Printer Friendly

Form CRS

June 10th, 2020

Edge Wealth Management, LLC – Form CRS

Item 1 – Introduction

Edge Wealth Management, LLC (“we” or “us”) is registered with the Securities Exchange Commission (“SEC”) as an investment adviser. Our services and compensation structure differ from a registered broker-dealer, and it is important for you to understand the differences between those structures. Free and simple tools are available to research firms and financial professionals at www.investor.gov/CRS. The site also provides educational materials about broker-dealers, investment advisers and investing. The italicized sentences appearing in text boxes below are intended to be “conversation starters” for you to have with us, as required by the instructions to Form CRS.

 

Item 2 – Relationships and Services

What investment services and advice can you provide me?

As fiduciaries, we provide customized discretionary investment advisory and limited financial planning and consulting services to individuals and their trusts and estates (“you,” “clients” or our “retail investors”). We provide these services based on each client’s unique circumstances, including their investment objectives, risk tolerance, investment time horizon, withdrawal requirements, tax considerations, and other special circumstances, which we develop through discussions/meetings with our clients. We monitor portfolios periodically and make changes to them as we deem necessary. Because we manage portfolios on a discretionary basis, we have the authority to buy and sell investments in your accounts without speaking to you before doing so. However, you can place reasonable restrictions on the securities that we buy by notifying us, in writing. We do not have to limit the type of securities we trade for retail investors to proprietary products or a limited group or type of investment, but we generally construct and manage portfolios consisting of various individual equities and fixed income securities, mutual funds, exchange traded funds (“ETFs,”) exchange traded notes, publically-traded real estate investment trusts, and non-agency mortgage-backed securities, cash and cash equivalents. We may also agree to provide limited financial planning and consulting services that are ancillary to the investment management process. These limited financial planning and consulting services may include the preparation of: cash flow and net worth statements, risk tolerance analyses, retirement needs analyses, Monte Carlo analyses, 401(k) / retirement plan asset allocation analyses, and educational funding analyses. When we provide those services to a retail investor, we rely upon the information they provide and do not verify or monitor that information while or after providing these services. Our financial planning consulting services are completed upon the communication of our recommendations to the retail investor. We do not impose any requirements for retail investors to open or maintain an account or establish a relationship. For more detailed information about our Advisory Business and the Types of Clients we generally service, please see Items 4 and 7, respectively in our Form ADV Part 2A.

 

Conversation Starters:

Given my financial situation, should I choose an investment advisory service? Why or why not?

How will you choose investments to recommend to me?

What is your relevant experience, including your licenses, education and other qualifications?

What do these qualifications mean?

 

Item 3 – Fees, Costs, Conflicts, and Standard of Conduct

What fees will I pay?

For investment advisory services, our fee is based on a percentage of the market value of the assets placed under our management, between 0.25% and 1% in accordance with the fee schedule incorporated in your investment advisory agreement. Our fee is negotiable at our discretion, depending upon objective and subjective factors described in Item 5 of our Form ADV Part 2A.We either deduct our fees from one or more of your investment accounts or bill you for our services quarterly in arrears. Because our fee is based on the amount of your assets under our management, the more assets you designate to us for management, the more you will pay us for our services. Therefore, we have an incentive to encourage you to increase the amount of assets that you designate for our management. For more detailed information about our investment advisory and other fees and expenses, please see Item 5 in our Form ADV Part 2A.

 

Your account will be held with a qualified custodian. You will be responsible for the fees and expenses charged by qualified custodians and imposed by broker dealers according to their fee schedules. Those fees and expenses include but are not limited to, certain transaction charges, wire transfer and electronic fund fees, and other fees, taxes and costs related to maintaining an account. If your assets are invested in mutual funds, ETFs, or other registered and unregistered investment companies, you will bear your pro rata share of the investment management fees and other fees of the funds, which are in addition to the fees you pay us. These fees and expenses are described in each fund’s prospectus or other offering documents. You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying. For more detailed information about our fees and costs related to our management of your account, please see Item 5 in our Form ADV Part 2A.

 

Conversation Starters:

Help me understand how these fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?

 

What are your legal obligations to me when acting as my investment adviser? How else does your firm make money and what conflicts of interest do you have?

When we act as your investment adviser, we have to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the investment advice we provide you. Here are some examples to help you understand what this means:

* We may recommend that you engage a particular custodian from whom we receive support services. This presents a conflict of interest, because our receipt of their support make us more inclined to continue using and recommending them.

* We may recommend rollovers out of employer-sponsored retirement plans and into Individual Retirement Accounts that we manage for an asset-based fee. If we do not currently manage your account held with your employer’s plan, this will increase our compensation.

* One of our financial professionals may offer commission-based insurance products. This presents a conflict of interest, because he can recommend that you purchase insurance commission-based products based upon the compensation he will receive, rather than your individual need. You are not under any obligation to purchase those products.

 

Conversation Starters:

How might your conflicts of interest affect me, and how will you address them?

 

For more detailed information about our conflicts of interest, please review Item 4, 8, 10, 11, 12 and 14 of our Form ADV Part 2A.

 

How do your financial professionals make money?

Our financial professionals are generally compensated on a salary basis and are eligible to receive discretionary bonuses that can be but are not necessarily based on the acquisition of new clients and their growth of assets. In addition, some of our financial professionals are equity owners of the firm, who stand to receive a share of the firm’s profits. These payment structures present conflicts of interest, as they could incentivize our financial professionals to recommend that you place additional assets under our management. We mitigate that conflict by adhering to our fiduciary duty when making investment recommendations, so that we only make recommendations in conformity with each client’s investment objectives and savings strategy. You should discuss your financial professional’s compensation directly with your financial professional.

 

Item 4 – Disciplinary History

Do you or your financial professionals have legal or disciplinary history?

No. We encourage you to visit www.Investor.gov/CRS to research our firm and our financial professionals.

 

Conversation Starters:

As a financial professional, do you have any disciplinary history? If so, for what type of conduct?”

 

Item 5 – Additional Information

Additional information about our firm is available on the SEC’s website at www.adviserinfo.sec.gov. You may contact our Chief Compliance Officer at 212-682-0133 to request a current copy of our Form ADV Part 2A or our relationship summary.

 

Conversation Starters:

Who is my primary contact person? Is he or she a representative of an investment adviser or broker-dealer? Who can I talk to if I have concerns about how this person is treating me?