradministerourclientaccountswhileothershelpmanageandgrowourbusiness.Schwab’ssupportservicesaregenerallyavailableonanunsolicitedbasis(ourfirmdoesnothavetorequestthem)andatnochargetoourfirm.TheavailabilityofSchwab’sproductsandservicesisnotbasedontheprovisionofparticularinvestmentadvice,suchaspurchasingparticularsecuritiesforclients.HereisamoredetaileddescriptionofSchwab’ssupportservices:ServicesthatBenefitClientsSchwab’sinstitutionalbrokerageservicesincludeaccesstoabroadrangeofinvestmentproducts,executionofsecuritiestransactions,andcustodyofclientassets.Theinvestmentproductsavailablethrough Schwab include some towhichour firmmightnot otherwisehave access or thatwouldrequire a significantly higher minimum initial investment by firm clients. Schwab’s servicesdescribedinthisparagraphgenerallybenefitclientsandtheiraccounts.ServicesthatMayNotDirectlyBenefitClientsSchwabalsomakesavailableotherproductsandservicesthatbenefitourfirmbutmaynotdirectlybenefitclientsortheiraccounts.Theseproductsandservicesassistinmanagingandadministeringourclientaccounts.Theyincludeinvestmentresearch,bothSchwab’sandthatofthirdparties.Thisresearchmaybeusedtoserviceallorsomesubstantialnumberofclientaccounts,includingaccountsnotmaintainedatSchwab.Inadditiontoinvestmentresearch,Schwabalsomakesavailablesoftwareandothertechnologythat:

• providesaccess toclientaccountdata(suchasduplicate tradeconfirmationsandaccountstatements);

• facilitatestradeexecutionandallocateaggregatedtradeordersformultipleclientaccounts;• providespricingandothermarketdata;• facilitatespaymentofourfeesfromourclients’accounts;and• assistswithback-officefunctions,recordkeepingandclientreporting.

ServicesthatGenerallyBenefitOnlyOurFirmSchwab also offers other services intended to help manage and further develop our businessenterprise.Theseservicesinclude:

• educationalconferencesandevents• technology,compliance,legal,andbusinessconsulting;• publicationsandconferencesonpracticemanagementandbusinesssuccession;and• accesstoemployeebenefitsproviders,humancapitalconsultantsandinsuranceproviders.


Schwabmayprovidesomeoftheseservicesitself.Inothercases,Schwabwillarrangeforthird-partyvendorstoprovidetheservicestoourfirm.Schwabmayalsodiscountorwaivefeesforsomeoftheseservicesorpayallorapartofa thirdparty’s fees.Schwabmayalsoprovideour firmwithotherbenefits,suchasoccasionalbusinessentertainmentforourpersonnel.IrrespectiveofdirectorindirectbenefitstoourclientthroughSchwab,ourfirmstrivestoenhancetheclientexperience,helpclientsreachtheirgoalsandputclientinterestsbeforethatofourfirmorassociatedpersons.OurInterestinSchwab’sServices.TheavailabilityoftheseservicesfromSchwabbenefitsourfirmbecauseourfirmdoesnothavetoproduce or purchase them. Our firm does not have to pay for these services, and they are notcontingentuponcommittinganyspecificamountofbusinesstoSchwabintradingcommissionsorassetsincustody.InlightofourarrangementswithSchwab,aconflictofinterestexistsasourfirmmayhaveincentiveto require that clients maintain their accounts with Schwab based on our interest in receivingSchwab’sservicesthatbenefitourfirmratherthanbasedonclientinterestinreceivingthebestvalueincustodyservicesandthemostfavorableexecutionoftransactions.Aspartofourfiduciarydutytoourclients,ourfirmwillendeavoratalltimestoputtheinterestsofourclientsfirst.Clientsshouldbeaware,however,thatthereceiptofeconomicbenefitsbyourfirmorourrelatedpersonscreatesapotentialconflictofinterestandmayindirectlyinfluenceourfirm’schoiceofSchwabasacustodialrecommendation. Our firm examined this potential conflict of interest when our firm chose torecommendSchwabandhavedeterminedthattherecommendationisinthebestinterestofourfirm’sclientsandsatisfiesourfiduciaryobligations,includingourdutytoseekbestexecution.Inseekingbestexecution,thedeterminativefactorisnotthelowestpossiblecost,butwhetherthetransactionrepresentsthebestqualitativeexecution, taking intoconsiderationthe fullrangeofabroker-dealer’sservices,includingthevalueofresearchprovided,executioncapability,commissionrates,andresponsiveness.Althoughourfirmwillseekcompetitiverates,tothebenefitofallclients,ourfirmmaynotnecessarilyobtainthelowestpossiblecommissionratesforspecificclientaccounttransactions.OurfirmbelievesthattheselectionofSchwabasacustodianandbroker is thebestinterestofourclients.Itisprimarilysupportedbythescope,qualityandpriceofSchwab’sservices,andnotSchwab’sservicesthatonlybenefitourfirm.SoftDollarsOurfirmdoesnotreceivesoftdollarsinexcessofwhatisallowedbySection28(e)oftheSecuritiesExchangeActof1934.The safeharbor researchproducts and servicesobtainedbyour firmwillgenerallybeusedtoserviceallofourclientsbutnotnecessarilyallatanyoneparticulartime.ClientBrokerageCommissionsSchwabdoesnotmakeclientbrokeragecommissionsgeneratedbyclienttransactionsavailableforourfirm’suse.


ClientTransactionsinReturnforSoftDollarsOur firmdoesnotdirectclient transactions toaparticularbroker-dealer inreturn forsoftdollarbenefits.BrokerageforClientReferralsOurfirmdoesnotreceivebrokerageforclientreferrals. DirectedBrokerageIncertaininstances,clientsmayseektolimitorrestrictourdiscretionaryauthorityinmakingthedeterminationofthebrokerswithwhomordersforthepurchaseorsaleofsecuritiesareplacedforexecution,andthecommissionratesatwhichsuchsecuritiestransactionsareeffected.Clientsmayseektolimitourauthorityinthisareabydirectingthattransactions(orsomespecifiedpercentageof transactions)beexecutedthroughspecifiedbrokers inreturn forportfolioevaluationorotherservicesdeemedby the client tobeof value.Any such clientdirectionmustbe inwriting (oftenthrough our advisory agreement), and may contain a representation from the client that thearrangementispermissibleunderitsgoverninglawsanddocuments,ifthisisrelevant.Ourfirmprovidesappropriatedisclosureinwritingtoclientswhodirecttradestoparticularbrokers,thatwithrespecttotheirdirectedtrades,theywillbetreatedasiftheyhaveretainedtheinvestmentdiscretion that our firm otherwisewould have in selecting brokers to effect transactions and innegotiatingcommissionsandthatsuchdirectionmayadverselyaffectourabilitytoobtainbestpriceandexecution.Inaddition,ourfirmwillinformclientsinwritingthatthetradeordersmaynotbeaggregatedwithotherclients’ordersandthatdirectionofbrokeragemayhinderbestexecution.SpecialConsiderationsforERISAClientsA retirement or ERISA plan clientmay direct all or part of portfolio transactions for its accountthroughaspecificbrokerordealerinordertoobtaingoodsorservicesonbehalfoftheplan.Suchdirectionispermittedprovidedthatthegoodsandservicesprovidedarereasonableexpensesoftheplanincurredintheordinarycourseofitsbusinessforwhichitotherwisewouldbeobligatedandempoweredtopay.ERISAprohibitsdirectedbrokeragearrangementswhenthegoodsorservicespurchasedarenotfortheexclusivebenefitoftheplan.Consequently,ourfirmwillrequestthatplansponsorswhodirectplanbrokerageprovideuswithaletterdocumentingthatthisarrangementwillbefortheexclusivebenefitoftheplan.Client-DirectedBrokerageOurfirmallowsclientstodirectbrokerageoutsideourrecommendation.Ourfirmmaybeunabletoachieve the most favorable execution of client transactions. Client directed brokerage may costclientsmoremoney.Forexample,inadirectedbrokerageaccount,clientsmaypayhigherbrokeragecommissionsbecauseourfirmmaynotbeabletoaggregateorderstoreducetransactioncosts,orclientsmayreceivelessfavorableprices.AggregationofPurchaseorSale

Ourfirmprovidesinvestmentmanagementservicesforvariousclients.Thereareoccasionsonwhichportfoliotransactionsmaybeexecutedaspartofconcurrentauthorizationstopurchaseorsellthesame


security fornumerousaccountsservedbyour firm,which involveaccountswithsimilar investmentobjectives. Although such concurrent authorizations potentially could be either advantageous ordisadvantageoustoanyoneormoreparticularaccounts,theyareaffectedonlywhenourfirmbelievesthattodosowillbeinthebestinterestoftheeffectedaccounts.Whensuchconcurrentauthorizationsoccur,theobjectiveistoallocatetheexecutionsinamannerwhichisdeemedequitabletotheaccountsinvolved.Inanygivensituation,ourfirmattemptstoallocatetradeexecutionsinthemostequitablemannerpossible,takingintoconsiderationclientobjectives,currentassetallocationandavailabilityoffundsusingpriceaveraging,prorationandconsistentlynon-arbitrarymethodsofallocation.

Item13:ReviewofAccountsorFinancialPlans

FinancialPlanningclientsdonotreceivereviewsoftheirwrittenplansunlesstheytakeactiontoschedulea financialconsultationwithus.Our firmdoesnotprovideongoingservices to financialplanningclients,butarewillingtomeetwithsuchclientsupontheirrequesttodiscussupdatestotheirplans,changesintheircircumstances,etc.FinancialPlanningclientsdonotreceivewrittenorverbalupdatedreportsregardingtheirfinancialplansunlesstheyseparatelyengageourfirmforapost-financialplanmeetingorupdatetotheirinitialwrittenfinancialplan.RetirementPlanConsultingclientsreceivereviewsoftheirretirementplansforthedurationoftheservice.Ourfirmalsoprovidesongoingserviceswhereclientsaremetwithupontheirrequesttodiscussupdatestotheirplans,changesintheircircumstances,etc.RetirementPlanConsultingclientsdonotreceivewrittenorverbalupdatedreportsregardingtheirplansunlesstheychoosetoengageourfirmforongoingservices.

Item14:ClientReferrals&OtherCompensation

CharlesSchwab&Co.,Inc.OurfirmreceiveseconomicbenefitfromSchwabintheformofthesupportproductsandservicesmade available to our firm and other independent investment advisors that have their clientsmaintainaccountsatSchwab.Theseproductsandservices,howtheybenefitourfirm,andtherelatedconflicts of interest are described above (see Item 12 – Brokerage Practices). The availability ofSchwab’sproductsandservicesisnotbasedonourfirmgivingparticularinvestmentadvice,suchasbuyingparticularsecuritiesforourclients.ReferralFeesOur firm does not pay referral fees (non-commission based) to independent solicitors (non-registeredrepresentatives)forthereferraloftheirclientstoourfirminaccordancewithrelevantstatestatutesandrules.


Item15:Custody

StateSecuritiesBureausgenerallytakethepositionthatanyarrangementunderwhicharegisteredinvestmentadviserisauthorizedorpermittedtowithdrawclientfundsorsecuritiesmaintainedwithacustodianupontheadviser’sinstructiontothecustodianisdeemedtohavecustodyofclientfundsandsecurities.Assuch,ourfirmhasadoptedthefollowingsafeguardingprocedures:

a) Clients must provide our firm with written authorization permitting direct payment of

advisory fees fromtheiraccount(s)maintainedbyacustodianwho is independentofourfirm;

b) Ourfirmsendsmonthlystatementstotheclientshowingthefeeamount, thevalueof theassetsuponwhichthefeeisbased,andthespecificmannerinwhichthefeeiscalculatedaswellasdisclosingthatitistheclient’sresponsibilitytoverifytheaccuracyoffeecalculation,andthatthecustodiandoesnotdetermineitsaccuracy;and

c) Theaccountcustodiansendsastatementtotheclient,atleastquarterly,showingallaccountdisbursements,includingadvisoryfees.

Clientsareencouragedtoraiseanyquestionswithusaboutthecustody,safetyorsecurityoftheirassetsandourcustodialrecommendations.TheSECissuedano-actionletter(“Letter”)withrespecttotheRule206(4)-2(“CustodyRule”)undertheInvestmentAdvisersActof1940(“AdvisersAct”).TheletterprovidedguidanceontheCustodyRuleaswellasclarifiedthatanadviserwhohasthepowertodisburseclientfundstoathirdpartyundera standing letterof instruction (“SLOA”) isdeemed tohave custody.As such,our firmhasadoptedthefollowingsafeguardsinconjunctionwithourcustodian,Schwab:

• The clientprovides an instruction to thequalified custodian, inwriting, that includes theclient’ssignature, the thirdparty’sname,andeither the thirdparty’saddressor the thirdparty’saccountnumberatacustodiantowhichthetransfershouldbedirected.

• Theclientauthorizestheinvestmentadviser,inwriting,eitheronthequalifiedcustodian’sformorseparately,todirecttransferstothethirdpartyeitheronaspecifiedscheduleorfromtimetotime.

• Theclient’squalifiedcustodianperformsappropriateverificationoftheinstruction,suchasa signature review or other method to verify the client’s authorization, and provides atransferoffundsnoticetotheclientpromptlyaftereachtransfer.

• The client has the ability to terminate or change the instruction to the client’s qualifiedcustodian.

• Theinvestmentadviserhasnoauthorityorabilitytodesignateorchangetheidentityofthethird party, the address, or any other information about the third party contained in theclient’sinstruction.

• Theinvestmentadvisermaintainsrecordsshowingthatthethirdpartyisnotarelatedpartyoftheinvestmentadviserorlocatedatthesameaddressastheinvestmentadviser.

• Theclient’squalifiedcustodiansendstheclient,inwriting,aninitialnoticeconfirmingtheinstructionandanannualnoticereconfirmingtheinstruction.


Item16:InvestmentDiscretion

Clientshavetheoptionofprovidingourfirmwithinvestmentdiscretionontheirbehalf,pursuanttoanexecuted investmentadvisoryclientagreement.Bygranting investmentdiscretion,our firm isauthorizedtoexecutesecuritiestransactions,determinewhichsecuritiesareboughtandsold,andthetotalamounttobeboughtandsold.Shouldclientsgrantourfirmnon-discretionaryauthority,ourfirmwouldberequiredtoobtaintheclient’spermissionpriortoeffectingsecuritiestransactions.Limitationsmaybeimposedbytheclientintheformofspecificconstraintsonanyoftheseareasofdiscretionwithourfirm’swrittenacknowledgement.

Item17:VotingClientSecurities

Ourfirmdoesnotaccepttheproxyauthoritytovoteclientsecurities.Clientswillreceiveproxiesorothersolicitationsdirectlyfromtheircustodianoratransferagent.Intheeventthatproxiesaresenttoourfirm,ourfirmwillforwardthemtotheappropriateclientandaskthepartywhosentthemtomailthemdirectlytotheclientinthefuture.Clientsmaycall,writeoremailustodiscussquestionstheymayhaveaboutparticularproxyvotesorothersolicitations.

Item18:FinancialInformation

OurfirmisnotrequiredtoprovidefinancialinformationinthisBrochurebecause:• Ourfirmdoesnotrequiretheprepaymentofmorethan$500infeeswhenservicescannot

berenderedwithin6months.• Ourfirmdoesnottakecustodyofclientfundsorsecurities.• Ourfirmdoesnothaveafinancialconditionorcommitmentthatimpairsourabilitytomeet

contractualandfiduciaryobligationstoclients.

Ourfirmhasneverbeenthesubjectofabankruptcyproceeding.


Item19:RequirementsforState-RegisteredAdvisers

MichaelD.HeatwoleYearofBirth:1984EducationalBackground:

• 2010: IllinoisInstituteofTechnology;MasterofStructuralEngineering• 2006: IllinoisInstituteofTechnology;BachelorofScienceinCivilEngineering

BusinessBackground:

• 03/2018–Present TheDalaGroup,LLC;ManagingMember,ChiefComplianceOfficer,& InvestmentAdviserRepresentative

• 02/2013–03/2018 Waddell&Reed;FinancialAdviser• 05/2010–02/2013 Baldridge&AssociatesStructuralEngineering;StructuralEngineer

Exams,Licenses&OtherProfessionalDesignations:

• 2016:CERTIFIEDFINANCIALPLANNER,CFP®&AccreditedWealthManagementAdvisor(AWMA®)

• 2013:Series66Exams• 2012:Series7Exam• ILInsuranceLicensed

PleaseseeItem10ofthisFirmBrochureforanyotherbusinessinwhichourfirmisactivelyengaged.OurfirmdoesnotchargeperformancebasedfeesOurfirmandmanagementpersonshavenotbeeninvolved in any arbitration awards, found liable in any civil, self-regulatory organization oradministrativeproceedingsorhaveanyrelationshipswithissuersorsecuritiesapartfromwhatisdisclosedabove.Ourfirmdoesnothavecompensationarrangementsconnectedwithadvisoryserviceswhichareinaddition to our advisory fees. Our management persons and representatives do not have arelationshiporarrangementwithany issuerofsecurities.Asa fiduciary,our firmalwaysputourClient’sinterestaboveourown.InformationregardingparticipationofinterestinclienttransactionscanbefoundinourCodeofEthicsaswellasItem11ofthisBrochure.ClientsmayobtainacopyofourCodeofEthicsbycontactingMikeHeatwole,ChiefComplianceOfficerat(224)600-2372.

Form ADV Part 2A - Firm Brochure - March 2019 · ADV Part 2A – Firm Brochure Page 2 The Dala...

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