Transition Financial Advisors Group, Inc. – Client Relationship Summary
Item 1 – Introduction
Transition Financial Advisors Group, Inc. (“Transition”, “we” or “us”) is registered with the Securities Exchange Commission (“SEC”) as a Registered Investment Adviser (“RIA”). As an RIA, our services and compensation structure differ from that of a registered broker-dealer, and it is important for you to understand the differences. Free and simple tools are available to research firms and financial professionals at Investor.gov/CRS. The site also provides educational materials about broker-dealers, investment advisers and investing.
Item 2 – Relationships and Services
What investment services and advice can you provide me?
We provide investment advisory services, including discretionary investment management, financial planning and consulting, and tax planning and preparation services to individuals, trusts, and estates (our “retail investors”).
When a retail investor engages us to provide investment management services we shall monitor, on a continuous basis, the investments in the accounts over which we have investment authority as part of our investment management service. Furthermore, when engaged on a discretionary basis, we shall have the authority, without prior consultation with you (unless you impose restrictions on our discretionary authority), to buy, sell, trade and allocate the investments within your account(s) consistent with your investment objectives. Our discretionary authority over your account(s) shall continue until our engagement is terminated.
When a retail investor engages us to provide financial planning and consulting or tax planning and preparation services, we rely upon the information provided by the client and do not verify or monitor any such information while providing these services. Our financial planning and consulting services are completed upon the communication of our recommendations to the retail investor, while our tax services are completed on delivery of the client’s tax returns.
We do not limit the scope of our investment advisory services to proprietary products or a limited group or type of investment. We generally impose a minimum annual fee retainer of $5,000 or a minimum asset level of $1,000,000 for investment advisory services. These minimum requirements are subject to reduction or waiver at our discretion.
Additional Information: For more detailed information about our Advisory Business and the Types of Clients we generally service, please see Items 4 and 7, respectively in our ADV Part 2A.
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 – Fees, Costs, Conflicts, and Standard of Conduct
What fees will I pay?
We provide our investment advisory services on a fee-only basis. When engaged to provide investment management services, we shall charge a fee calculated as a percentage of your assets under our management (our “AUM Fee”). Our annual AUM Fee is negotiable and based on a tiered fee schedule, with descending fee tiers ranging from 1.00% to 0.15%. In a tiered fee schedule, the client will pay a reduced AUM Fee for assets exceeding certain breakpoint thresholds. For example, a client placing $1,500,000 under our management may pay a 1.00% AUM Fee on the first $1,000,000 and a 0.85% AUM Fee on the remaining assets. The client’s ultimate fee will vary depending on a number of factors including the dollar amount of assets placed under our management and the investment strategy selected. We typically deduct our AUM Fee from one or more of your investment accounts, in arrears, on a quarterly basis. Because our AUM Fee is calculated as a percentage of your assets under management, the more assets you have in your advisory account, the more you will pay us for our investment management services. Therefore, we have an incentive to encourage you to increase the assets maintained in accounts we manage.
We offer our financial planning and consulting services on a fixed fee or hourly rate basis, ranging from $3,000 to $100,000 for fixed fee engagements and $100 to $600 per hour for hourly engagements. The overall fee is dependent on the scope and complexity of the engagement. We may require that up to 50% of the total fee be paid in advance. Tax planning and preparation services are available for a separate and additional fee, ranging from $300 to $350 per hour for standalone tax preparation services, or $150 to $180 per hour when tax preparation is combined with one or more of our other services.
Other Fees and Costs: Your investment assets will be held with a qualified custodian. Custodians generally charge transaction fees for effecting certain securities transactions (for example, transaction fees may be charged for certain mutual fund transactions). These charges will be assessed in accordance with the qualified custodian’s transaction fee schedule. In addition, relative to certain mutual fund and exchange traded fund purchases, certain charges will be imposed at the fund level (e.g. management fees and other fund expenses). 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.
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?
Additional Information: For more detailed information about our fees and costs related to our management of your account, please see Item 5 in our ADV Part 2A.
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:
* We may recommend a particular custodian from whom we receive support services and/or products, which assist us to better monitor and service your account.
* We may recommend rollovers out of employer-sponsored retirement plans and into Individual Retirement Accounts that we manage for an asset-based fee, which could have the effect of increasing our compensation. How might your conflicts of interest affect me, and how will you address them?
Additional Information: For more detailed information about our conflicts of interest, please review our ADV Part 2A.
How do your financial professionals make money?
Our financial professionals are generally compensated on a salary basis, with a discretionary bonus component. Discretionary bonuses are primarily based on the overall profitability of Transition. You should discuss your financial professional’s compensation directly with your financial professional.
Item 4 – Disciplinary History
Do you or your financial professionals have legal or disciplinary history?
No. We encourage you to visit www.Investor.gov/CRS to research our firm and our financial professionals. Furthermore, we encourage you to ask your financial professional: As a financial professional, do you have any disciplinary history? If so, for what type of conduct?
Item 5 – Additional Information
Additional information about our firm is available on the SEC’s website at www.adviserinfo.sec.gov. You may contact our Chief Compliance Officer at any time to request a current copy of our ADV Part 2A or our relationship summary. Our Chief Compliance Officer may be reached by phone: (480) 722-9414.
Who is my primary contact person? Is he or she a representative of an investment adviser or broker-dealer? Who can I talk to if I have concerns about how this person is treating me?
Exhibit of Material Changes
Since our most recent filing dated June 26, 2020, this Client Relationship Summary has been revised at Item 2 to update details regarding our investment advisory and tax preparation fees.