Maine Center for Wealth Management, LLC, ("MCWM") provides wealth management and advisory services to its Clients by designing and managing investment portfolios that consist of individual stocks and bonds, stock or bond mutual funds, stock or bond exchange traded funds (ETFs), no-load variable annuities and cash or cash equivalents. Portfolios are designed consistent with each Client’s investment objectives, risk tolerance, time horizon and other individual needs of each Client.
TYPES OF CLIENTS: MCWM provides investment advice to high net worth individuals, trusts, estates, administrators of employment retirement plans such as SEPS, Simple IRAs, pension and profit sharing plans and businesses. MCWM does not have any specific requirements for opening and maintaining an account such as a minimum account size, but MCWM reserves the right to exercise discretion in choosing MCWM’s clients.
RESPONSIBILITIES OF ADVISOR: Maine Center for Wealth Management, LLC, is the Advisor. The Advisor provides the Portfolio Manager with access to the custodian of the Client’s assets under management. The Advisor is not the custodian of the Client’s assets under management.
RESPONSIBILTIES OF PORTFOLIO MANAGER: The investment adviser representative is the Portfolio Manager. The Portfolio Manager provides investment management services regarding certain of Client’s assets under management (hereafter referred to as the Client’s “Portfolio”). The Portfolio Manager may invest and reinvest the Portfolio assets in individual equities and bonds, mutual funds, exchange-traded funds (ETFs), no-load variable annuities, real estate investment trusts, cash and cash equivalents, and other public and private securities or investments. All investments shall be made in accordance with the Client’s investment objectives. At all times, the Portfolio Manager shall act as the Client’s fiduciary and in the Client’s best interests.
RESPONSIBILITIES OF CLIENT: The Client is responsible for providing the Portfolio Manager with all relevant investment related information, including investment objectives, financial information, liquidity needs, tax status and investment timeframes. The Client is responsible for providing the Portfolio Manager with updates of this information as they become available to the Client.
DISCRETIONARY AUTHORITY: Client grants the Advisor and Portfolio Manager full discretionary authority to decide when to purchase, sell, exchange, convert, exercise or trade securities and cash in Client’s account in accordance with Client’s investment objectives. In all such transactions, the Advisor and Portfolio Manager are authorized to act for the Client and on the Client’s behalf.
FEES AND COMPENSATIONS: The Portfolio Manager manages client assets for an advisory fee based upon the market value of the billable assets under management. Billable assets under management include cash and money market funds. Advisory fees are charged in arrears and assessed monthly and are calculated as a percentage of the market value of the assets as of the close of the last trading day of the month. Clients will receive a quarterly billing statement that will account for each monthly advisory fee billed within the previous quarter.
The following is MCWM’s fee schedule:
1.50% on the first $500,000
1.25% on the next $500,000
0.75% on the next $1,000,000
0.50% on the next $2,000,000 to $5,000,000
0.35% on the portion of the account value above $5,000,000
The fee paid by the Client will be calculated as follows:
MCWM will determine the Client’s billable assets under management as of the last trading day of the month;
MCWM will divide by one-twelfth (1/12) the fee percentage that corresponds to Client’s billable assets under management as calculated in (1), above; and then
MCWM will multiply the Client’s billable assets under management as determined in (1), above, by the one-twelfth (1/12) percentage as determined in (2), above.
Advisory fees are different than, and in addition to, other fees and expenses that may apply to a client’s account, such as trading fees and mutual fund expense fees. Portfolio Mangers of MCWM will only recommend “no-load” mutual funds and do not receive a commission for the purchase of any mutual fund on behalf of a Client.
Portfolio Managers are also licensed to sell insurance related investment products and Clients should be aware that Portfolio Managers may receive a commission from the insurance company for selling such insurance investment products to Client. This represents a potential conflict of interest. To protect the Client against this potential conflict of interest Portfolio Managers shall act as the Client’s fiduciary when recommending insurance related investment products and will disclose to the Client when the Portfolio Manager is making such a recommendation and the Portfolio Manager will receive written confirmation from Client that the Client understands that the Portfolio Manager is recommending the purchase of an insurance related investment product for which the Portfolio Manager will receive a commission.
METHODS OF ANALYSIS, INVESTMENT STRATEGIES & RISK OF LOSS: MCWM will analyze the Client’s investment objectives, risk tolerance, current financial situation, needs, goals and concerns about investing. We seek to understand whether our Client is seeking long-term capital gains or whether current income is a primary objective. We also need to understand the liquidity needs of our Client.
When recommending mutual funds for our Clients, we will analyze each fund type and style to assess the holdings in the fund to determine whether a particular fund is correct for the Client.
We will evaluate mutual fund managers to include their present tenure with the fund, how past results measured against market returns for similar funds, the volatility of the fund versus volatility for similar funds as well as the size of the fund. We will also analyze mutual fund charges and expense fees.
To analyze securities and investment products MCWM utilizes Morningstar Office, financial newspapers, magazines and internet resources, research materials provided by third parties; corporate rating services, annual reports, prospectuses and filings with the SEC.
FEES AND COMPENSATIONS: MCWM utilizes mutual funds, exchange-traded funds (ETFs), no-load variable annuities, individual equities and bonds, cash and cash equivalents, with a strong emphasis on mutual fund investing. MCWM rarely recommends individual equities or bonds for a Client’s portfolio, but many Clients’ portfolios contain individual stocks or bonds when they join MCWM and MCWM will work with Clients to determine whether to retain these individual stocks or bonds and if so how MCWM will manage them over time. MCWM generally emphasizes the use of mutual funds over ETFs, unless a particular investment for a Client’s account can only be found in an ETF format rather than mutual fund format. MCWM rarely recommends variable annuities, but when appropriate MCWM will work with Clients to determine the best no-load variable annuity for them given the Client’s goals and objectives.
RISK OF LOSS: MCWM does not guarantee that the Client’s investment will increase in value. Each Client assumes a material risk of loss of their investment. Some of these risks include the following: market risk (the possibility of the Client to experience loss of principal due to factors that negatively affect the financial markets as a whole), including the risk of loss to principal; interest rate risk (the risk to the Client that market interest rates will rise and consequently cause fixed-rate bond values to fall) ; credit risk (the risk to the Client that debt issuers will be unable to repay their financial obligations); inflation risk (the risk to the Client that rising inflation will undermine the return on their investment); economic risks (the risk to the Client that government regulations will negatively affect investment returns); global, national and regional risks (the risk to the Client that government instability will negatively affect investment returns); and risk in the form of technology failures that may lead to an inability to trade securities, among others.
Investing in individual stocks or bonds has greater company or entity specific risk than investing in a pool of stocks or bonds such as in a mutual fund or ETF. The performance of investments in the past does not guarantee how the same investment will perform in the future.
Risks when investing in mutual funds include, among others, the following:
mutual funds are not guaranteed against a risk to loss of principal by any governmental agency or any other entity;
while past performance can assist in judging a particular mutual fund’s volatility over time, past performance of a mutual fund does not guarantee future performance; and
each mutual fund has its own internal expenses that are different from the fees the Client pays their Portfolio Manager and these mutual fund internal expenses will lower the Client overall investment returns.
Investing in securities involves risk of loss that the Client must be prepared to bear.