Is an Investment Advisory Account Right for You?

There are different ways you can get help with your investments. You should carefully consider which types of accounts and services are right for you.

Item 1. Introduction

Meramec Financial Planners LLC (“MFP”, “Firm”, “We”, “Us”, “Our”) is an SEC registered investment advisor that provides advisory services for a fee rather than for brokerage commissions. As a retail investor, it is important to understand the differences between services and fees of an investment advisor and a broker-dealer. Investor.gov/CRS offers free and simple tools to research firms and financial professionals. Additionally, it also provides educational materials about broker-dealers, investment advisors, and investing.

Item 2. What investment services and advice can you provide me? 

We offer the following investment advisory services to you: 

Asset Management: We will offer you advice on a regular basis. We will discuss your investment goals, design with you a strategy to achieve your investment goals, and regularly monitor your account. We will manage your account on a discretionary basis (which means that we can buy and sell investments in your account without asking you in advance) and/or a non-discretionary basis (which means that we will obtain approval from you prior to executing any transactions so you make the ultimate decision regarding the purchase or sale of investments). 

We generally do not limit clients to proprietary products or a limited menu of products and types of investments. This service will continue until terminated pursuant to the terms of your executed Advisory Agreement. We do not have a minimum to open an account.

Financial Planning: Services will be provided to you based on your selection on the Advisory Agreement and may include, but are not limited to, a review of investment accounts, including reviewing asset allocation and providing repositioning recommendations; strategic tax planning; a review of retirement accounts and plans that have recommendations; a review of insurance policies and recommendations for changes, if necessary; one or more retirement scenarios; estate planning review and recommendations; and education planning with funding recommendations. Recommendations will be made periodically on an ongoing basis until terminated by either party.

ERISA Services: We also serve as a fiduciary when advising, helping or assisting plan sponsors, plan participants, or retirement investors with their investment decisions on a non-discretionary basis. Retirement accounts are monitored on an ongoing basis. We have a fiduciary duty to act in the best interest of our client. 

We serve as a limited scope ERISA 3(21) fiduciary that can advise, help and assist plan sponsors with their investment decisions on a non-discretionary basis. Plans are monitored on an ongoing basis. We have a fiduciary duty to act in the best interest of the Client. The plan sponsor is still ultimately responsible for the decisions made in their plan, though using us can help the plan sponsor delegate liability by following a diligent process. 

We also act as an ERISA 3(38) Investment Manager where we offer discretionary management and control of a given retirement plan’s assets. We are solely responsible and liable for the selection, monitoring and replacement of the plan’s investment options on an ongoing basis.

Conversation Starters 

• “Given 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?”

 

Item 3. What fees will I pay? 

We are paid for our services as follows: 

Asset Management: The amount paid to our firm and your financial professional generally does not vary based on the type of investments selected on your behalf. The asset‐based fee reduces the value of your account and will be generally deducted from your account. Some investments (such as mutual funds and variable annuities) impose additional fees that will reduce the value of your investment over time. Also, with certain investments such as variable annuities, you may have to pay fees such as “surrender charges” to sell the investment. Fees are billed quarterly in advance. Our fees vary and are negotiable. Generally, the more assets you have in the advisory account, the more you will pay in total fees. We therefore have an incentive to increase the assets in your account in order to increase our fees. You may also pay a transaction fee to a broker-dealer when we buy or sell an investment for you. You will also pay fees to a broker‐dealer or bank that will hold your assets (called “custody”). You pay our advisory fee even if there were no transactions within the account. 

Financial Planning: MFP charges an ongoing fixed fee for financial planning and consulting. Prior to the planning process the Client will be provided an estimated plan fee which will be based on the complexity of the engagement. MFP reserves the right to waive the fee should the Client implement the plan through MFP. Ongoing Fee Services are offered based on an annual fee to never exceed $200,000, charged monthly or quarterly depending on the Client’s election. Fees are billed in advance of each billing period. Ongoing Fee Services will continue year over year until canceled, in writing, by either MFP or the Client.

ERISA Services: The annual fees are based on the market value of the Included Assets and shall not exceed 1%. Fees may be charged quarterly or monthly in arrears or in advance based on the assets as calculated by the custodian or record keeper of the Included Assets (without adjustments for anticipated withdrawals by Plan participants or other anticipated or scheduled transfers or distribution of assets) on the last business day of the previous quarter. The fee schedule, which includes compensation of MFP for the services is described in detail in the ERISA Plan Agreement. The Plan is obligated to pay the fees, however the Plan Sponsor may elect to pay the fees. Clients may elect to be billed directly or have fees deducted from Plan Assets. MFP does not reasonably expect to receive any additional compensation, directly or indirectly, for its services. If additional compensation is received, MFP will disclose this compensation, the services rendered, and the payer of compensation.

You may also pay fees and costs applicable to common categories such as custodian fees, account maintenance fees, fees related to mutual funds and variable annuities, and other transactional fees and product-level fees.

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. For more information regarding our fees and costs, review ADV Part 2A Item 5.

Conversation Starters

“Help 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.

Investment Accounts: Generally, we get paid based on the assets in your account. We may recommend that you add assets or funds into that account. Even though that advice may be in your best interest, that advice is conflicted because the more money in your account, the more we would collect in fees from you.

Conversation Starters

“How might your conflicts of interest affect me, and how will you address them?”

Additional Information

For more information about our conflicts of interest, we recommend reading our ADV Part 2A, Items 4 and 10.

How do your financial professionals make money?

Our financial services professionals are compensated based on a percentage of assets they manage and/or on a portion of the total advisory fees received by us.

This is a conflict of interest because our financial professionals have an incentive to encourage you to increase your assets in your accounts, recommend our advisory services to you, and recommend you purchase investments that result in additional compensation to them. For more information about our conflicts of interest, we recommend reading our ADV Part 2A, Items 4 and 10.

Item 4. Do you or your financial professionals have legal or disciplinary history?

No, please visit Investor.gov/CRS for a free and simple search tool to research MFP and our financial professionals.

Conversation Starters

“As a financial professional, do you have any disciplinary history? For what type of conduct?”

Item 5. Additional Information

To find additional information about MFP, such as a full copy of the ADV Part 2, and to request a copy of the Customer Relationship Summary, please send us an email at kelly@mfp-stl.com. If you would like to request up-to-date information as well as to request a copy of the relationship summary, please contact us via phone at 314-496-7067. You may also find a copy of the most recent ADV Part 2 here.

Conversation Starters

“Who is my primary contact person? Is he or she a representative of an investment advisor or a broker-dealer? Who can I talk to if I have concerns about how this person is treating me?”