June 17, 2020
Reason Financial is registered with the Securities and Exchange Commission as an investment adviser and, as such, we provide advisory services rather than brokerage services. Brokerage and investment advisory services and fees differ and it is important for you, our client, to understand the differences. Additionally, free and simple tools are available to research firms and financial professionals at Investor.gov/CRS, which also provides educational materials about broker-dealers, investment advisers, and investing. This document is a summary of the services and fees we offer to “retail” investors, which are natural persons who seek or receive services primarily for personal, family, or household purposes.
What investment services and advice can you provide me?
We offer the following investment advisory services to retail investors: Investment Supervisory Services; Portfolio Manager to a Wrap Fee Program and Financial Planning Services. Detailed information regarding our services, fees and other disclosures can be found in our Form ADV Part 2A Brochure Items 4, 7, and 8 by clicking this link https://adviserinfo.sec.gov/firm/summary/133658.
Account Monitoring: If you open an investment account with our firm, as part of our standard service we will monitor your investments at least annually or more frequently based on a triggering event for your account.
Investment Authority:We manage investment accounts on a discretionary basis whereby we will decide which investments to buy or sell for your account. You may limit our discretionary authority (for example, limiting the types of securities that can be purchased or sold for your account) by providing our firm with your restrictions and guidelines in writing. We also offer non-discretionary investment management services whereby we will provide advice, but you will ultimately decide which investments to buy and sell for your account. You have an unrestricted right to decline to implement any advice provided by our firm on a non-discretionary basis.
Investment Offerings: We provide advice on various types of investments. However, we primarily recommend exchange-traded funds (ETFs) and mutual funds for client portfolios.
Account Minimums and Requirements:In general, we require a minimum account size of $30,000 to open and maintain an advisory account, which may be waived at our discretion.
|Key Questions to Ask Your Financial ProfessionalGiven 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?|
What fees will I pay?
The following summarizes the principal fees and costs associated with engaging our firm for investment advisory services. For detailed information, refer to our Form ADV Part 2A Brochure Items 5 and 6 by clicking this link https://adviserinfo.sec.gov/firm/summary/133658.
- Asset Based Fees – Payable quarterly in advance. Since the fees we receive are asset-based (i.e. based on the value of your account), we have an incentive to increase your account value which creates a conflict especially for those accounts holding illiquid or hard-to-value assets;
- Fixed Fees – Payable as invoiced;
- Wrap Program Fees – Payable quarterly in advance. Since the fees we receive are asset-based (i.e., based on the value of your account), we have an incentive to increase your account value which creates a connflict. Asset-based fees associated with a wrap fee program generally include most transaction costs and fees to a broker-dealer or bank that has custody of the assets; therefore, the asset-based fee is higher than a typical asset-based advisory fee. Since our firm pays the transaction costs associated with securities transactions in your account, we have an incentive to minimize the trading in your account;
- Program Fees – Payable quarterly in advance;
- Additional common fees and/or expenses such as: Custodian fees; account maintenance fees; fees related to mutual funds and exchange-traded funds; and transaction charges when purchasing or selling securities, not in a wrap account.
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.
|Key Questions to Ask Your Financial ProfessionalHelp 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.
- Third-Party Payments: Persons providing advice on behalf of our firm are registered representatives with a broker-dealer and/or are licensed as independent insurance agents. These persons will earn commission-based compensation in connection with the purchase and sale of securities or other investment products and insurance products. Commission-based compensation earned by these persons is separate and in addition to our advisory fees. This practice presents a conflict of interest because they have an incentive to recommend investment and insurance products based on the compensation received rather than solely based on your needs.
- Third-Party Payments: Persons providing investment advice on behalf of our firm are investment adviser representatives with another investment adviser These persons will earn fee-based compensation for advisory services. Outside advisory fees are separate and in addition to our advisory fees. This practice presents a conflict of interest because they have an incentive to recommend advisory services to you for the purpose of generating fees rather than solely based on your needs.
- Affiliated Entity: Reason Tax Group, LLC is affiliated through common control and ownership. When appropriate, we will recommend our tax group for tax planning and preparation services. Our advisory services are separate and distinct from the fees paid to our tax group for those services. Referral arrangements with an affiliated entity present a conflict of interest for us because we have a financial incentive to recommend an affiliated firm’s services.
Refer to our Form ADV Part 2A Brochure by clicking this link https://adviserinfo.sec.gov/firm/summary/133658 to help you understand what conflicts exist.
|Key Questions to Ask Your Financial ProfessionalHow might your conflicts of interest affect me, and how will you address them?|
How do your financial professionals make money?
The financial professionals servicing your account(s) are compensated by Salary; Product Sales Commissions; and Non-cash compensation. Financial professionals’ compensation is based on the amount of client assets they service and the time and complexity required to meet a client’s needs. They also receive non-cash compensation in the form of research, educational information and monetary support for due-diligence trips and client events.
Do you or your financial professionals have legal or disciplinary history?
No, our firm and our financial professionals currently do not have any legal or disciplinary history to disclose. Visit Investor.gov/CRS for a free and simple research tool.
|Key Questions to Ask Your Financial ProfessionalAs a financial professional, do you have any disciplinary history? For what type of conduct?|
You can find additional information about your investment advisory services and request a copy of the relationship summary at 858-483-7500 or click the link provided https://adviserinfo.sec.gov/firm/summary/133658.
|Key Questions to Ask Your Financial Professional|
Who is my primary contact person?Is he or she a representative of an investment adviser or a broker-dealer?Who can I talk to if I have concerns about how this person is treating me?