RIA ADV Part 2A

Valley Wealth Management LLC

Firm Brochure - Form ADV Part 2A

 

This brochure provides information about the qualifications and business practices of Valley Wealth Management LLC. If you have any questions about the contents of this brochure, please contact us at (920) 966-9520 or by email at: info@valleywealth.net. 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 Valley Wealth Management LLC is also available on the SEC’s website at www.adviserinfo.sec.govValley Wealth Management LLC’s CRD number is: 327845.

509 S Washburn St.
Oshkosh, WI 54904
(920) 966-9520
info@valleywealth.net

https://www.valleywealth.net

 Registration as an investment adviser does not imply a certain level of skill or training.

Version Date: 01/10/2024


Item 2: Material Changes

 

Valley Wealth Management LLC has not yet filed an annual updating amendment using the Form ADV Part 2A. Therefore, there are no material changes to report.


Item 3: Table of Contents

 

Item 1: Cover Page

Item 2: Material Changes. ii

Item 3: Table of Contents. iii

Item 4: Advisory Business. 2

Item 5: Fees and Compensation. 4

Item 6: Performance-Based Fees and Side-By-Side Management 6

Item 7: Types of Clients. 7

Item 8: Methods of Analysis, Investment Strategies, & Risk of Loss. 7

Item 9: Disciplinary Information. 10

Item 10: Other Financial Industry Activities and Affiliations. 11

Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading. 12

Item 12: Brokerage Practices. 13

Item 13: Review of Accounts. 15

Item 14: Client Referrals and Other Compensation. 16

Item 15: Custody. 16

Item 16: Investment Discretion. 16

Item 17: Voting Client Securities (Proxy Voting) 17

Item 18: Financial Information. 17

Item 19: Requirements For State Registered Advisers. 17


Item 4: Advisory Business

 

A. Description of the Advisory Firm

 

Valley Wealth Management LLC (hereinafter “VWM”) is a Limited Liability Company organized in the State of Wisconsin. The firm was formed in October 2021, and the principal owner is Lawrence Mroczkowski.

 

B. Types of Advisory Services

 

Portfolio Management Services

 

VWM offers ongoing portfolio management services based on the individual goals, objectives, time horizon, and risk tolerance of each client. VWM creates an Investment Policy Statement for each client, which outlines the client’s current situation (income, tax levels, and risk tolerance levels). Portfolio management services include, but are not limited to, the following:

 

  • Investment strategy   •          Personal investment policy
  • Asset allocation          •          Asset selection
  • Risk tolerance             •          Regular portfolio monitoring

 

VWM evaluates the current investments of each client with respect to their risk tolerance levels and time horizon. VWM will require discretionary authority from clients in order to select securities and execute transactions without permission from the client prior to each transaction. Risk tolerance levels are documented in the Investment Policy Statement, which is given to each client.

 

VWM seeks to provide that investment decisions are made in accordance with the fiduciary duties owed to its accounts and without consideration of VWM’s economic, investment or other financial interests. To meet its fiduciary obligations, VWM attempts to avoid, among other things, investment or trading practices that systematically advantage or disadvantage certain client portfolios, and accordingly, VWM’s policy is to seek fair and equitable allocation of investment opportunities/transactions among its clients to avoid favoring one client over another over time. It is VWM’s policy to allocate investment opportunities and transactions it identifies as being appropriate and prudent among its clients on a fair and equitable basis over time.

 

LPL Financial Sponsored Advisory Programs

 

VWM may provide advisory services through certain programs sponsored by LPL Financial LLC, a registered broker-dealer, member FINRA/SIPC, and SEC-registered investment adviser (“LPL”). Below is a brief description of the LPL advisory program available to VWM. For more information regarding the LPL programs, including more information on the advisory services and fees that apply, the types of investments available in the programs and the potential conflicts of interest presented by the programs please see the LPL Financial Form ADV Part 2A or the applicable program’s Part 2A Appendix and the applicable client agreement.

 

The services below depend upon LPL to administer the program and, depending upon the program, to actually manage client assets. Fees are collected by LPL, then VWM’s portion is sent to it.

 

Optimum Market Portfolios Program (OMP) - OMP offers clients the ability to participate in a professionally managed asset allocation program using Optimum Funds Class I shares. Under OMP, client will authorize LPL on a discretionary basis to purchase and sell Optimum Funds pursuant to investment objectives chosen by the client. VWM will assist the client in determining the suitability of OMP for the client and assist the client in setting an appropriate investment objective. VWM will have discretion to select a mutual fund asset allocation portfolio designed by LPL consistent with the client’s investment objective. LPL will have discretion to purchase and sell Optimum Funds pursuant to the portfolio selected for the client. LPL will also have authority to rebalance the account. A minimum account value of $10,000 is required for OMP. In certain circumstances, LPL will permit a lower minimum account size.

 

Services Limited to Specific Types of Investments

 

VWM generally limits its investment advice to mutual funds, fixed income securities, real estate funds (including REITs), insurance products including annuities, equities, ETFs (including ETFs in the gold and precious metal sectors), treasury inflation protected/inflation linked bonds and commodities, although VWM primarily recommends ETFs and mutual funds.. VWM may use other securities as well to help diversify a portfolio when applicable.

 

Written Acknowledgement of Fiduciary Status


When we provide investment advice to you regarding your retirement plan account or individual retirement account, we are fiduciaries within the meaning of Title I of the Employee Retirement Income Security Act and/or the Internal Revenue Code, as applicable, which are laws governing retirement accounts. The way we make money creates some conflicts with your interests, so we operate under a special rule that requires us to act in your best interest and not put our interest ahead of yours. Under this special rule’s provisions, we must:

  • Meet a professional standard of care when making investment recommendations (give prudent advice);
  • Never put our financial interests ahead of yours when making recommendations (give loyal advice);
  • Avoid misleading statements about conflicts of interest, fees, and investments;
  • Follow policies and procedures designed to ensure that we give advice that is in your best interest;
  • Charge no more than is reasonable for our services; and
  • Give you basic information about conflicts of interest.

C. Client Tailored Services and Client Imposed Restrictions

 

VWM offers the same suite of services to all of its clients. However, specific client investment strategies and their implementation are dependent upon the client Investment Policy Statement which outlines each client’s current situation (income, tax levels, and risk tolerance levels). Clients may not impose restrictions in investing in certain securities or types of securities in accordance with their values or beliefs.

 

D. Wrap Fee Programs

 

A wrap fee program is an investment program where the investor pays one stated fee that includes management fees and transaction costs. VWM does not participate in wrap fee programs.

 

E. Assets Under Management

 

VWM has the following assets under management:

Discretionary Amounts:

Non-discretionary Amounts:

Date Calculated:

$ 80,776,736.00

$ 0.00

December 2023

 

Item 5: Fees and Compensation

 

A. Fee Schedule

 

Portfolio Management Fees

 

Total Assets Under Management

Annual Fees

$0 - $250,000

1.50%

$250,001 - $1,000,000

1.25%

$1,000,001 - $5,000,000

1.15%

$5,000,001 - AND UP

1.00%

 

The advisory fee is calculated using the value of the assets in the Account on the last business day of the prior billing period.

These fees are generally negotiable and the final fee schedule will be memorialized in the client’s advisory agreement. Clients may terminate the agreement without penalty for a full refund of VWM's fees within five business days of signing the Investment Advisory Contract. Thereafter, clients may terminate the Investment Advisory Contract immediately upon written notice.

 

LPL Financial Sponsored Advisory Program Fees

 

The account fee charged to the client for the LPL advisory program is negotiable. The maximum advisory account fees is 2.00% for OMP. However, VWM in its sole discretion may charge a lesser investment management fee based upon certain criteria (e.g., anticipated future earning capacity, anticipated future additional assets, dollar amount of assets to be managed, related accounts, account composition, negotiations with client, strategies to be applied, etc.) which will be set forth in the Agreement. LPL serves as program sponsor, investment advisor and broker-dealer for the LPL advisory program. VWM and LPL share in the account fee. All services provided through LPL rely upon LPL to administer the program and, depending upon the program, to actually manage client assets.

 

B. Payment of Fees

 

Payment of Portfolio Management Fees

 

Asset-based portfolio management fees are withdrawn directly from the client's accounts with client's written authorization on a quarterly basis.  Fees are paid in advance.

 

Payment of LPL Financial Sponsored Advisory Program Fees

 

Account fees are payable quarterly in advance. Fees are collected by LPL, then VWM’s portion is sent to VWM.

 

C. Client Responsibility For Third Party Fees

 

Clients are responsible for the payment of all third party fees (i.e. custodian fees, brokerage fees, mutual fund fees, transaction fees, etc.). Those fees are separate and distinct from the fees and expenses charged by VWM. Please see Item 12 of this brochure regarding broker-dealer/custodian.

 

D. Prepayment of Fees

 

VWM collects fees in advance. Refunds for fees paid in advance but not yet earned will be refunded on a prorated basis and returned within fourteen days to the client via check, or return deposit back into the client’s account.

 

For all asset-based fees paid in advance, the fee refunded will be equal to the balance of the fees collected in advance minus the daily rate* times the number of days elapsed in the billing period up to and including the day of termination. (*The daily rate is calculated by dividing the annual asset-based fee rate by 365.)

 

E. Outside Compensation For the Sale of Securities to Clients

 

Lawrence Michael Mroczkowski is a registered representative of a broker-dealer and an insurance agent and in these roles, accepts compensation for the sale of investment products to VWM clients.

 

  1. This is a Conflict of Interest


Supervised persons may accept compensation for the sale of investment products, including asset based sales charges or service fees from the sale of mutual funds to VWM's clients. This presents a conflict of interest and gives the supervised person an incentive to recommend products based on the compensation received rather than on the client’s needs. When recommending the sale of investment products for which the supervised persons receives compensation, VWM will document the conflict of interest in the client file and inform the client of the conflict of interest.


  1. Clients Have the Option to Purchase Recommended Products From Other Brokers


Clients always have the option to purchase VWM recommended products through other brokers or agents that are not affiliated with VWM.


  1. Commissions are not VWM's primary source of compensation for advisory services


Commissions are not VWM’s primary source of compensation for advisory services.


  1. Advisory Fees in Addition to Commissions or Markups


Advisory fees that are charged to clients are not reduced to offset the commissions or markups on investment products recommended to clients.

 

Item 6: Performance-Based Fees and Side-By-Side Management

 

VWM does not accept performance-based fees or other fees based on a share of capital gains on or capital appreciation of the assets of a client.

 

Item 7: Types of Clients

 

VWM generally provides advisory services to the following types of clients:

 

      ❖         Individuals

      ❖         High-Net-Worth Individuals

      ❖         Corporations or Business Entities

 

There is no account minimum for any of VWM’s services.

 

A minimum account value of $10,000 is required for OMP. In certain circumstances, LPL will permit a lower minimum account size.

 

Item 8: Methods of Analysis, Investment Strategies, & Risk of Loss

 

A.   Methods of Analysis and Investment Strategies

 

Methods of Analysis

 

VWM’s methods of analysis include Modern portfolio theory.

 

Modern portfolio theory is a theory of investment that attempts to maximize portfolio expected return for a given amount of portfolio risk, or equivalently minimize risk for a given level of expected return, each by carefully choosing the proportions of various asset.

 

Investment Strategies

 

VWM uses long term trading and margin transactions.

 

Investing in securities involves a risk of loss that you, as a client, should be prepared to bear.

 

B.    Material Risks Involved

 

Methods of Analysis

 

Modern portfolio theory assumes that investors are risk averse, meaning that given two portfolios that offer the same expected return, investors will prefer the less risky one. Thus, an investor will take on increased risk only if compensated by higher expected returns. Conversely, an investor who wants higher expected returns must accept more risk. The exact trade-off will be the same for all investors, but different investors will evaluate the trade-off differently based on individual risk aversion characteristics. The implication is that a rational investor will not invest in a portfolio if a second portfolio exists with a more favorable risk-expected return profile – i.e., if for that level of risk an alternative portfolio exists which has better expected returns.

 

Investment Strategies

 

VWM's use of margin transactions generally holds greater risk, and clients should be aware that there is a material risk of loss using any of those strategies.

 

Long term trading is designed to capture market rates of both return and risk. Due to its nature, the long-term investment strategy can expose clients to various types of risk that will typically surface at various intervals during the time the client owns the investments. These risks include but are not limited to inflation (purchasing power) risk, interest rate risk, economic risk, market risk, and political/regulatory risk.

 

Margin transactions use leverage that is borrowed from a brokerage firm as collateral. When losses occur, the value of the margin account may fall below the brokerage firm’s threshold thereby triggering a margin call. This may force the account holder to either allocate more funds to the account or sell assets on a shorter time frame than desired.

 

Selection of Other Advisers: Although VWM will seek to select only money managers who will invest clients' assets with the highest level of integrity, VWM's selection process cannot ensure that money managers will perform as desired and VWM will have no control over the day-to-day operations of any of its selected money managers. VWM would not necessarily be aware of certain activities at the underlying money manager level, including without limitation a money manager's engaging in unreported risks, investment “style drift” or even regulatory breaches or fraud.

 

Investing in securities involves a risk of loss that you, as a client, should be prepared to bear.

 

C.    Risks of Specific Securities Utilized

 

VWM's use of margin transactions generally holds greater risk of capital loss. Clients should be aware that there is a material risk of loss using any investment strategy. The investment types listed below (leaving aside Treasury Inflation Protected/Inflation Linked Bonds) are not guaranteed or insured by the FDIC or any other government agency.

 

Mutual Funds: Investing in mutual funds carries the risk of capital loss and thus you may lose money investing in mutual funds. All mutual funds have costs that lower investment returns. The funds can be of bond “fixed income” nature (lower risk) or stock “equity” nature.

 

Equity investment generally refers to buying shares of stocks in return for receiving a future payment of dividends and/or capital gains if the value of the stock increases. The value of equity securities may fluctuate in response to specific situations for each company, industry conditions and the general economic environments.

 

Fixed income investments generally pay a return on a fixed schedule, though the amount of the payments can vary. This type of investment can include corporate and government debt securities, leveraged loans, high yield, and investment grade debt and structured products, such as mortgage and other asset-backed securities, although individual bonds may be the best known type of fixed income security. In general, the fixed income market is volatile and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.)  Fixed income securities also carry inflation risk, liquidity risk, call risk, and credit and default risks for both issuers and counterparties.  The risk of default on treasury inflation protected/inflation linked bonds is dependent upon the U.S. Treasury defaulting (extremely unlikely); however, they carry a potential risk of losing share price value, albeit rather minimal.

 

Exchange Traded Funds (ETFs): An ETF is an investment fund traded on stock exchanges, similar to stocks. Investing in ETFs carries the risk of capital loss (sometimes up to a 100% loss in the case of a stock holding bankruptcy). Areas of concern include the lack of transparency in products and increasing complexity, conflicts of interest and the possibility of inadequate regulatory compliance. Risks in investing in ETFs include trading risks, liquidity and shutdown risks, risks associated with a change in authorized participants and non-participation of authorized participants, risks that trading price differs from indicative net asset value (iNAV), or price fluctuation and disassociation from the index being tracked. With regard to trading risks, regular trading adds cost to your portfolio thus counteracting the low fees that one of the typical benefits of ETFs. Additionally, regular trading to beneficially “time the market” is difficult to achieve. Even paid fund managers struggle to do this every year, with the majority failing to beat the relevant indexes. With regard to liquidity and shutdown risks, not all ETFs have the same level of liquidity.  Since ETFs are at least as liquid as their underlying assets, trading conditions are more accurately reflected in implied liquidity rather than the average daily volume of the ETF itself. Implied liquidity is a measure of what can potentially be traded in ETFs based on its underlying assets. ETFs are subject to market volatility and the risks of their underlying securities, which may include the risks associated with investing in smaller companies, foreign securities, commodities, and fixed income investments (as applicable). Foreign securities in particular are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets. ETFs that target a small universe of securities, such as a specific region or market sector, are generally subject to greater market volatility, as well as to the specific risks associated with that sector, region, or other focus. ETFs that use derivatives, leverage, or complex investment strategies are subject to additional risks. Precious Metal ETFs (e.g., Gold, Silver, or Palladium Bullion backed “electronic shares” not physical metal) specifically may be negatively impacted by several unique factors, among them (1) large sales by the official sector which own a significant portion of aggregate world holdings in gold and other precious metals, (2) a significant increase in hedging activities by producers of gold or other precious metals, (3) a significant change in the attitude of speculators and investors. The return of an index ETF is usually different from that of the index it tracks because of fees, expenses, and tracking error. An ETF may trade at a premium or discount to its net asset value (NAV) (or indicative value in the case of exchange-traded notes). The degree of liquidity can vary significantly from one ETF to another and losses may be magnified if no liquid market exists for the ETF’s shares when attempting to sell them. Each ETF has a unique risk profile, detailed in its prospectus, offering circular, or similar material, which should be considered carefully when making investment decisions.

 

Real estate funds (including REITs) face several kinds of risk that are inherent in the real estate sector, which historically has experienced significant fluctuations and cycles in performance. Revenues and cash flows may be adversely affected by: changes in local real estate market conditions due to changes in national or local economic conditions or changes in local property market characteristics; competition from other properties offering the same or similar services; changes in interest rates and in the state of the debt and equity credit markets; the ongoing need for capital improvements; changes in real estate tax rates and other operating expenses; adverse changes in governmental rules and fiscal policies; adverse changes in zoning laws; the impact of present or future environmental legislation and compliance with environmental laws.

 

Annuities are a retirement product for those who may have the ability to pay a premium now and want to guarantee they receive certain monthly payments or a return on investment later in the future. Annuities are contracts issued by a life insurance company designed to meet requirement or other long-term goals. An annuity is not a life insurance policy. Variable annuities are designed to be long-term investments, to meet retirement and other long-range goals. Variable annuities are not suitable for meeting short-term goals because substantial taxes and insurance company charges may apply if you withdraw your money early. Variable annuities also involve investment risks, just as mutual funds do.

 

Commodities are tangible assets used to manufacture and produce goods or services. Commodity prices are affected by different risk factors, such as disease, storage capacity, supply, demand, delivery constraints and weather. Because of those risk factors, even a well-diversified investment in commodities can be uncertain.

 

Past performance is not indicative of future results. Investing in securities involves a risk of loss that you, as a client, should be prepared to bear.

 

Item 9: Disciplinary Information

 

A.   Criminal or Civil Actions

 

There are no criminal or civil actions to report.

 

B.    Administrative Proceedings

 

There are no administrative proceedings to report.

 

C.    Self-regulatory Organization (SRO) Proceedings

 

There are no self-regulatory organization proceedings to report.

 

Item 10: Other Financial Industry Activities and Affiliations

 

A.   Registration as a Broker/Dealer or Broker/Dealer Representative

 

As a registered representative of LPL Financial, Lawrence Michael Mroczkowski accepts compensation for the sale of securities.

 

B.    Registration as a Futures Commission Merchant, Commodity Pool Operator, or a Commodity Trading Advisor

 

Neither VWM nor its representatives are registered as or have pending applications to become either a Futures Commission Merchant, Commodity Pool Operator, or Commodity Trading Advisor or an associated person of the foregoing entities.

 

C.    Registration Relationships Material to this Advisory Business and Possible Conflicts of Interests

 

Lawrence Michael Mroczkowski is a registered representative of LPL Financial and from time to time, will offer clients advice or products from those activities. Clients should be aware that these services pay a commission or other compensation and involve a conflict of interest, as commissionable products conflict with the fiduciary duties of a registered investment adviser. VWM always acts in the best interest of the client, including with respect to the sale of commissionable products to advisory clients. Clients are in no way required to implement the plan through any representative of VWM in such individual’s capacity as a registered representative.

 

Lawrence Michael Mroczkowski is an independent licensed insurance agent. This activity creates a conflict of interest since there is an incentive to recommend insurance products based on commissions or other benefits received from the insurance company, rather than on the client’s needs.  Additionally, the offer and sale of insurance products by supervised persons of VWM are not made in their capacity as a fiduciary, and products are limited to only those offered by certain insurance providers. VWM addresses this conflict of interest by requiring its supervised persons to act in the best interest of the client at all times, including when acting as an insurance agent. VWM periodically reviews recommendations by its supervised persons to assess whether they are based on an objective evaluation of each client’s risk profile and investment objectives rather than on the receipt of any commissions or other benefits. VWM will disclose in advance how it or its supervised persons are compensated and will disclose conflicts of interest involving any advice or service provided. At no time will there be tying between business practices and/or services (a condition where a client or prospective client would be required to accept one product or service conditioned upon the selection of a second, distinctive tied product or service). No client is ever under any obligation to purchase any insurance product.  Insurance products recommended by VWM’s supervised persons may also be available from other providers on more favorable terms, and clients can purchase insurance products recommended through other unaffiliated insurance agencies.

 

Lawrence Michael Mroczkowski is an investment adviser representative of LPL Financial. From time to time, he may offer clients advice or products from those activities and clients should be aware that these services may involve a conflict of interest. VWM always acts in the best interest of the client and clients always have the right to decide whether or not to utilize the services of any VWM representative in such individual’s outside capacities.

 

Lawrence Michael Mroczkowsk owns a real estate company, Larjen LLC, for the sole purpose of owning the building that his investment business will use as its primary office.

 

D.   Selection of Other Advisers or Managers and How This Adviser is Compensated for Those Selections

 

VWM may direct clients to third-party investment advisers to manage all or a portion of the client's assets. This relationship will be memorialized in each contract between client and each third-party advisor. The fees will not exceed any limit imposed by any regulatory agency. VWM will always act in the best interests of the client, including when determining which third-party investment adviser to recommend to clients. VWM will ensure that all recommended advisers are licensed or notice filed in the states in which VWM is recommending them to clients. Please see Item 4 and Item 5 above for more information regarding LPL Financial Sponsored Advisory Programs.

 

Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading

 

A.   Code of Ethics

 

VWM has a written Code of Ethics that covers the following areas: Prohibited Purchases and Sales, Insider Trading, Personal Securities Transactions, Exempted Transactions, Prohibited Activities, Conflicts of Interest, Gifts and Entertainment, Confidentiality, Service on a Board of Directors, Compliance Procedures, Compliance with Laws and Regulations, Procedures and Reporting, Certification of Compliance, Reporting Violations, Compliance Officer Duties, Training and Education, Recordkeeping, Annual Review, and Sanctions. VWM's Code of Ethics is available free upon request to any client or prospective client.

 

B.    Recommendations Involving Material Financial Interests

 

VWM does not recommend that clients buy or sell any security in which a related person to VWM or VWM has a material financial interest.

 

C.    Investing Personal Money in the Same Securities as Clients

 

From time to time, representatives of VWM may buy or sell securities for themselves that they also recommend to clients. This may provide an opportunity for representatives of VWM to buy or sell the same securities before or after recommending the same securities to clients resulting in representatives profiting off the recommendations they provide to clients. Such transactions may create a conflict of interest. VWM will always document any transactions that could be construed as conflicts of interest and will never engage in trading that operates to the client’s disadvantage when similar securities are being bought or sold.

 

D.   Trading Securities At/Around the Same Time as Clients’ Securities

 

From time to time, representatives of VWM may buy or sell securities for themselves at or around the same time as clients. This may provide an opportunity for representatives of VWM to buy or sell securities before or after recommending securities to clients resulting in representatives profiting off the recommendations they provide to clients. Such transactions may create a conflict of interest; however, VWM will never engage in trading that operates to the client’s disadvantage if representatives of VWM buy or sell securities at or around the same time as clients.

 

Item 12: Brokerage Practices

 

A.   Factors Used to Select Custodians and/or Broker/Dealers

 

Custodians/broker-dealers will be recommended based on VWM’s duty to seek “best execution,” which is the obligation to seek execution of securities transactions for a client on the most favorable terms for the client under the circumstances. Clients will not necessarily pay the lowest commission or commission equivalent, and VWM may also consider the market expertise and research access provided by the broker-dealer/custodian, including but not limited to access to written research, oral communication with analysts, admittance to research conferences and other resources provided by the brokers that may aid in VWM's research efforts. VWM will never charge a premium or commission on transactions, beyond the actual cost imposed by the broker-dealer/custodian.

 

VWM will require clients to use LPL Financial.

 

1.      Research and Other Soft-Dollar Benefits

 

While VWM has no formal soft dollars program in which soft dollars are used to pay for third party services, VWM may receive research, products, or other services from custodians and broker-dealers in connection with client securities transactions (“soft dollar benefits”). VWM may enter into soft-dollar arrangements consistent with (and not outside of) the safe harbor contained in Section 28(e) of the Securities Exchange Act of 1934, as amended. There can be no assurance that any particular client will benefit from soft dollar research, whether or not the client’s transactions paid for it, and VWM does not seek to allocate benefits to client accounts proportionate to any soft dollar credits generated by the accounts. VWM benefits by not having to produce or pay for the research, products or services, and VWM will have an incentive to recommend a broker-dealer based on receiving research or services. Clients should be aware that VWM’s acceptance of soft dollar benefits may result in higher commissions charged to the client.

 

VWM receives support services and/or products from LPL Financial, many of which assist the VWM to better monitor and service program accounts maintained at LPL Financial; however, some of the services and products benefit VWM and not client accounts. These support services and/or products may be received without cost, at a discount, and/or at a negotiated rate, and may include the following:

  • investment-related research
  • pricing information and market data
  • software and other technology that provide access to client account data
  • compliance and/or practice management-related publications
  • consulting services
  • attendance at conferences, meetings, and other educational and/or social events
  • marketing support
  • computer hardware and/or software
  • other products and services used by VWM in furtherance of its investment advisory business operations

LPL Financial may provide these services and products directly, or may arrange for third party vendors to provide the services or products to Advisor. In the case of third party vendors, LPL Financial may pay for some or all of the third party’s fees.

These support services are provided to VWM based on the overall relationship between VWM and LPL Financial. It is not the result of soft dollar arrangements or any other express arrangements with LPL Financial that involves the execution of client transactions as a condition to the receipt of services. VWM will continue to receive the services regardless of the volume of client transactions executed with LPL Financial. Clients do not pay more for services as a result of this arrangement. There is no corresponding commitment made by the VWM to LPL or any other entity to invest any specific amount or percentage of client assets in any specific securities as a result of the arrangement. However, because VWM receives these benefits from LPL Financial, there is a potential conflict of interest. The receipt of these products and services presents a financial incentive for Advisor to recommend that its clients use LPL Financial’s custodial platform rather than another custodian’s platform.

 

2.      Brokerage for Client Referrals

 

VWM receives no referrals from a broker-dealer or third party in exchange for using that broker-dealer or third party.

 

3.      Clients Directing Which Broker/Dealer/Custodian to Use

 

VWM will require clients to use a specific broker-dealer to execute transactions. Not all advisers require clients to use a particular broker-dealer.

 

B.    Aggregating (Block) Trading for Multiple Client Accounts

 

VWM does not aggregate or bunch the securities to be purchased or sold for multiple clients. This may result in less favorable prices, particularly for illiquid securities or during volatile market conditions.

 

Item 13: Review of Accounts

 

A.   Frequency and Nature of Periodic Reviews and Who Makes Those Reviews

 

All client accounts for VWM's advisory services provided on an ongoing basis are reviewed at least annually by Lawrence Mroczkowski, Managing Member and Chief Compliance Officer, with regard to clients’ respective investment policies and risk tolerance levels. All accounts at VWM are assigned to this reviewer.

 

B.    Factors That Will Trigger a Non-Periodic Review of Client Accounts

 

Reviews may be triggered by material market, economic or political events, or by changes in client's financial situations (such as retirement, termination of employment, physical move, or inheritance).

 

C.    Content and Frequency of Regular Reports Provided to Clients

 

Each client of VWM's advisory services provided on an ongoing basis will receive a quarterly report detailing the client’s account, including assets held, asset value, and calculation of fees. This written report will come from the custodian.

 

Item 14: Client Referrals and Other Compensation

 

A.   Economic Benefits Provided by Third Parties for Advice Rendered to Clients (Includes Sales Awards or Other Prizes)

 

Other than soft dollar benefits as described in Item 12 above, VWM does not receive any economic benefit, directly or indirectly from any third party for advice rendered to VWM's clients.

 

B.    Compensation to Non – Advisory Personnel for Client Referrals

 

VWM does not directly or indirectly compensate any person who is not advisory personnel for client referrals.

 

Item 15: Custody

 

When advisory fees are deducted directly from client accounts at client's custodian, VWM will be deemed to have limited custody of client's assets and must have written authorization from the client to do so. Clients will receive all account statements and billing invoices that are required in each jurisdiction, and they should carefully review those statements for accuracy.

 

Item 16: Investment Discretion

 

VWM provides discretionary investment advisory services to clients. The advisory contract established with each client sets forth the discretionary authority for trading. Where investment discretion has been granted, VWM generally manages the client’s account and makes investment decisions without consultation with the client as to when the securities are to be bought or sold for the account, the total amount of the securities to be bought/sold, what securities to buy or sell, or the price per share.

 

 

 

 

Item 17: Voting Client Securities (Proxy Voting)

 

VWM will not ask for, nor accept voting authority for client securities. Clients will receive proxies directly from the issuer of the security or the custodian. Clients should direct all proxy questions to the issuer of the security.

 

Item 18: Financial Information

 

A.   Balance Sheet

 

VWM neither requires nor solicits prepayment of more than $1,200 in fees per client, six months or more in advance, and therefore is not required to include a balance sheet with this brochure.

 

B.    Financial Conditions Reasonably Likely to Impair Ability to Meet Contractual Commitments to Clients

 

Neither VWM nor its management has any financial condition that is likely to reasonably impair VWM’s ability to meet contractual commitments to clients.

 

C.    Bankruptcy Petitions in Previous Ten Years

 

VWM has not been the subject of a bankruptcy petition in the last ten years.

 

Item 19: Requirements For State Registered Advisers

 

A.   Principal Executive Officers and Management Persons; Their Formal Education and Business Background

 

VWM currently has only one management person: Lawrence Michael Mroczkowski. Education and business background can be found on the individual's Form ADV Part 2B brochure supplement.

 

B.    Other Businesses in Which This Advisory Firm or its Personnel are Engaged and Time Spent on Those (If Any)

 

Other business activities for each relevant individual can be found on the Form ADV Part 2B brochure supplement for each such individual.

 

C.    Calculation of Performance-Based Fees and Degree of Risk to Clients

 

VWM does not accept performance-based fees or other fees based on a share of capital gains on or capital appreciation of the assets of a client.

 

D.   Material Disciplinary Disclosures for Management Persons of this Firm

 

There are no civil, self-regulatory organization, or arbitration proceedings to report under this section.

 

E.     Material Relationships That Management Persons Have With Issuers of Securities (If Any)

 

See Item 10.C and 11.B.