Pursuant to the provisions of Section 204 of The Investment Advisors Act of 1940, as amended by the “Brochure Rule”, Release No. 664 issued January 30, 1979, Jersey Shore Financial Advisors LLC (JSFA) periodically updates Form ADV, Part II. This rule requires that JSFA provide a written document containing all the information contained in Form ADV, Part II to all clients with whom the firm enters into an investment advisory or investment management contract. This document must be delivered to a client or prospective clients:
a) not less than 48 hours prior to executing a contract with JSFA, or
b) at the time of executing such contract, in which case the client has the right to terminate the contract with JSFA within five business days without penalty.
Part II of Form ADV, the Application for Registration as an investment advisor under the Investment Advisors Act of 1940, contains information relating to JSFA’s business. This information includes types of services offered and fees, types of clients served, types of investments generally recommended, methods of analysis, strategies employed, information sources utilized, educational and business backgrounds of management employees, participation in connection with securities transactions of clients, conditions for managing accounts, the nature of discretionary authority, the process for reviewing accounts and information about allocation of brokerage commissions.
The information regarding the investment advisor contained in Part II of Form ADV has not been passed upon or approved by the Securities and Exchange Commission (SEC) nor has the SEC passed upon or approved the qualifications or business practices of the investment adviser described in Form ADV Part II. The information contained herein relates to specific questions to which the SEC requests answers. The document is not meant to be a marketing brochure nor is it designed to provide detailed information about all aspects of JSFA’s business.
Advisory Services and Fees
a) JSFA estimates investment advisory revenues to account for 30% of revenue and 70% to come from consultations and/or furnishing advice to clients on matters not involving securities on more than an occasional basis.
b) The Registrant provides its clients (i.e. individuals, pension and profit sharing plans, trusts, and business entities) with financial planning, discretionary and non-discretionary investment management services.
c) Registrant offers investment advisory services for a percentage of assets under management, hourly charges, fixed fees (not including subscription fees).
Financial Planning Services: Registrant may provide its clients with a broad range of financial planning and consulting services (including non-investment related matters).
Exploration Process
Identify and prioritize:
Ø Life goals, both short and long-term;
Ø Financial objectives, both short and long-term;
Identify & categorize:
Ø Current non-financial and financial issues affecting goals;
Ø Expected non-financial and financial issues that could impact goals;
Gather and organize client’s data and documents:
Ø Current assets & liabilities;
Ø Current income & expenses;
Ø Current income tax;
Ø Current estate documents;
Ø Current risk management documents;
Analyze:
Ø Current financial condition;
Ø Current challenges and opportunities affecting goals & objectives;
Develop:
Ø Individualized strategies to put client on track to achieving life goals;
Ø Realistic strategies to support financial objectives;
Ø Appropriate investment strategy that attempts to support Client’s goals while remaining within client’s stated tolerance for volatility;
Ø Contingency plans for helping client prepare for or overcome the financial implications of current or potential life changing events (planned or unplanned);
Provide:
Ø Comprehensive written document containing:
· Goals & objectives;
· Observations & analysis;
· Recommendations and alternatives to help Client achieve goals;
Implement:
Ø Accepted recommendations:
· Cash flow items;
· Investment items;
· Risk management items;
· Retirement plans;
· Coordinate other advisors (attorney, accountant etc.)
Ongoing Financial Advice and Service
Ø • Annual review process:
· Priority review & adjustment of client’s short and long-term life goals;
· Priority review & adjustment of client’s short and long-term financial goals;
· Update written plan reflecting adjustments;
· Review and accept/implement updated plan;
· Review & advise on income tax related issues (Q3 & Q4);
· Coordinate other items to be implemented, updated etc.;
Investment Supervision
Registrant does not manage investments on behalf of clients. Registrant may, during the financial planning process, review client’s investment plans and if necessary suggest a third party asset manager (TPAM). The TPAM will charge their own management, platform and/or transaction fees as indicated on their independent disclosure documents presented during proposal/application process. Registrant does not share in those fees. Registrant may receive access to investment research, reporting, marketing, technology assistance and other tools from the TPAM.
Registrant will bill for investment advisory and/or supervision subject to written contract between registrant and client. This fee is separate and distinct from financial planning fees. Investment supervision will include the following services:
· Identification client’s investment goals & objectives;
· Development of written Investment Policy Statement for assets directly under registrant’s supervision;
· Identification of suitable third-party investment manager(s);
· Periodic reporting as required by regulation;
· Periodic review and discussion with client as to account performance and continued TPAM suitability;
· Tax loss harvesting (where applicable/possible);
Registrant cannot warranty the accuracy or validity of data provided by third parties nor will registrant take responsibility for investment performance.
Registrant’s investment supervision fees and/or financial planning fees although not negotiable, are subject to adjustment, waiver and/or other modification at the sole discretion of registrant. Adjustment, waiver and/or modification may be made to accommodate a referral or family member of a client, family member of registrant, or in certain pro bono casework.
Financial planning
The Financial Planning fee is determined on a case by case basis, taking into consideration the availability & quality of data as well as the breadth & scope of work to be completed.
1) Types of clients
The Registrant provides Investment Advisory services to Individuals, pensions and profit sharing plans, trusts, estate and charitable organizations as well as corporations or other business entities.
2) Registrant offers advice to clients on equity securities (exchange listed securities, securities traded over-the-counter, foreign issuers), corporate debt, certificates of deposit, municipal securities, investment company securities (variable life insurance, variable annuities, mutual fund shares), United States Government securities, interests in partnerships (real estate, oil & gas interests)
3) Methods of Analysis, Sources of Information and Investment Strategies
Registrant relies on the analysis, information gathering and the investment strategy of the Third Party Asset Managers (TPAM) for investment management. Registrant may complete research related to overall economic condition of the economy (domestic or foreign), certain industry, certain sectors of the economy etc.
Registrant may from time to time subscribe to commercially available sources and rely on said information although registrant cannot guarantee the accuracy of these sources.
Registrant may rely on information gathered from industry journals, periodicals and print or Internet based sources. Examples: Journal of Financial Planning, Investment Advisor Magazine, Financial Planning Magazine, Wall Street Journal, New York Times online, CNN Money.com.
Strategies recommended will be derived from a though analysis of the client situation, goals, objectives, investment experience, time horizon and risk tolerance.
4) Education & Business Standards
All individuals that give investment advice on behalf of the Registrant must have earned a college degree and/or have substantive investment-related experience. In addition, all such individuals shall have attained all required investment-related licenses and/or designations as necessary in their individual position with registrant.
5) Education & Background
The President of Jersey Shore Financial Advisors LLC is Thomas J Duffy, CFP®. Tom, born in 1965, is a lifelong New Jersey resident living in Eastern Monmouth County with his wife, Kristi and daughter Julia. Tom is active in the New Jersey Chapter of the Financial Planning Association, is a member of the New Jersey Gift Planning Council and the National Committee on Planned Giving, is a founding member of the Shore Regional Educational Foundation where he currently serves as President of the Foundation.
Tom’s educational background includes studying Business Administration at Monmouth University in West Long Branch, receiving a Bachelor of Science degree in Management Science from Kean University. Completing the Certified Financial Planner™ practitioner educational requirements through the College for Financial Planning and receiving a Master in Business Administration from Monmouth University.
Tom has extensive experience operating a client oriented financial services firm serving as financial planning manager and operations manager for Wealth Builders, Inc., a local financial planning & investment management firm where he was an employee and shareholder from 1997 through early 2007.
6) Other Business Activities
The principal business activity of the registrant is financial planning. investment advisory is a subset of the financial planning business as is any insurance or other product sales.
Registrant is actively engaged in the business of financial planning. Financial planning services is generally the precursor to investment advisory services, as the planning process is used to determine the goals and objectives of potential investment advisory clients, including their time horizon, knowledge of and experience with investments, risk tolerance and other suitability factors. Registrant spends the majority (90%) of his time in financial planning related activities such as new business development, financial plan preparation, delivering financial plan presentations to clients.
Where indicated by the financial planning process, insurance products may be recommended for purchase by the applicant although applicant does not receive compensation from any third party for such recommendations. Applicant is considered a fee-only advisor.
Registrant will act in the client’s best interest when making product recommendations.
There is no financial incentive to the advisor for said recommendation(s) therefore there is no material conflict requiring disclosure.
7) Other Financial Industry Activities or Affiliations
JSFA is not registered as a securities broker-dealer or a futures commission merchant, commodity pool operator or commodity trading advisor.
JSFA does however maintain affiliations with various insurance agencies and/or companies that provide informational access to various insurance products from various product sponsors in order to stay abreast of current trends and research in these types of products.
8) Participation or Interest in Client Transactions
Registrant has implemented policy prohibiting the use of insider information for securities trading by the client or employees of the registrant. This is commonly known as insider trading and is further prohibited by security industry regulations and punishable by law.
9) Conditions for Managing Accounts
Registrant does not impose a minimum amount of investment assets to become a client. Outside investment managers however will require a minimum account size to assume management. These minimums can range between $50,000 and $250,000 depending on the manager and/or the investment strategy.
Registrant reserves the right to decline to accept a client engagement if in the registrant’s opinion the costs to the client will outweigh any benefit to client or for any other reason. Registrant also reserves the right to keep reasons for declining an engagement private.
Registrant may offer to complete planning activities on reduced fee or pro bono basis depending on the facts and circumstances of the individual case.
10) Review of Accounts
Registrant will review and monitor client investment accounts on a periodic basis to measure continued suitability, manager proficiency, adherence to investment objective, etc.
Clients will receive account position and activity statements directly from broker-dealer custodian no less frequently than quarterly, and will receive from registrant a quarterly performance report that will indicate the account performance for previous quarter, year to date period and inception to date. This report may include information regarding a comparable index such as the S&P 500, Dow Jones Industrial Average etc solely for comparison purposes and fully disclosed that you cannot invest directly in an index.
Registrant may from time to time meet with client either in person or via teleconference to review investment account performance, continued suitability with objectives, time horizon and risk tolerance.
11) Investment or Brokerage Discretion
Registrant recommends the use of broker/dealer custodians for use with Third Party Investment Managers (TPAM) based on the custodians that have established working relationships with said TPAM.
Registrant can make no warranty as to the trade execution efficiency, cost, speed etc of the broker-dealer custodian and relies on the established reputation in the industry of said custodians.
12) Additional Compensation
Registrant does not receive additional compensation other than already disclosed in this brochure.
13) Balance Sheet
Balance Sheet is not required to be disclosed because JSFA does not assume custody of client funds or securities nor require prepayment of more than $500 in fees per client and 6 or more months in advance.
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