Item 2 - Material Changes

Transcription

1 NFG Wealth Advisors LLC 1550 Madruga Avenue Suite 500 Coral Gables, Fl Form ADV Part 2A March 21 st, 2018 Item 1 Cover Page This brochure provides information about the qualifications and business practices of NFG Wealth Advisors LLC. If you have any questions about the contents of this brochure, please contact us at or aneto@nfgwealth.com. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority. While the firm is registered, it does not imply a certain level of skill or training on the part of the firm or its personnel. Additional information about NFG Wealth Advisors also is available on the SEC s website at You can look up company specific information by a unique identifying number called a CRD number. The CRD number for NFG Wealth Advisors is

2 Item 2 - Material Changes Investment advisors must update the information in their brochure at least annually. Pursuant to SEC Rules, we will ensure that you receive a summary of any material changes to this and subsequent Brochures within 120 days of the close of our business fiscal year. We may further provide other ongoing disclosure information about material changes and a new Brochure as necessary based on changes or new information, at any time, without charge. Copies of our Brochure may be requested by contacting Arturo Neto at or aneto@nfgwealth.com without charge. Additional information about NFG Wealth Advisors LLC is available on the SEC website The SEC website also provides information about any affiliated persons of NFG Wealth Advisors LLC and whom are registered or required to be registered as investment advisor representatives. Amendments to Form ADV Part 2A, Disclosure Brochure This section describes the material changes to NFG Wealth Advisors Brochure since its last filing on February 5th Clients wishing to receive a copy of our current Brochure, dated March 21 st, 2018, may request a copy at no charge by contacting us at Item 14 Client Referrals and Other Compensation We have updated this section to reflect compensation arrangements entered into for referral and lead generation services. Form ADV Part 2A 2

3 Item 3 Table of Contents Item 1 Cover Page... 1 Item 2 - Material Changes... 2 Item 3 Table of Contents... 3 Item 4 - Advisor Business... 4 Item 5 - Fees and Compensation... 5 Item 6 - Performance-Based Fees and Side by Side Management... 6 Item 7 - Types of Clients... 6 Item 8 - Methods of Analysis, Investment Strategies, and Risk of Loss... 6 Item 9 - Disciplinary Information... 6 Item 10 - Other Financial Industry Activities and Affiliations... 6 Item 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading... 6 Item 12 - Brokerage Practices... 7 Item 13 - Review of Accounts... 7 Item 14 - Client Referrals and Other Compensation... 8 Item 15 - Custody... 8 Item 16 - Investment Discretion... 8 Item 17 - Voting Client Securities... 8 Item 18 - Financial Information... 8 Item 19 - Requirements for State-Registered Advisers... 8 Form ADV Part 2A 3

4 Item 4 - Advisor Business NFG Wealth Advisors is a full-service investment advisory firm providing wealth advisory services, investment strategy and research, and portfolio management to families, individuals, and institutional clients. It was founded in 2017 by Arturo Neto, who is 100% owner of the firm. Arturo Neto is the founder and Chief Investment Strategist at NFG Wealth Advisors where he offers wealth advisory and portfolio management services to individuals and small and mid-sized independent registered investment advisors. He was previously with EFG Capital where he co-led the planning, development, and implementation of the Investment Strategy Group. He led the firm s private placement due diligence efforts in addition to serving as a senior member of the team creating model portfolios, developing investment themes, managing tactical allocation strategies, monitoring portfolio management activities, conducting equity and mutual fund research, and preparing and delivering investment-related seminars and presentations. During his 20 years of experience in financial services, he was also the Investment Officer for a Latin American multi-family office specializing in hedge fund and private equity investments and he has worked in a variety of roles within financial planning and analysis and strategic finance consulting. His career includes positions at Accenture, Gap Inc. American Express, and State Farm Insurance, as well as project work in a variety of other Fortune 500 companies. During his consulting and corporate finance tenures, Arturo s primary focus was on practice management, process improvement, and financial analysis. Arturo graduated from Florida International University with a Bachelor s degree in Finance and a Master of Science in Finance degree and completed his Master of Business Administration degree from the Darden Graduate School of Business at the University of Virginia. He is also a CFA charter holder. He lives in South Miami and is married with one beautiful daughter. Services Offered Wealth Advisory Intergenerational Planning Portfolio Management Risk management and advisory Legacy Planning and Wealth Transfer Strategies Small business continuity planning Portfolio Management Fully customized portfolio management for UHNW individuals Investment Strategy Portfolio Analysis and Structuring Strategic and Tactical Asset Allocation - based on our research and customized to client models, we can provide recommendations on asset allocation changes to models or specific client portfolios on an ongoing basis. Asset Class Strategy - detailed analysis and recommendations on how to invest in specific asset classes (i.e. Within large caps, we may favor certain sectors over others, or prefer value over growth) Model Portfolios Management - provide model portfolios - down to the security level - for a variety of investor profiles and customized to use your investment philosophy and approach. Includes monthly performance tracking and commentary on return drivers and risk. Risk Management - evaluate positioning relative to models and mandates on an ongoing basis using risk analytic software and identifying gaps, risks, and opportunities within current portfolios. This service includes ongoing stress testing and scenario analysis. White labelled monthly summaries on model and portfolio asset allocation strategies, model portfolio performance results, forecasts, risks, recommendations and more. Form ADV Part 2A 4

5 Investment Analysis In-depth research on mutual funds, ETF's or individual securities provided through a combination of third party buy-side research firms and in-house proprietary analysis. Mutual Fund or ETF Analysis Research and Monitoring - using 3 rd party and in-house software and resources, we can provide an in-depth fundamental analysis of a fund - we analyze current or potential mutual fund and ETF's to identify best of breed fund managers within each asset class and provide ongoing monitoring to identify opportunities to improve the asset mix of manager selection. Securities Analysis and Research (Equities and Fixed Income) - For firms that invest in individual securities, we use a combination of buy-side research and in-house analysis to develop a list of recommended securities in both equities and fixed income with ongoing monitoring. Investment Modules - an investment module is a group of individual positions that share a common investment theme. Modules are a good way to introduce investing in individual securities to portfolios typically invested in mutual funds or ETFs. We use modules to more efficiently track the portfolio drivers of a specific group of stocks. Monthly Performance Measurement White labelled monthly summaries Alternative Due Diligence Includes both an investment and operational due diligence report and will include ongoing monitoring for the life of the investment for all approved managers when services are based on a retainer fee. Our fees include all expenses incurred to perform due diligence, including scheduled annual manager visit, documenting, and hiring of any third-party providers for additional services. Includes: Private Equity Hedge Funds Real Estate Private Placements Private Company Investments Services include Alternative Investment Due Diligence Alternative Investment Monitoring Alternative Manager List Access Monthly/Quarterly Reviews Item 5 - Fees and Compensation We may charge fees based on assets under management, fixed monthly retainer, or project-based depending on the type of client and services being provided. Our AUM fees for individuals are as follows and may either be deducted from client assets or billed: Account Size Fee/AU M Accounts up to $1,000,000 (model-based) 1.25% Accounts between $1,000,000 and $2,500,000 start at 1.00% additional amounts between $2,500,000 and $5,000, % additional amounts between $5,000,000 and $10,000, % additional amounts above $10,000, % Form ADV Part 2A 5

6 Our monthly retainer and project-based fees do not have a standardized fee schedule all fee arrangement are customized for each client based on a negotiated rate with each client. Both monthly fees and project-based fees are billed directly to client and are not deducted from client assets. Our retainer fee offerings start at $3,000 per month and will typically range somewhere between $2,000 and $6,000 per month depending on the breadth and depth of services being provided. Macro and asset allocation strategy is typically on the low end of the range while portfolio advisory and in-depth research on specific securities will be on the high end of the range. Project based fees are fully customized and are based on the breadth and depth of services provided. AUM-based fees will be billed monthly in arrears starting on the month after the initial agreement is signed. Some of our fees are paid in advance. For example, retainer fees require the first month s fee to be paid at the signing of a contract and each subsequent month s fees are to be paid in advance. Project based fees may be paid in whole or in part in advance. Project based fees paid 100% in advance typically receive a discount. Item 6 - Performance-Based Fees and Side by Side Management We do not currently receive any performance-based or side by side management fees. Item 7 - Types of Clients Our target clients are Ultra-High-Net-Worth (UHNW) individuals and families with investable assets of greater than $5MM; individuals with less than $5MM in AUM whose portfolios can be managed on a discretionary basis via model portfolios: and small to mid-sized advisory firms or wealth management divisions of small banks. Item 8 - Methods of Analysis, Investment Strategies, and Risk of Loss Our services are customized for each advisor, family office, and UHNW individual, and standardized for individuals that do not meet our minimum account size for customization. Therefore, our methodology and investment strategy will differ depending on each specific request from clients. For example, some clients may prefer concentrated portfolios with alternative assets, while others may prefer more diversified portfolios using only mutual funds and ETFs. Each strategy and methodology will have a unique risk/return profile and clients are informed of these characteristics both before and during the time we are working together. Item 9 - Disciplinary Information As of the date of filing of this Brochure, there were no material disciplinary or legal events that would have caused an investmentrelated business to lose its authorization to do business. Item 10 - Other Financial Industry Activities and Affiliations None to report Item 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading As Chartered Financial Analysts, we must adhere to the Code of Ethics and Standards of Professional Conduct of the CFA Institute as briefly summarized below: Form ADV Part 2A 6

7 Members of CFA Institute (including CFA charterholders) and candidates for the CFA designation ( Members and Candidates ) must: Act with integrity, competence, diligence, respect and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets. Place the integrity of the investment profession and the interests of clients above their own personal interests. Use reasonable care and exercise independent professional judgment when conducting investment analysis, making investment recommendations, taking investment actions, and engaging in other professional activities. Practice and encourage others to practice in a professional and ethical manner that will reflect credit on themselves and the profession. Promote the integrity and viability of the global capital markets for the ultimate benefit of society. Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals. We do not buy or sell securities for client accounts any securities in which a related person has a material financial interest nor do we buy or sell securities to our clients, nor do we solicit client investments as general partner in a partnership. We may, on occasion, recommend to our clients securities that we may also be invested in as well as recommend to clients that they sell securities that we may be invested in. Our advice to clients is very specific to their unique circumstances and our recommendations to them may or may not be consistent with the investments we are invested in. Since we primarily advise other advisors, we disclose to them when the firm or any related person may be invested in any of the securities we recommend for their model portfolios. Arturo Neto is currently enrolled in the CPWA program and must also adhere to the Code of Professional Responsibility as per the Investments and Wealth Institute. Item 12 - Brokerage Practices We are currently in the process of building a service around discretionary portfolio management, which may be managed in the Interactive Brokers platform, with whom we have an institutional account. We also serve as consultants to clients with an established broker-dealer of their choosing and have not received nor intend on receiving any benefits, soft or otherwise, from any broker-dealer. For customized accounts we may allow clients to maintain custody at a custodian of their choice and use a limited power of attorney to initiate trades. Item 13 - Review of Accounts Our discretionary managed portfolios are continuously monitored with more robust analysis on each portfolio completed at least monthly. Our model portfolios are similarly monitored and analyzed on a monthly basis for tactical allocation changes and or rebalancing. Our investment strategy and research services vary by client. Depending on the services agreed to, we may monitor macroeconomic factors, asset class allocations and strategies, and individual securities on an ongoing basis. Since our service is similar to that of an extended investment department for our clients, we are constantly monitoring the capital markets for potential opportunities and risks and to determine if and when positions should be changed. We may also initiate a more thorough review for a specific asset class allocation or specific security if new information warrants a deeper analysis of the position and how it is allocated in portfolios. We provide periodic reports to clients based on the services they have requested. Reports may be as often as weekly, are generally monthly, but could be quarterly and will contain customized information and data as per each client s specific request and customization. Form ADV Part 2A 7

8 Item 14 - Client Referrals and Other Compensation NFG Wealth Advisors compensates certain entities for referrals as follows: NFG Wealth has a third party marketing agreement with Global JACS, Inc.('Marketer") where Marketer has exclusive rights to market NFG Wealth Advisors' investment strategy and research services in Latin America. NFG Wealth compensates Marketer a percentage of revenues generated from clients referred by Marketer for an indefinite period so long as revenues continue to be generated from providing services to said clients. Our firm is also listed on the website of Paladin Research & Registry ( Investors use Paladin s online Registry service to be matched to vetted advisors and/or firms in their communities and to learn more about them. Investors may also use Paladin's Directory application to conduct their own searches for advisors and/or firms. In addition, investors have online access to documentation for our firm and/or professionals' credentials, ethics, business practices, and financial services. All professionals and firms pay various combinations of fixed and variable service fees to be profiled in Paladin's Registry and receive referrals to investors who use Paladin's matching and Directory services. Paladin uses these fees to provide free information and services to investors. Item 15 - Custody We do not have custody of client funds and therefore do not provide account statements. Item 16 - Investment Discretion For accounts managed on a discretionary basis, we first have clients' complete a thorough investment questionnaire and discuss the results of the questionnaire to determine each clients' investment profile that leads to a specific asset allocation strategy. The client's investment profile may include investment objectives, risk tolerance, time horizon, tax considerations, liquidity needs, cash flow needs, and any other considerations. Once agreed to, the client will sign an investment advisory agreement outlining the asset allocation strategy and any limitations highlighted during the onboarding process. Portfolios are then managed on an ongoing basis using both a top-down and bottom-up approach with fundamental analysis driving security selection. We customize portfolios for accounts with assets under management greater than $1MM. For accounts below $1MM, we offer a range of actively managed model portfolios a client is matched to based on the investment questionnaire and our assessment of their investment profile. Each model portfolio is then managed on an ongoing basis with detailed monthly analysis, tactical allocation, and rebalancing. Item 17 - Voting Client Securities We do not have nor will we accept authority to vote client securities. Since we do not have custody of client assets, clients should be receiving their proxies directly from their custodian or transfer agent. We may, however, provide clients with an explanation of options when clients are presented with an opportunity to vote on a security. We do this only to provide enough information to allow clients to make informed decisions. Item 18 - Financial Information We do not currently require or solicit fees for more than six months in advance. Item 19 - Requirements for State-Registered Advisers Our principal executive officer is Arturo Neto. Arturo Neto is the founder and Chief Investment Strategist at NFG Wealth Advisors LLC where he offers wealth advisory services to UHNW investors and families, portfolio management to individual investors, and consulting services to small and mid-sized independent registered investment advisors. He was previously with EFG Capital where he co-led the planning, development, and Form ADV Part 2A 8

9 implementation of the Investment Strategy Group. He led the firm s private placement due diligence efforts in addition to serving as a senior member of the team creating model portfolios, developing investment themes, managing tactical allocation strategies, monitoring portfolio management activities, conducting equity and mutual fund research, and preparing and delivering investmentrelated seminars and presentations. During his 20 years of experience in financial services, he was also the Investment Officer for a Latin American multi-family office specializing in hedge fund and private equity investments and he has worked in a variety of roles within financial planning and analysis and strategic finance consulting. His career includes positions at Accenture, Gap Inc. American Express, and State Farm Insurance, as well as project work in a variety of other Fortune 500 companies. During his consulting and corporate finance tenures, Arturo s primary focus was on practice management, process improvement, and financial analysis. Arturo graduated from Florida International University with a Bachelor s degree in Finance and a Master of Science in Finance degree and completed his Master of Business Administration degree from the Darden Graduate School of Business at the University of Virginia. He is also a CFA charter holder. Other Business On occasion, we may provide business consulting advice to small business owners of Neto Financial Group. The amount of time spent on these activities are minimal and are infrequent in nature. We are not compensated with performance-based fees nor have we been involved in any arbitration claims alleging damages in excess of $2500 Form ADV Part 2A 9