Evaluating a Financial Advisor in Ponte Vedra – The Disclosure Form You’ve Never Heard of

The term “Financial Advisor” carries a broad definition, and the entire process of evaluating an Advisor can be very confusing. There’s a reason why personal relationships/trust are the source of success in our industry. I’ve tried to liken it to another consumer experience, and truly, could not think of a comparable industry as complex to decipher and discern the qualifications of professionals as the financial services sector. At Atlantic Edge, we feel that working with either a Chartered Financial Analyst (CFA) and/or a Certified Financial Planner (CFP®) should carry the same weight in a client’s decision-making process as they would when selecting an accountant (CPA) or doctor (M.D.). Unfortunately, the financial services industry is inundated with alternative designations and certifications that confuse the consumer. You may have heard the term “fiduciary” which has become a buzzword in our industry. For years, we’ve advocated to our family and friends to, at minimum, ask their advisor if they are a fiduciary (requiring an advisor to act in their client’s best interest). However, simply being a fiduciary does not tell the whole story.  Thankfully, the Securities and Exchange Commission (SEC) mandates that every investment advisory firm disclose important details in its annual Form ADV filing. While this document may not be widely recognized among clients, it offers transparent answers to vital questions that every client should be aware of.

Along with all other RIA firms, we recently had to update and file our Firm ADV. Let’s dive into some of our favorite sections!

#1 - Assets Under Management 

One of the first pieces of information you’ll find, the firm’s total Assets Under Management. How much do they manage? To put this number in perspective, investment firms focused on individuals as clients averaged $330 million in assets under management in 2023. Source: Investor Adviser Association

Atlantic Edge Wealth’s ADV Filing“As of 12/31/2023 with its updated ADV Part 2a, Atlantic Edge manages $456,765,671, of which $454,945,865.61 is on a discretionary basis and $1,819,805.56 is non-discretionary.”

#2 – Fees and Compensation

In these ADV forms, advisors are required to disclose how much they charge clients and all the forms of compensation they receive. Most firms have an annual fee, which is a fee based on a percentage of the assets being managed. In 2019, the RIA Industry average fee was 1.17% (Source: Comply), Atlantic Edge Wealth’s ADV Filing

Assets Under Management Annual Fee Up to 

Up to $1,000,000                 1.00% per annum 

Plus, the next $4 million          0.75% per annum 

Plus, the next $5 million          0.50% per annum 

Over $10 million                 0.30% per annum

#3 - Additional Fees and Expenses

Firms that operate solely on a management fee are classified as "Fee-Only." We believe this fee model facilitates better service and outcomes for a client. With this transparent fee structure, clients can have confidence that the fee they pay only increases with the growth of their accounts, fostering an alignment of interests between the client and advisor. 

Conversely, a “fee-based” advisor may be receiving additional compensation beyond an annual management fee, which opens the door for the client to ask additional questions about their compensation. This could include commissions on sales products, expensive insurance policies, and/or referrals. Atlantic Edge Wealth’s ADV Filing“In addition to our advisory fees, clients are also responsible for the fees and expenses charged by custodians and imposed by broker-dealers, including, but not limited to, any transaction charges imposed by a broker-dealer with which an independent investment manager effects transactions for the client's account(s). Please refer to the "Brokerage Practices" section (Item 12) of this Brochure for additional information. Item 14 Client Referrals and Other Compensation 

Client Referrals 

It is Atlantic Edge’s policy not to engage solicitors or to pay related or non-related persons for referring potential clients to our firm. 

Other Compensation 

It is Atlantic Edge's policy not to accept or allow our related persons to accept any form of compensation, including cash, sales awards, or other prizes, from a non-client in conjunction with the advisory services we provide to our clients.”

#4 – Disciplinary Information

Firms are required to disclose any legal or disciplinary events that would be material to the consumer. You can also search FINRA’s BrokerCheck to review an advisor’s background. Obviously, it is important to verify whether your advisor has been involved in any client misconduct. Atlantic Edge Wealth’s ADV Filing

Disciplinary Information 

We are required to disclose any legal or disciplinary events that are material to a client's or prospective client's evaluation of our advisory business or the integrity of our management. 

Our firm and our management personnel have no reportable disciplinary events to disclose. 

Unfortunately, the financial services industry continues to be incredibly confusing to consumers. This reality is especially frustrating to us, as choosing the wrong financial advisor can have significant consequences. That is why we will continue to advocate for transparency and clarity in the financial services and investment management industry. Thankfully, the SEC does get it right with their requirement to provide new clients with an updated Form ADV. If you have any questions about your portfolio, please let us know, and we will gladly provide a second opinion. Even if that means confirming you know you are in good hands!