Item 5: Additional Compensation ............................................................................. 19
Item 6: Supervision .................................................................................................. 19
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Firm Description As used in this Firm Brochure, “FOCUS” refers to the entity Focus Wealth Planning, Inc.
FOCUS was established in August 2018 and the principal owner of FOCUS is the Revocable
Declaration of Trust for Jon L. Aldrich, Jon L. Aldrich trustee. Prior to the acquisition by
FOCUS, Focus Financial Advisors, Inc. was in existence since 1984. Jon was an employee and
principal of Focus Financial Advisors, Inc. from December 2004 to July 2018, and served as
its president since April 2015.
FOCUS provides personalized investment management, investment advice and financial
planning services to individuals, trusts, estates, charitable organizations and small
businesses. Advice is provided through consultation with the client and may include
identification of financial goals and objectives, gathering relevant details, analyzing the
information to formulate a plan, recommending a financial plan, implementing
recommendations and monitoring the plan.
FOCUS is strictly a fee‐only financial planning and investment management firm. The firm
does not sell commission‐based securities. No commissions in any form are accepted. No
finder’s fees are accepted.
FOCUS does not provide tax and/or legal advice. Other professionals (e.g., lawyers,
accountants, insurance agents, etc.) are engaged directly by the client on an as‐needed
basis. Conflicts of interest will be disclosed to the client in the unlikely event they should
occur.
The initial meeting is free of charge and is considered an exploratory interview to determine
the extent to which financial planning and investment management may be beneficial to the
client.
Types of Advisory Services FOCUS provides financial planning and investment advisory services, as more fully described
below.
FOCUS’ services are tailored to the individual needs of clients. FOCUS assists clients in
determining their financial goals and objectives and creating a financial plan and investment
program that will help them reach these goals.
FOCUS will either implement the investment strategy utilizing the services of an unaffiliated
investment manager and/or through its internal investment management.
FOCUS may recommend the investment sub‐advisory services of Pinnacle Advisory Group,
Inc. (“Pinnacle”), utilizing one or more of their investment strategies, as an Independent
Manager. FOCUS will provide the Client with Pinnacle’s ADV Part 2 Brochure prior to
establishing an account with Pinnacle as the sub‐advisor.
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Clients may impose restrictions on investing in certain securities or types of securities. This
must be done in writing and be signed by the client. Agreements are not assigned without
client consent.
FOCUS manages approximately $134,831,750 in assets for approximately 140 clients. Our
regulatory assets under management (RAUM), which includes assets over which we provide
continuing and regular supervisory management and for which we have the ability to
implement trades, is approximately $109,679,160 In addition to the assets considered
RAUM, we also provide continuous and regular supervisory management, but do not have
trading discretion, on approximately $5,038,495, and provide advice on a non‐discretionary
basis only, for approximately $20,114,095.
Financial Planning Services A financial plan is designed to help the client with all aspects of financial planning. A client
may choose to engage FOCUS for financial planning services alone, or in conjunction with
investment advisory services as described below.
Financial Planning services may include some or all the following services (other customized
services may also be available):
Preparation of Net Worth Statement
Review of cash flow and annual spending along with annual budgeting
Retirement planning
o How much do I need to save?
o How much can I spend?
o Can I accomplish my goals and dreams?
o Alternative options available if my resources are not sufficient to achieve my
goals.
o Monte Carlo projections of the chances of success of retirement and other
goals.
Ongoing, Annual Tax Planning
o Create annual projections to identify areas of tax savings and identify
potential tax issues.
Future, long‐term tax planning projections
o Implement ideas now to provide long‐term tax efficiency.
Estate & Legacy Planning
o Assist in developing an outline for an estate plan and employ the services of
a licensed attorney to create the appropriate documents.
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Small Business Planning
o Succession and transition.
o Buy/Sell arrangements.
o Retirement plans.
o Tax planning.
Social Security Maximization
o Impact of delaying Social Security.
o Optimal method and time to take Social Security.
Pension analysis
o Taking a lump sum versus a lifetime income stream.
Education Planning
o How to best plan and fund children’s, grandchildren or other family
members education.
o Optimal investment vehicles to utilize.
Charitable Planning
o How to efficiently support charitable or other non‐profit organizations.
Insurance Review and Risk Analysis
o Is current insurance adequate?
o Should additional insurance be obtained to cover unprotected risks?
Review of asset allocation
o After the plan has been completed and in accordance with the client’s risk
tolerance, risk capacity and long‐term growth rate required by the plan.
Information is obtained from personal interviews, questionnaires and online date aggregation
software. During the initial stages of developing a financial plan, several meetings spaced at
regular intervals a couple weeks apart are required. Subsequent meetings will follow a
consistent review schedule to monitor and update the plan.
Most plans are reviewed and modified during these planning meetings and future regular
reviews. Electronic and/or hard copies of plans are available upon request. Clients also have the
ability through a client portal to access information online.
Detailed investment advice and specific recommendations may be provided as part of a financial
plan. Implementation of the recommendations is at the discretion of the client.
FOCUS formulates financial plans based on the information provided by the client. Inaccurate or
incomplete information may result in an inaccurate or incomplete financial plan. To create a
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financial plan, FOCUS makes certain assumptions with respect to interest and inflation rates,
past trends, and future projections of the performance of the market and economy. Past
performance is no indication of future performance, and future market results may differ
substantially from our projections, and, thus, FOCUS cannot offer any guarantees or promises
that clients’ goals and objectives will be met. Changes to the client’s personal financial
circumstances, goals, or objectives may cause the financial plan to become inaccurate and out
of date. FOCUS recommends that clients promptly notify us of any changes so that the financial
plan can be updated.
Investment Advisory Services Most financial planning clients also choose to have FOCUS provide investment advisory
services to manage their assets on a discretionary basis. Although FOCUS recommends that
a financial plan be prepared first, to provide a thorough understanding of the client’s
financial circumstances and objectives, investment advisory services may also be available
on a stand‐alone basis, without financial planning services.
FOCUS’ investment advisory services considers the client’s individual personal and financial
circumstances, investment objectives, tolerance and capacity for risk (as disclosed to FOCUS
in response to discussions with the client or in responses to a questionnaire), cash flow
needs and consideration of income tax and estate tax concerns. FOCUS’ investment
advisory services would also include, as appropriate, the following:
Evaluate the client’s current holdings, strategy and goals.
Provide assistance in identifying a target portfolio asset allocation.
Consider tax ramifications of making changes to the current portfolio.
Manage concentrated positions and provide recommendations on how to hedge
these positions or create a plan to reduce the concentrated position.
If a client prefers that certain stocks or sectors are excluded or would like to employ
environmental, social and governance (ESG) criteria, this can be accommodated.
Utilize asset location as much as possible to effectively locate their investments in
the most tax efficient accounts.
Utilize tax harvesting, the process of offsetting gains with losses from investments
to reduce the tax burden on an annual basis.
Clients are responsible for providing FOCUS with information regarding their personal
financial circumstances, investment objectives, and tolerance for risk, Clients are also
required to notify FOCUS of any changes in their personal financial circumstances,
investment objectives, goals, cash needs, and other information pertinent to their financial
situation.
Although the Investment Advisory Agreement is an ongoing agreement and constant
adjustments are required, the length of service to the client is at the client’s discretion. The
client or FOCUS may terminate an Agreement by verbal or written notice to the other party.
Occasionally, depending on the complexity of financial services in relation to the amount of
assets under management, FOCUS may charge a fixed fee for its combined financial planning
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and investment advisory services. In addition, FOCUS reserves the right to provide services
at no charge to family and friends.
Assets are invested primarily in individual stocks, exchange traded funds (ETFs), insured
certificates of deposit, no‐load mutual funds, exchange‐listed options contracts, individual
treasury, corporate or municipal bonds, and exchange‐traded notes (ETNs). Custodians may
charge a transaction fee for the purchase or sale of securities; however, FOCUS makes every
effort to keep transaction fees for purchase and sales as low as possible.
FOCUS typically conducts periodic reviews, and regularly sends investment reports to our
clients along with their billing statements.
If FOCUS is providing discretionary asset management, FOCUS places trades for clients
under a limited power of attorney.
As noted above, FOCUS may recommend that a Client implement the sub‐advisory services
of Pinnacle for discretionary investment management services. FOCUS will assist and advise
the Client in establishing investment objectives, selection of investment strategies and
communications with Pinnacle. FOCUS will serve as the Client’s primary advisor and
relationship manager for the account(s). FOCUS will also provide ongoing oversight of
Pinnacle’s investment strategy(ies) to ensure they are managed consistent to the
investment mandate(s).
FOCUS does not receive any compensation, in any form, relating to the purchase or sale of
specific investments.
Initial public offerings (IPOs) are not available through FOCUS.
Continuity and Succession Focus has entered into a continuity planning agreement with Pinnacle in the event of Jon
Aldrich’s death, disability or retirement. This arrangement provides for the continued
operation of Focus that would give Focus clients the opportunity to become clients of
Pinnacle should one of these qualifying events occur. This agreement is revocable at any
time, for any reason, and Pinnacle currently does not hold any equity interest in Focus.
Termination of Agreement The client or FOCUS may terminate an Agreement by verbal or written notice to the other
party.
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Description FOCUS generally bases its fees on a percentage of assets under management, hourly
charges, or fixed fees.
The firm’s compensation is solely from fees paid directly by clients. The firm does not
receive commission based on the client’s purchases of any financial product. No
commissions in any form are accepted.
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The Investment Advisory Services fee is based on a percentage of the investable assets
according to the following schedule:
Investable Assets Annual Advisory Fee First $500,000 1.00%
Next $500,000 0.85%
Next $4,000,000 0.60%
Over $5,000,000 Negotiable
Unless otherwise directed by client in writing, investable assets include all assets in client
accounts that FOCUS manages. This may include cash, cash equivalents, promissory notes,
or investment positions acquired prior to the inception of the advisory relationship,
acquired directly by the client, or held at the client’s direction. Client may notify FOCUS in
writing of any assets held in client accounts that should be excluded from management by
FOCUS, and therefore excluded from investable assets upon which fees are assessed.
Typically, there is no minimum annual fee; however, FOCUS reserves the right to impose a
minimum fee in certain circumstance. Such minimum fee would be set forth in the fee
schedule attached to the advisory agreement
. Current client relationships may exist where
the fees are higher or lower than the fee schedule above.
The fee for a financial plan is predicated upon the facts known at the start of the
engagement. The fee range is typically $3,500 to $10,000 but may exceed this range due to
the complexity of the planning engagement. The fee is negotiable, and the client’s specific
fee is set forth in the fee schedule attached to the financial planning agreement. If the
client’s situation is substantially different than disclosed at the initial meeting, a revised fee
will be provided for mutual agreement. The client must approve the change of scope in
advance of the additional work being performed when a fee increase is necessary.
FOCUS reserves the right to adjust or waive the financial planning fee if a client chooses to
engage our investment advisory services.
Hourly services for clients who need advice on a limited scope of work. The typical hourly
rate for limited scope engagements is $300 an hour
Use of Investment Sub‐Advisor – For Clients referred by FOCUS to Pinnacle, the Client’s fee
may be deducted from the Clients account(s) by FOCUS and/or Pinnacle. Sub‐advisory fees
will be disclosed in the sub‐adviser’s Form ADV Part 2.
FOCUS’ fees are negotiable.
Fee Billing For financial planning services, the fee is established in the fee schedule attached to the
financial planning agreement. Generally, half of the fee is due upon signing the agreement,
and the balance is due within 90 days thereafter.
For investment advisory services, clients may elect whether to pay their fees in advance (for
the upcoming billing period) or in arrears (for the past billing period). Fees are usually
deducted from client accounts with the client’s authorization, but clients may also elect to
be invoiced directly for their fees. Typically, each billing period is three calendar months,
however in limited cases some clients may be billed on a monthly, semi‐annually, or annual
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basis. The details of each client’s specific fee arrangement are documented in the fee
schedule attached to the advisory agreement. Fee schedules may be updated by providing
written notice to clients at least 90 days prior to the effective date of the changes.
Typically, the initial billing period will commence on the first day of the calendar month after
which investable assets are received by the custodian. For the initial billing period, fees are
based on the portfolio value at the beginning of the billing period. For subsequent billing
periods, fees are based on the portfolio value on the last day of the prior billing period.
For clients who terminate their advisory agreement, fees are assessed through the end of
the month in which the notice of termination occurs. Fees will be adjusted based on the
number of months of service in the billing period, including the month of termination,
divided by the total number of months in the billing period. If fees are paid in advance,
prorated fees for a partial billing period will be refunded. If fees are paid in arrears, fees will
be based upon the portfolio value upon the date of termination.
Fees will be adjusted for cash inflows (deposits) or outflows (withdrawals) which occur
during a billing period, based on the number of days in the billing period prior to the cash
flow divided by the total number of days in the billing period. However, fee adjustments for
cash flows less than $50,000, or adjustments of $50 or less, will not be applied.
Other Fees All fees paid to FOCUS for investment advisory services are separate and distinct from the
fees and expenses charged by mutual funds and/or ETFs to their shareholders. These fees
and expenses are described in each fund's prospectus and FOCUS does not receive any
portion of these fees. These charges will generally include a management fee, fees to cover
administrative expenses, and may occasionally include 12b‐1 fees, although FOCUS makes
every effort to avoid 12b‐1 fees. If the fund also imposes sales charges, a client may pay an
initial or deferred sales charge. A client could invest in a mutual fund directly, without our
services. In that case, the client would not receive the services provided by our firm which
are designed, among other things, to assist the client in determining which mutual fund or
funds are most appropriate to each client's financial condition and objectives. Accordingly,
the client should review both the fees charged by the funds and our fees to fully understand
the total amount of fees to be paid by the client and to thereby evaluate the advisory
services being provided.
Additional Fees and Expenses In addition to our advisory fees, clients are also responsible for the fees and expenses
charged by custodians and imposed by broker dealers, including, but not limited to, any
transaction charges imposed by a broker dealer with which an independent investment
manager effects transaction for the client's account(s). FOCUS does not receive any portion
of these charges. Please refer to the "Brokerage Practices" section (Item 12) of this Form
ADV for additional information.
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Description FOCUS generally provides investment advice to individuals, trusts, estates, or charitable
organizations, corporations or business entities.
Account Minimums FOCUS does not impose a minimum level of assets or net worth to receive its financial
planning services on a stand‐alone basis. For investment advisory services, FOCUS requires a
minimum of $500,000 in investable assets. However, this minimum may be waived at
FOCUS’ discretion.
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Methods of Analysis Security analysis methods may include fundamental analysis, and technical analysis.
Fundamental analysis is a method of evaluating securities in an attempt to measure their
intrinsic value by examining related economic, financial, and other qualitative and
quantitative factors. Technical analysis evaluates securities in an attempt to forecast future
movements based on past data.
FOCUS relies on information from various market and research companies to which we
subscribe.
Other sources of information include traditional and online financial commentary,
inspections of corporate activities, research materials prepared by others, corporate rating
services, prospectuses, research from Charles Schwab & Company (Schwab), Fidelity
Brokerage Services, LLC (Fidelity), Morningstar, Y‐Charts, Pinnacle Advisory Solutions and
other company press releases and regulatory filings.
Investment Strategies The primary investment strategies we use for clients include a combination of strategic and
tactical asset allocation. Portfolios are diversified across a variety of asset classes to reduce
volatility and control risk.
The investment strategy for a specific client is based upon the objectives stated by the client
during consultations and/or as FOCUS deems necessary for the success of the financial plan.
The client may change these objectives at any time.
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Risk of Loss All investment programs have certain risks that are borne by the investor. Our investment
approach attempts to reduce this risk by diversifying across several different asset classes
that may have different risk and return characteristics. However, as with all investments,
clients should keep the risk of loss in mind. A fund’s specific risks will be outlined in that
fund’s prospectus. Potential risks may include the following:
Principal Risk. There is a risk that the price received when an investment is sold may be less
than the price for which it was purchased, resulting in a loss of the principal amount
invested.
Interest‐rate Risk. Changes in interest rates may cause investment prices to change. For
example, when interest rates rise, yields on bonds become less attractive, causing their
market values to decline.
Market Risk. The price of an investment may drop in reaction to market conditions, such as
those triggered by political, economic, or social events. This is also referred to as systematic
risk.
Manager Risk. The value of investments will vary with the success or failure of the asset
manager’s investment strategies, research, analysis, and determination of portfolio
securities.
Inflation Risk. When any type of inflation exists, a dollar in the future will have less
purchasing power than a dollar today. Inflation risk exists for all security types except for
inflation‐linked bonds, adjustable bonds, or floating rate bonds.
Currency Risk. If an investment is valued in currencies other than the U.S. dollar, changes in
foreign currency exchange rates may affect the value of the investment. This risk is often
higher for investments in emerging capital markets.
Reinvestment Risk. If a fixed‐income security is sold, there is a risk that the proceeds may
not be reinvested in a security with a comparable return.
Business Risk. If a company experiences a period of poor earnings, financial failures, or
bankruptcy, the value of its stock may decrease in value.
Liquidity Risk. Some securities cannot be traded in a timely manner without experiencing a
loss. There may be a lack of interest in the market, forcing the security to be sold for less
than its value.
Financial Risk. The risk that a firm will be unable to meet its financial obligations. A high
proportion of debt increases the likelihood that the firm will be unable to make required
principal and interest payments.
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Legal and Disciplinary We are required to disclose any legal or disciplinary events that are material to a client's or
prospective client's evaluation of our advisory business or the integrity of our management.
Our firm and our management personnel have no reportable disciplinary events to disclose.
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Affiliations FOCUS is not registered as a broker‐dealer, and no affiliated persons are registered
representatives of a broker‐dealer. Neither the firm nor any affiliated persons are registered
as a futures commission merchant, commodity pool operator, or commodity trading
advisor.
FOCUS has engaged Pinnacle as an investment sub‐advisor to provide discretionary
investment management services.
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Transactions, and Personal Trading Code of Ethics The employees of FOCUS have committed to a Code of Ethics and Fiduciary Oath as outlined
by the National Association of Personal Financial Advisors (NAPFA). The key points are
putting the clients’ interest first, objectivity, confidentiality, competence, fairness and
suitability, integrity and honesty, regulatory compliance, full disclosure and professionalism.
The firm will provide a copy of the Code of Ethics to any client or prospective client upon
request.
Participation or Interest in Client Transactions FOCUS and its employees may buy or sell securities that are also held by clients. In some
cases, trades for FOCUS’ employee accounts may be aggregated with trades for clients. In
such case, FOCUS’ policy prohibits allocating trades in such a way that FOCUS’ employee
accounts receive more favorable treatment than client accounts. Because FOCUS uses
multiple custodians, it is possible that employee accounts may be included in a block trade
for one custodian that is traded prior to the block trade for another custodian, and thus
these employee accounts may be traded ahead of client accounts. As a result, the execution
price in the employee accounts may be higher or lower than the price obtained in client
accounts. See additional information regarding Order Aggregation in Brokerage Practices
below. Employees are required to comply with the provisions of the FOCUS
Compliance
Manual.
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Personal Trading The Chief Compliance Officer of FOCUS is Martha Whitman. She reviews all employee trades
each quarter. Her trades are reviewed by Jon L. Aldrich, President. The personal trading
reviews ensure that the personal trading of employees does not affect the markets, and that
clients of the firm receive preferential treatment.
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Selecting Brokerage Firms In the event a client requests a recommendation of a broker‐dealer/custodian for execution
and/or custodial services, FOCUS generally recommends the services of Schwab, Fidelity,
and NATC, due to our existing relationships with these firms. Factors that affect our
selection of broker‐dealers/custodians include efficiency of processing transactions, the
ability to reduce trading costs with block trading, the overall economic benefit of the
relationship to FOCUS and to client portfolios, the value of our ongoing relationship, and the
reputation, financial strength, and stability of the firms. FOCUS does not receive fees or
commissions from any of these arrangements.
Custodians provide us the following: (a) receipt of client confirmation and statements; (b)
trade execution; (c) research, pricing and market data; (d) facilitation of payments of our
fees from client accounts; (e) access to information regarding practice management,
compliance and financial planning; (f) assistance with back office functions, recordkeeping,
and client reporting; (g) access to other third party vendors on a discounted fee basis with
discounts arranged by the custodians; and (h) conferences which advisors and employees
may attend to receive additional education on issues such as practice management,
marketing, investment theory, financial planning, business succession, regulatory
compliance and information technology. Receipt of these benefits creates a potential
conflict of interest and may directly or indirectly influence FOCUS to recommend the use of
Schwab, Fidelity, and NATC for custody and brokerage services. FOCUS mitigates this
potential conflict by periodically reviewing the services offered by competing custodians and
broker‐dealers and attempting to negotiate more favorable fees with these firms whenever
possible. Clients do not pay any additional fees as a result of our receiving these services
from the custodians.
Clients make the final choice regarding their custodian.
Trading Costs In some cases, FOCUS may recommend investment options for client portfolios that incur a
transaction fee when options without transaction fees are available if FOCUS determines
that such investment options are likely to be more beneficial to the client portfolios. For
example, funds with a front‐end transaction fee are generally institutional versions and will
often have a lower expense ratio that is more beneficial to client portfolios for long‐term
investments than another share class without a transaction fee that has a higher expense
ratio.
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Prime Brokerage When beneficial to the client, individual fixed‐income transactions may be effected through
broker‐dealers with whom FOCUS and/or the client have entered into arrangements for
prime brokerage clearing services, including effecting certain client transactions through
other SEC registered and FINRA member broker‐dealers (in which event, the client generally
will incur both the transaction fee charged by the executing broker‐dealer and a “trade
away” fee charged by the account custodians).
Best Execution FOCUS reviews the execution of trades at each custodian semi‐annually. Trading fees
charged by the custodians are also reviewed on a semi‐annual basis. We have periodic
conversations with our custodians to discuss services and fees, including trading fees, and
attempt to negotiate more favorable rates whenever possible. FOCUS does not receive any
portion of the trading fees.
Soft Dollars FOCUS receives a software maintenance interface at no charge from Schwab because some
client assets are custodied at Schwab. This partially offsets annual maintenance fees for our
portfolio management software. All clients benefit from this as it reduces the firm’s overall
expenses. The selection of Schwab as a custodian for clients is not affected by this nominal
adjustment.
Order Aggregation Many trades are mutual funds where trade aggregation does not garner any client benefit.
However, FOCUS will execute block trades on individual securities, stocks and ETF’s
whenever possible for our clients.
In cases where trade aggregation is beneficial, FOCUS may (but is not obligated to)
aggregate or “block” such orders for efficiency, to obtain best execution, or to allocate
equitably among clients the differences in prices that might have been obtained had such
orders been placed independently. Under this procedure, transactions will be averaged as to
price and will be allocated among clients in proportion to the purchase and sale orders
placed for each client account on any given day. Transaction fees are based on each
individual account holder’s allocation amounts, rather than the block trade amount. In the
rare instance that a block trade is not completely filled, the partial fill will be allocated
among the client accounts in proportion to the original order amount.
The timing of order submission will differ when submitted trades across multiple custodians.
When conducting trading, FOCUS will apply a rotation of the order of which custodians are
traded first. Clients may experience different execution prices when multiple clients trade
the same security. In addition, clients may experience different execution prices when
trades are not aggregated.
FOCUS selects and allocates investment opportunities among client accounts based on
several factors, including diversification requirements, long‐term goals, desired rate of
return for the success of the financial plan, duration, cash availability, client guidelines or
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restrictions, existing or targeted account weightings in particular securities or sectors, lot
size, account size, or the amount of existing holdings of the security in the accounts. These
factors provide substantial discretion to FOCUS in allocating investment opportunities. In
addition, FOCUS may also exclude certain accounts from an allocation if the size of the
allocation would not satisfy certain minimum thresholds. Periodic reviews of client and
account performance are conducted to ensure that trade allocations occur fairly and
equitably over time, even though a specific trade may have the appearance or the effect of
benefiting one account as against another when viewed in isolation.
Principal and Agency Cross Transactions FOCUS does not participate in principal transactions, where an adviser buys securities from
or sells investments to clients from its own account.
Occasionally, FOCUS may participate in an agency cross trade transaction with respect to
fixed‐income securities. For example, in cases where one client desires to remove a fixed‐
income security from their portfolio but liquidating the security in the open market would
likely occur below the current market price because of the small quantity being traded.
Thus, it may be more beneficial to transfer the security to another client portfolio that can
realize the benefits of the security at the current market price. Cross transactions only occur
when there is a need and when the security meets the purchasing client’s investment
objectives and is reasonably priced. Independent prices for securities involved in cross
transactions are obtained from independent broker‐dealers. No commissions or
compensation are received by FOCUS or any of its associated persons. FOCUS provides
written notification to affected clients of the capacity in which FOCUS is acting and has
already received written consent from affected clients for the transaction. FOCUS will
provide reports on an annual basis to affected clients which provide a summary of the cross
transactions which occurred during the year.
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Periodic Reviews Accounts are continually monitored. Reviews are performed regularly by Jon L. Aldrich,
President.
Review Triggers Other conditions that may trigger a review are large cash inflows or outflows in the account,
changes in the tax laws, changes in the economic or political environment, fund manager
changes, new investment information becomes available, and changes in a client's personal
situation.
Regular Reports In addition to the monthly and/or quarterly statements and confirmations of transactions
that clients receive from their custodian, FOCUS will also periodically provide investment
reports summarizing account balances and holdings.
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Incoming Referrals FOCUS does not compensate referring parties for any referrals.
Referrals Out FOCUS does not accept referral fees or any form of remuneration from other professionals
when a prospect or client is referred to them.
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Account Statements All assets are held at qualified custodians who provide account statements directly to clients
at their address of record at least quarterly. Assets are held in accounts registered in the
client’s name.
It is not our practice to have physical custody of client accounts. However, we are deemed
to have custody in cases where we have the authority to debit our management fees from
client accounts. In addition, we are deemed to have custody of the accounts of one client
for whom we have the authority to transfer, withdraw or move funds from the client’s
accounts to a third party. In this case the client receives statements from the custodian on a
monthly basis, and we are subject to an annual surprise audit by an independent third party
to verify the assets in those accounts.
Investment Reports Clients are urged to compare the account statements received directly from their custodians
to the investment reports provided by FOCUS.
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Discretionary Authority for Trading With our investment advisory services, FOCUS accepts discretionary authority to manage
accounts on behalf of clients. FOCUS has the authority to determine, without obtaining
specific client consent, the securities to be bought or sold, and the amount of the securities
to be bought or sold. If FOCUS has been granted discretionary authority over a client’s
account, we may, as a courtesy, consult with the client prior to trading; however, we are not
required to do so and may trade without contacting the client in advance.
FOCUS does not receive any portion of the transaction fees or commissions paid by the
client to the custodian on trades.
Discretionary trading authority facilitates placing trades in client accounts so that we may
promptly implement the appropriate portfolio investment allocation. A limited power of
attorney is obtained to provide discretionary authority for trading.
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Non‐Discretionary Authority for Trading FOCUS also manages some client accounts on a non‐discretionary basis. Account supervision
is guided by the client's stated objectives (i.e., maximum capital appreciation, growth,
income, or growth and income), as well as tax considerations.
Clients that determine to engage FOCUS on a non‐discretionary investment advisory basis
accept that FOCUS cannot affect any account transactions on the client’s behalf. Thus, the
timing of when trades are implemented by the client are beyond the control of FOCUS.
Our financial planning services are provided on a non‐discretionary basis. The client is free
to choose whether to implement any or all our recommendations.
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Proxy Votes FOCUS does not accept responsibility for voting proxies for securities for clients for whom it
provides non‐discretionary financial planning and investment advice. Those clients are
responsible for voting proxies and will receive proxy notices and other solicitations directly
from their custodian. Non‐discretionary clients may contact FOCUS to discuss any questions
they may have with a particular proxy notice or solicitation by writing to 6870 Rote Road,
Suite 101, Rockford, Illinois 61107, or calling (815) 633‐8844.
Under our discretionary investment advisory services, clients elect on their account
applications whether to reserve the right to vote proxies, or to appoint FOCUS to do so on
their behalf. If FOCUS is appointed to vote proxies on a discretionary basis, we will for do so
in accordance with our proxy voting policy. The following information briefly summarizes
such policy.
Guiding Principles ‐ FOCUS' Policy and Procedures relating to voting proxies are designed to
ensure that proxies are voted in the best interests of the clients. The Policies and
Procedures do not apply to those situations where the client has retained voting discretion.
In those situations, FOCUS will cooperate with the client to ensure proxies are voted as
directed by the client. In addition, FOCUS will abide by specific voting guidelines on certain
policy issues as requested by particular clients on a case‐by‐case basis.
Primary Objective ‐ In general, proxies will be voted in a manner designed to maximize the
value of client investments. In evaluating a particular proxy proposal, FOCUS will take into
consideration, among other things, the period of time over which the voting shares of the
company are expected to be held, the size of the position, the costs involved in the proxy
proposal and the existing governance documents of the affected company, as well as its
management and operations. Proxy proposals that change the existing status of a company
will be reviewed to evaluate the desirability of the change, and to determine the benefits to
the company and its shareholders, but FOCUS’ primary objective is always to protect and
enhance the economic interests of its clients.
Generally, it is FOCUS’ policy to vote in accordance with management’s recommendations
on most issues since the capability of management is one of the criteria used by FOCUS in
selecting securities.
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Exceptions ‐ When FOCUS believes management is acting on its own behalf, instead of on behalf of
the well‐being of the company and its shareholders, or when FOCUS believes that management is
acting in a manner that is adverse to the rights of the company’s shareholders, FOCUS will take steps
to represent the interests of its clients and, as a result, may elect to vote against management’s
recommendations.
In situations where FOCUS is extremely displeased with management’s performance, it may withhold
votes or vote against management’s slate of directors and other management proposals as a means
of communicating its dissatisfaction. This occasion most often develops when FOCUS believes that
management has displayed a consistent inability or lack of interest in moving the company toward
achieving its potential and that a message needs to be sent that the company’s shareholders are not
satisfied with the status quo.
Other Factors FOCUS Considers ‐ FOCUS recognizes that the activity or inactivity of a company with
respect to matters of social, political or environmental concern may have an effect upon the
economic success of the company and the value of its securities. However, FOCUS does not consider
it appropriate, or in the interests of its clients, to impose its own moral standards on others.
Therefore, it normally supports management’s position on matters of social, political or
environmental concern, except where it believes that a different position would be in the economic
interests of company shareholders.
Conflicts ‐ In evaluating a proxy proposal, FOCUS' Chief Compliance Officer is ultimately responsible
for considering whether there are any circumstances that may give rise to a conflict of interest in
connection with voting client proxies either because of a business relationship between FOCUS and
the company or otherwise.
Voting Procedures ‐ All proxy proposals are voted on an individual basis. In general, when a conflict
exists, the Chief Compliance Officer determines whether the proxy may be voted by FOCUS or
whether it should be referred to the client (or another fiduciary of the client) for voting purposes.
Alternatively, FOCUS may consult directly with a client to obtain the client’s consent before voting the
proxies. FOCUS will not refrain from voting proxies just because a conflict exists because FOCUS has a
fiduciary duty to take action on all proxies.
How to Obtain More Information ‐ For additional information regarding FOCUS’ proxy voting policies
and procedures, including information on how FOCUS voted proxies, clients should contact us by
writing to 6870 Rote Road, Suite 101, Rockford, Illinois 61107, or calling (815) 633‐8844.
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Financial Condition FOCUS does not under any circumstances require or solicit payment of fees more than six
months in advance of services rendered. Therefore, we are not required to include a
financial statement.
FOCUS, as an advisory firm that maintains discretionary authority for client accounts, is also
required to disclose any financial condition that is reasonably likely to impair our ability to
meet our contractual obligations.
FOCUS has no additional financial circumstances to report.
FOCUS has not been the subject of a bankruptcy petition at any time.
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Brochure Supplement (Part 2B of Form ADV) Item 1: Firm Information Focus Wealth Planning, Inc.
d/b/a Focus Financial Advisors Telephone: 815‐633‐8844
6870 Rote Road, Suite 101 Toll‐Free: 800‐687‐6551
Rockford, IL. 61107‐2690 Facsimile: 815‐633‐2108
www.focusfinancialadvisors.com
[email protected] Item 2: Educational, Background and Business Experience Full Legal Name: Jon L. Aldrich Born: 1967
Education: Northern IL University; BS, Accounting; 1990
Business Experience: Focus Wealth Planning, Inc.; President and owner from 08/01/2018 to current
Focus Financial Advisors, Inc.; President from 04/18/2015 to 07/31/2018
Focus Financial Advisors, Inc.; Principal from 12/04/2004 to 04/18/2015
National Detroit Inc.; CFO from 1999‐2004
RSM McGladrey, LLP; Manager from 1990‐1999
Designations:
Jon L. Aldrich has earned the following designations and is in good standing with the
granting authority:
CFP®, Certified Financial Planner. The CFP® certification is granted by Certified
Financial Planner Board of Standards, Inc.
o The CFP® certification is a voluntary certification; no federal or state law or
regulation requires financial planners to hold CFP® certification. It is recognized
in the United States and a number of other countries for its (1) high standard of
professional education; (2) stringent code of conduct and standards of practice;
and (3) ethical requirements that govern professional engagements with clients.
Currently, more than 71,000 individuals have obtained CFP® certification in the
United States.
o To attain the right to use the CFP® mark, an individual must satisfactorily fulfill
the following requirements:
Education – Complete an advanced college‐level course of study addressing
the financial planning subject areas that CFP Board’s studies have
determined as necessary for the competent and professional delivery of
financial planning services, and attain a Bachelor’s Degree from a regionally
accredited United States college or university (or its equivalent from a
foreign country). CFP Board’s financial planning subject areas include
insurance planning and risk management, employee benefit planning,
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investment planning, income tax planning, retirement planning, and estate
planning.
Examination – Pass the comprehensive CFP® Certification Examination. The
examination, administered in 10 hours over a two‐day period, includes case
studies and client scenarios designed to test one’s ability to correctly
diagnose financial planning issues and apply one’s knowledge of financial
planning to real world circumstances.
Experience – Complete at least three full years of full‐time financial
planning‐related experience (or equivalent, measured as 2,000 hours per
year); and
Ethics – Agree to be bound by CFP Board’s Standards of Professional
Conduct, a set of documents outlining the ethical and practice standards for
CFP® professionals.
o Individuals who become certified must complete the following ongoing
education and ethics requirements in order to maintain the right to continue to
use the CFP® mark:
Continuing Education – Complete 30 hours of continuing education every
two years, including two hours on the Code of Ethics and other parts of the
Standards of Professional Conduct, to maintain competence and keep up
with developments in the financial planning field; and
Ethics – Renew an agreement to be bound by the Standards of Professional
Conduct. The Standards prominently require that CFP® professional provide
financial planning services at a fiduciary standard of care. This means CFP®
professionals must provide financial planning services in the best interests
of their clients.
o CFP® professionals who fail to comply with the above standards and
requirements may be subject to the CFP Board’s enforcement process, which
could result in suspension or permanent revocation of their CFP® certification.
CPA, Certified Public Accountant. This program is the statutory title of qualified
accountants in the United States who have passed the Uniform Certified Public
Accountants Examination and have met additional state education and experience
requirements for certification as a CPA. In addition to passing the CPA examination
candidates must also complete qualifying work experience of one year; and requires
that they undergo 120 hours of CPE (continuing professional education) for renewal
every three years.
Item 3: Disciplinary Information Jon L. Aldrich has no reportable disciplinary history.
Item 4: Other Business Activities Jon L. Aldrich is not engaged in any other investment related activities or non‐investment‐
related activities or other business or occupation.
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Item 5: Additional Compensation Jon L. Aldrich does not receive commissions, bonuses, or other compensation on the sale of
securities or other investment products. Nor does he receive any economic benefit from a
non‐advisory client for the provision of advisory services.
Item 6: Supervision Jon L. Aldrich is responsible for all internal supervision, formulation and monitoring services
offered to our clients. Jon can be reached at 815/633‐8844.
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