AWM ADV Part2A Firm Brochure
Accurate Wealth Management, LLC
FORM ADV PART 2A: FIRM BROCHURE
MARCH 29, 2024
This brochure provides information about the qualifications and business practices Accurate Wealth Management, LLC. If you have any questions about the contents of this brochure, please contact us at (813) 994‐0984. 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
Additional information about Accurate Wealth Management, LLC is available on the SEC’s website www.adviserinfo.sec.gov. You can search this site by a unique identifying number, known as a CRD number. Accurate Wealth Management, LLC’s CRD number is 298137.
Item 2: Material Changes
Since our last annual report on Form ADV, we have had no material changes to our business or operations.
Item 4: Advisory Business
Ownership/Advisory History
Accurate Wealth Management, LLC (“We” or “AWM”) was formed in July 2014. We are a Florida Limited Liability Company registered with the United States Securities and Exchange Commission. Our Owner is Accurate AdvisoryGroup, LLC, a Florida limited liability company owned by Konstantinos “Gus” Gotsis, Paul J. O’Grady and Robert Leone. Gregg Guinta is the firm’s Chief Operating Officer and Patrick Harris is the firm’s Chief Compliance Officer.
Advisory Services Offered
Before we enter into an Adviser‐Client relationship, we may offer a complimentary general consultation to discuss services available, give a prospective client time to review services desired and determine whether a relationship might benefit the client. Investment advisory services begin only after we and the client formalize the relationship with a properly executed agreement. We offer the following services to our clients:
Financial Planning
We create a written financial plan that typically focuses on one or more specific areas such as financial and cash management, risk management, financial issues relating to divorce or death of a family member, tax issues, retirement planning, educational funding, goal setting, or other needs identified by the client or by our review of the client’s financial circumstances. Through discussion with the client and/or questionnaires, we will collect pertinent data, identify goals, objectives, financial concerns, and potential solutions. We will present the client with a written analysis. Following the conclusion of the consulting services, we may make recommendations regarding implementation of the financial strategies discussed.
Portfolio Management Service
We manage individualized portfolios for our clients on a discretionary basis. We work with each client to formulate an individualized portfolio based upon his/her objectives, time frame, risk parameters and other investment considerations. We generally limit our investment advice to mutual funds, equities, bonds, fixed income, debt securities, ETFs real estate, hedge funds, REITs, insurance products including annuities, private placements (including, in appropriate circumstances, structured notes, private equity funds, hedge funds and privately placed life insurance contracts), and government securities. AWM may use other securities, as well to help diversify a portfolio when applicable. (Additional information about securities used and their risks can be found under Item 8.) Our investment philosophy is to use principles of value,safety, and quality to seek investment opportunities. We place heavy emphasis on risk control, believing that avoiding losses allows appreciation potential of investments to be realized.
Fees for portfolio management services will be based on a percentage of the assets under management. Our maximum annual management fee is 2.50%. The management fee is calculated, accrued and due quarterly in advance, except in the case where performance‐based fees are charged.
The annual fee is negotiable. A client may aggregate accounts to negotiate a lower fee. The pro-rated first quarter’s management fee will be calculated on the Account’s initial value as reported by its custodian. Thereafter, the periodic fee will be based upon the previous quarter-end Account value as reported by the client’s custodian.
Our fees are separate and distinct from any brokerage and custodian fees or expenses. These fees and expenses may include brokerage commissions, transaction fees, and other related costs and expenses. Additionally, clients may incur certain charges imposed by custodians, brokers, third party investment and other third parties such as fees charged by managers, custodial fees, deferred sales charges, odd‐lot differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions. Mutual funds and exchange traded funds also charge internal management fees, as disclosed in a fund’s prospectus, which are separate and distinct from the firm’s fee.
Selection of Third Party Advisors:
After an initial meeting with the client or when deemed appropriate, we may recommend the services of a third‐party investment adviser (“Third Party Adviser”) within or outside a wrap fee program. The recommendation will depend on the client’s circumstances, goals and objectives, strategy desired, account size, risk tolerance, or other factors. We work with each client to determine which Third Party Adviser may be appropriate. Clients are never obligated to use a recommended Third Party Adviser.
We will review Third Party Advisers prior to making a recommendation to the client. We consider the following factors during this review: fees, reputation, performance, financial strength, management, price, reporting capabilities, client’s financial situation, client’s goals, client’s needs, and client’s investment objectives. After our review we will present the client with one or more recommendations.
Under these arrangements, the Third‐Party Adviser is responsible for portfolio management, best execution, portfolio reporting, trading, trade error resolution, and custodian reconciliations. We maintain our relationship with the client by periodically reviewing the status of the client’s accounts with the Third‐ Party Adviser and making on‐going recommendations about the Third‐Party Adviser, usually meeting with the client either in person or by telephone on an annual basis. All questions regarding the Third‐Party Adviser’s services and performance will be directed to AWM.
Because the compensation required by the Third‐Party Adviser may differ depending on the agreement with each Third‐Party Adviser, we may have an incentive to recommend one Third Party Adviser over another if the compensation arrangements are more favorable to AWM. We address this conflict by insuring that client assets are invested in accordance with their investment objectives and risk tolerance.
Clients who are referred to Third Party Advisers will receive full disclosure, including services rendered and fee schedules, at the time of the referral, by delivery of a copy of the relevant Third‐Party Adviser’s Form ADV Part 2A or equivalent disclosure document before receiving investment advisory services from the Third‐Party Adviser.
In addition, if the investment program recommended to a client is a wrap fee program the client will receive Appendix 1 or equivalent wrap fee brochure provided by the sponsor of the program.
Tailored Service
We tailor all of our services to the client’s stated goals, needs and objectives. For our portfolio management service clients, we allow them to impose restrictions on investment in certain securities or types of securities. All restrictions must be presented to AWM in writing.
Wrap Program
We sponsor and act as portfolio manager for a wrap fee program for which we may use Third Party Advisers. We manage the wrap fee program in the same manner that we manage the non‐wrap accounts, and we receive a portion of the wrap fee for our services.
Client Assets Managed
Accurate Wealth Management, LLC has the following assets under management.
Discretionary Amounts:
$780,485,662
Non‐discretionary Amounts:
$0
Date Calculated:
February 29, 2024
Item 5: Fees and Compensation
Compensation for our Advisory Service
This section provides additional details regarding our Firm’s services along with descriptions of each service’s fees and compensation arrangements. It should be noted that lower fees for comparable service may be available from other sources. The exact fees and other terms will be described in the agreement between you and AWM.
The maximum annual fee charged for asset management will not exceed 2.50%. Fees to be assessed will be described in the advisory agreement to be signed by the client and our Firm. Fees of Third Party Advisers will be disclosed as explained below. Except in the case of accounts with performance based fees, annualized fees are billed quarterly in advance based on the value of the account(s) on the last day
of the previous quarter. Fees for the initial quarter of management shall be prorated. Fees are negotiable and will be deducted from client account(s).
For those clients whose fees are deducted by us:
a. Clients will provide authorization permitting our Firm to be directly paid;
b. Our Firm will send an invoice directly to the custodian; and
c. The client’s independent custodian sends statements at least quarterly showing the market values for each security included in the account and all account disbursements, including the amount of the advisory fees paid to our Firm
In the event that our Firm employs the services of Third‐Party Advisers in connection with our provision of asset management services, the total annual advisory fee due to our Firm for this service shall not exceed 2.50%. Fees due to Third Party Advisers will be paid by us. Our fees noted do not include certain other fees which may include a platform fee or trade costs.
AWM only uses or recommends Third Party Advisers that have a relationship with AWM and have met the conditions of our due diligence review. There may be other Third-Party Advisers that may be more or less costly.
No guarantees can be made that your financial goals or objectives will be achieved. Further, no guarantees of performance can be offered.
Performance-Based Portfolio Management Fees
The Adviser may receive performance‐based fees with respect to certain strategies. The Adviser manages both accounts that are charged a performance fee and accounts that are not charged a performance fee. The Adviser may have an incentive to favor accounts that are charged a performance fee; however, the Adviser believes this does not create a conflict of interest because accounts that are charged a performance fee are not using the same strategy as those that are not charged a performance fee. Charging a performance fee may create an incentive for the Adviser to make investments that are riskier or more speculative than would be the case in the absence of a fee based on the performance of the Account.
The following are the fees applicable where we charge a performance‐based fee: An annualized percentage of the net liquidation value of the portfolio is charged. A 20% performance fee is charged annually in arrears on a high‐ water mark basis. The term "high‐water mark" means the highest value that an account has achieved on previous performance fee calculation dates. Performance‐based fees are only payable if an accounts performance exceeds the high‐water mark. A high‐water mark ensures that if a manager loses money over a period, they must achieve investment returns above the high‐water mark before receiving a performance‐based fee. We share the performance‐based fee with the Third Party Adviser.
Financial Planning Services
Our financial planning services are provided on a fixed fee and/or hourly fee basis.
The fixed fees range between $1,000 and $100,000. The fixed fee range varies and depends upon the nature and complexity of each client’s individual circumstances. Each client’s Financial Planning Agreement shows what the client will be charged to complete the Scope of Services as defined in the Agreement. The fixed fee rate is negotiable. One half of the Financial Planning fee is due before any work on the plan begins, with the other half due upon presentation of the final plan.
The hourly fee for a financial plan is $200. Both the hourly rate and an estimate of the total project fee (estimated hours multiplied by the agreed to hourly rate) are shown in the executed Financial Planning Agreement. The hourly fee rate is non-negotiable. One half of the estimated Financial Planning fee is due before any work on the plan (or research project) begins, with the other half due upon presentation of both the final plan (or research project) and an invoice showing hours expended on the plan or project.
Co-Adviser Relationship
We may enter into a Co‐Adviser relationship with another registered investment adviser to manage your account. Where we are a co‐adviser we do not manage your portfolio but facilitate access to our platform by your adviser. We will charge your account on behalf of your adviser in accordance with your agreement with the adviser. We receive a platform fee not greater than .5% from your adviser for providing this service.
Termination of Services
A client may terminate their investment management agreement with us for any reason within the first five (5) business days after signing the agreement and receive a 100% refund of any prepaid fees without any cost or penalty. Thereafter, the contract may be terminated at any time by giving ten (10) days written notice to us at Accurate Wealth Management LLC, 2211 Ashley Oaks Circle, Wesley Chapel, FL 33544. Upon written notice of termination, the client will receive a prorated refund of any prepaid fees based upon a percentage of work completed and the client agrees to pay us for any expended time which exceeds the prepaid amount.
Other Securities Compensation
We do not receive any additional securities compensation.
Item 6: Performance-Based Fees and Side by Side Management
See discussion of Performance Based Portfolio Management Fees in Item 5 above.
We do not provide side-by-side management services.
Item 7: Types of Clients
We offer our services to individuals, high net worth individuals, high net worth individuals, pension and profit sharing plans, charities,corporations, and other business entities. We do not require a minimum account size or place any restrictions on opening an account.
Item 8: Methods of Analysis, Investment Strategies and Risk of Loss
Methods of Analysis and Investment Strategies
When we manage a client’s portfolio, we start with an individualized asset allocation method. When deciding on the asset allocation for a client, we take into account the client’s risk tolerance, goals, investment objectives and other data gathered during the client meetings. Asset Allocation is an investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance and investment horizon among various asset classes. The asset classes typically include equities, fixed Income, and cash and equivalents. Each class has different levels of risk and return, so each will behave differently over time.
Recommended Securities and Investment Risks
We may use several types of securities in our clients’ accounts. These securities may include, but are not limited to, the following: Stocks; Bonds; Exchange Traded Funds; Mutual Funds; Government Debt instruments Including Treasury Bills and Municipal securities; Traded Real Estate Investment Trusts; Structured Notes; Money Market Funds and Cash. All investments bear different types and degrees of risk and investing in securities involves risk of loss that clients should be prepared to bear
While we use investment strategies that are designed to provide appropriate investment diversification, some investments have significantly greater risks than others. Obtaining higher rates of return on investments entails accepting higher levels of risk. Recommended investment strategies seek to balance risks and rewards to achieve investment objectives. Clients should feel free to ask questions about
risks they do not understand. We would be pleased to answer all questions.
An investment could lose money over short or even long periods. A client should expect his/her account value and returns to fluctuate within a wide range, like the fluctuations of the overall stock and bond markets. A client’s account performance could be hurt by:
Options Risk:Like other securities ‐ including stocks, bonds, and mutual funds ‐ options carry no guarantees, and a person must be aware that it is possible to lose all of the principal he/she invests, and sometimes more. As an option holder, a person risks the entire amount of the premium he/she paid. But as an options writer, a person takes on a much higher level of risk. For example, if a person writes an uncovered call, he/she faces unlimited potential loss, since there is no cap on how high a stock price can rise. Since initial options investments usually requires less capital than equivalent stock positions, potential cash losses as an options investor are usually smaller than if someone bought the underlying stock or sold the stock short. The exception to this general rule occurs when an option is used to provide leverage: Percentage returns are often high, but it is important to remember that percentage losses can be high as well.
Covered Call Risk: A covered call involves selling call options against stock owned in a portfolio. Covered call sellers have to hold onto underlying shares or contracts or they’ll be holding naked calls, which have theoretically unlimited loss potential if the underlying security rises. Therefore, sellers need to buy back options positions before expiration if they want to sell shares or contracts, increasing transaction costs while lowering net gains or increasing net losses. We do not permit naked options in our advised accounts.
Stock Market Risk: The chance that stock prices overall will decline. Stock markets tend to move in cycles, with periods of rising stock prices and periods of falling stock prices.
Interest Rate Risk: The chance that bond prices overall will decline because of rising interest rates.
Manager Risk: The chance that the proportions allocated to the various securities will cause the client’s account to underperform relevant to benchmarks or other accounts with a similar investment objective.
International Investing Risk: Investing in the securities of non‐U.S. companies involves special risks not typically associated with investing in U.S. companies. Foreign securities tend to be more volatile and less liquid than investments in U.S. securities, and may lose value because of adverse political, social or economic developments overseas or due to changes in the exchange rates between foreign currencies and the U.S. dollar. In addition, foreign investments are subject to settlement practices, as well as regulatory and financial reporting standards, that differ from those of the U.S.
Liquidity Risk: One common risk associated with private placements, structured notes and REITs is a relative lack of liquidity due to the highly customized nature of the investment. Moreover, the full extent of returns is often not realized until maturity. Because of this, these productstend to be more of a buy‐and‐hold investment decision rather than a means of getting in and out of the position with speed and efficiency.
Credit Risk: This is the risk that the issuer of a bond could suffer an adverse change in financial condition that results in a payment default, security downgrade or inability to meet a financial obligation.
Inflation Risk: This is the risk that inflation will undermine the performance of your investment and/or the future purchasing power of your assets.
Item 9: Disciplinary Information
Registered investment advisers are required to disclose all material facts regarding any legal or disciplinary events that would be material to your evaluation of each supervised person providing investment advice. Certain of our registered investment adviser representatives have information applicable to this item. The information on each of our investment adviser representatives can be found at www.BrokerCheck.com.
Item 10: Other Financial Industry Activities And Affiliations
A number of our investment adviser representatives are also registered representatives of AAG Capital, Inc., an affiliated broker‐dealer.
FUTURES/COMMODITIES FIRM AFFILIATION:
We are not affiliated with a futures or commodities broker.
OTHER AFFILIATIONS:
Our owners or associates may be independent insurance agents or agents of our affiliate, Accurate Advisory Group, a Florida insurance agency, and may offer life, annuity, and health insurance to the firm’s clients. This other business activity pays them commissions that are separate from the fees described in Item 5 above. This is a conflict of interest because the commissions give our associates a financial incentive to recommend and sell clients the insurance products. However, we attempt to mitigate any conflicts of interest through the exercise of care in performing our fiduciary duty and by informing clients that they are never obligated to purchase any recommended insurance products through them.
Item 11: Code of Ethics, Participation Or Interest In Client Transactions And Personal Trading
DESCRIPTION
Our Code of Ethics establishes rules for ethical conduct based upon fundamental principles of openness, integrity, honesty and trust. We will provide a copy of our Code of Ethics to any client or prospective client upon request.
Our Code of Ethics covers all supervised persons and it describes our high standard of business conduct, and our fiduciary duty to our clients. The Code of Ethics includes our provisions relating to the confidentiality of client information, a prohibition on insider trading, restrictions on the acceptance of significant gifts and the reporting of certain gifts and business entertainment items, and personal securities trading procedures, among other things. All of our supervised persons must acknowledge the terms of the Code of Ethics annually.
MATERIAL INTEREST IN SECURITIES
We do not have a material interest in any securities.
INVESTING IN OR RECOMMENDING THE SAME SECURITIES
On occasion, our owners and investment adviser representatives may buy or sell for their own accounts securities that are the same as, similar to, or different from, those that they recommend to their clients for purchase or sale. Differences can arise due to variations in personal goals, investment horizons, risk tolerance, and the timing of purchases and sales. We attempt to mitigate the conflict of interest to the best of our ability through the enactment of our code of ethics and our review of the personal trading of our personnel. Our associates are aware of their fiduciary duty to our clients and the prohibitions against the use of any insider information, including information about client positions or activity. Records of all associates' personal trading activities are monitored and retained.
Item 12: BROKERAGE PRACTICES
RECOMMENDATION CRITERIA
For client accounts that we manage, we will seek broker‐dealers and custodians who offer competitive commission costs together with reliable services. A client’s choice of another broker‐ dealer is acceptable if proven feasible. We recognize our fiduciary responsibility in negotiating brokerage commissions, assuring best execution practices and assuring adequate investment availability/inventory on behalf of our clientele. We do not receive compensation with respect to execution of these trades. In some instances, a client may incur a ticket charge for the sale or purchase of securities. We will ensure all broker‐dealers and custodians are properly registered in the state of where the client resides prior to making a recommendation.
RESEARCH AND SOFT DOLLARS
“Soft dollars” are defined as a form of payment investment firms can use to pay for goods and services such as newssubscriptions or research. When an investment firm givesits business to a particular brokerage firm, the brokerage firm in return can agree to use some of its revenue to pay for these types of services. In order to stem the potential conflicts of interest that may arise from “soft dollar” arrangements, we pursue a policy of not entering into any such arrangements, either orally or in writing.
BROKERAGE FOR CLIENT REFERRALS
We do not receive client referrals from any broker‐dealer or custodian.
DIRECTED BROKERAGE
Some clients may direct us to a specific broker‐dealer to execute securities transactions for their accounts. When so directed, we may not be able to effectively negotiate lower brokerage commissions or achieve best execution on clients’ transactions. This can result in substantially higher fees, charges or dealer concessions in one or more transactions for the clients’ account because the Adviser cannot negotiate favorable prices.
TRADE AGGREGATION
We may aggregate orders with respect to the same security purchased for different clients. When orders are aggregated, each participating account receives the average share price for the transaction and bears a proportionate share of all transaction costs, based upon each account’s participation in the transaction, subject to our discretion depending on factual or market conditions. Clients participating in block trading may include accounts of persons related to us. Such accounts are treated as client accounts and are neither given preferential nor inferior treatment versus other client accounts. Allocations of orders among client accounts are made in a fair and equitable manner.
Item 13: Review of Accounts
PERIODIC REVIEWS
Each investment adviser representative periodically reviews the general holdings of his/her client accounts. Each investment adviser representative also meets with clients on an annual basis to review their financial situations.
OTHER REVIEWS
Additional reviews are conducted periodically depending on market conditions, economic or political events, or changes in a client’s financial situation (such as retirement, termination of employment, physical move, or inheritance).
REPORTS
The client will receive a quarterly statement from their custodian. We urge you to carefully review such statements.
Item 14: Client Referrals And Other Compensation
OTHER COMPENSATION
Except as described below, we do not receive extra compensation or any other economic benefit for providing investment advice or other advisory services to clients.
Schwab Advisor Services
Products & Services Available to AWM From Schwab
Schwab Advisor Services (formerly called Schwab Institutional) is Schwab’s business serving independent investment advisory firms like ours. They provide us and our clients with access to its institutional brokerage – trading, custody, reporting and related services – many of which are not typically available to Schwab retail customers. Schwab also makes available various support services. Some of those services help us manage or administer our clients’ accounts while others help us manage and grow our business. Schwab’s support services are generally available on an unsolicited basis and at no charge to AWM as long as we maintain a total of at least $10 million of our clients’ assets in accounts at Schwab.
Services that Benefit Client
Schwab’s institutional brokerage services include access to a broad range of investment products, execution of securities transactions, and custody of client assets. The investment products available through Schwab include some to which we might not otherwise have access or that would require a significantly higher minimum initial investment by our clients. Schwab’s services described in this paragraph generally benefit clients or their account(s).
Services that May Not Directly Benefit Clients
Schwab also makes available to AWM other products and servicesthat benefit us but may not directly benefit the client ortheir account(s). These products and services assist usin managing and administering our clients’ accounts. They include investment research, both Schwab’s own and that of third parties. We may use this research to service all or some substantial number of our clients’ accounts, including accounts not maintained at Schwab. In addition to investment research, Schwab also makes available software and other technology that:
provides access to client account data (such as duplicate trade confirmations and account statements); facilitates trade execution and allocate aggregated trade orders for multiple client accounts;
provides pricing and other market data
facilitates payment of our fees from our clients’ accounts; and
assists with back‐office functions, recordkeeping, and client reporting.
Schwab also offers other services intended to help us manage and further develop our business enterprise. These services include:
educational conferences and events
technology, compliance, legal, and business consulting;
publications and conferences on practice management and business succession; and
access to employee benefits providers, human capital consultants and insurance providers.
Schwab may provide some of these services itself. In other cases, it will arrange for third‐party vendors to provide the services AWM. Schwab may also discount or waive its fees for some of these services or pay all or a part of a third party’s fees.
Irrespective of direct or indirect benefits to our client through Schwab, we strive to enhance the client’s experience, help reach their goals and put their interests before that of our firm or its associated persons.
CLIENT REFERRALS
AWM engages and compensates a third‐party referral source (a “Solicitor”) for Client referrals. Clients will not pay a higher fee to AWM as a result of such payments to a Solicitor. We have entered into an agreement with the Solicitor which requires that full disclosure of the compensation and other conflicts is provided to the prospective client prior to or at the time of entering into the advisory agreement.
Item 15: Custody
All client funds, securities and accounts are held at third‐party custodians. We do not take possession of a client’s securities. However, with respect to the accounts we manage, the client will authorize us to deduct fees directly from the client’s account. This authorization will be to deduct our management fee (including the management fee of any Third‐Party Adviser). When deducting the fee, we will send a billing statement to the client’s custodian that indicates the fee to be withdrawn and how it was calculated from the account. A client may object to the deduction of our fees from the Account by notifying us at the address or telephone number shown on each billing invoice or by notifying the client’s custodian. The client’s custodian shall also send a quarterly statement indicating the amount of fees withdrawn from the client’s Account. We urge clients to carefully review such statements.
Item 16: Investment Discretion
We offer discretionary portfolio management services. Clients sign an investment management agreement that contains a limited power of attorney granting us discretionary power over the account. In discretionary accounts, we will be allowed to place trades, buy orsellsecurities of any type and in amounts it deems to be appropriate for the account, without first obtaining the client’s consent to each trade. Directions will be given to the account custodian to complete the transaction.
Item 17: Voting Client Securities
Except as noted below, we will not be responsible for responding to proxies that are solicited with respect to securities held in clients' accounts under our Portfolio Management Services. Proxy solicitation materials will be sent to the client directly from the account’s custodian. In the event that a proxy solicitation is received, it will be forwarded to clients directly from the custodian for response and voting. Clients with questions about a proxy solicitation, the client should contact his/her investment adviser representative. In the case of investments in certain Goldman Sachs (“GS”) separately managed accounts available from Fidelity and Schwab, we are required to permit GS to vote proxies on behalf of holders.
Item 18: Financial Information
Balance sheet
We do not require or solicit prepayment of more than $1,200 in fees per client, six months or more in advance. Therefore, we are not required to provide a balance sheet.
Financial Condition
We are required in this Item to provide you with certain financial information or disclosures about our financial condition if we have a financial commitment that impairs our ability to service you. We do not have a financial commitment that impairs our ability to service our clients.
Bankruptcy
We have not been the subject of a bankruptcy proceeding.