June 24, 2020
Mutual Trust Asset Management, Inc. (“MTAM”) is registered with the Securities and Exchange Commission as an Investment Adviser. (CRD# 121364) https://adviserinfo.sec.gov/firm/brochure/121364
Mutual Trust Co. of America Securities (“MTCAS”) is a broker dealer registered with the Securities an Exchange Commission and is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC# 25547) (CRD#8494/SEC#8-25547)
Brokerage and investment advisory services and fees differ, and it is important for the retail investor to understand these differences. Free and simple tools are available to research firms and financial professionals at https://www.investor.gov/CRS which also provides educational materials about broker dealers, investment advisers, and investing.
What investment services and advice can you provide me? We offer both brokerage and investment advisory services. We offer these services with equal prominence to our retail clients. In many cases our retail clients receive both services. We do not trade in commodities. We generally provide advice and brokerage services on exchange-traded securities (i.e. equities, fixed income, options,) non exchange traded securities (such as Unit Investment Trusts and structured products) mutual funds and cash positions.
Our brokerage services include buying and selling securities at your direction and providing you with investment recommendations (research, financial tools and investment planning services, and investor education) from time to time or at your request. MTCAS will execute trades of mutual funds, equities, options, fixed income securities, certificates of deposit (CDs) and structured products. Unless we separately agree in writing, we will not monitor your brokerage account and you make the ultimate decision regarding the purchase or sale of investments and are responsible for the performance. We do not have a minimum transactional investment amount.
Our advisory services We offer an array of wealth management services to individuals, families, and their related entities, trusts and estates, retirement plans, charitable organizations, and small business. MTAM provides two types of services, Investment Advisory and Financial Planning. MTAM provides investment management services, which entails management of accounts, the purchase and sale of individual securities, and the selection and dismissal of sub-advisors, by the principals of the firm. As part of our standard services, MTAM monitors your account monthly, or more frequently as circumstances require. MTAM manages client accounts on a discretionary basis, meaning that you provide us with written authority to trade your account for you without contacting you prior to making investments. MTAM generally requires a minimum of $100,000 for investment management. We reserve the right to waive the minimum on a case-by-case basis. We choose investments based upon your goals and objectives and the information that you provide to us, that information is updated regularly. For additional information, please see Regulation Best Interest Disclosures, MTAM’s Form ADV, Part 2A brochure Items 4 and 7 and other applicable documents at https://adviserinfo.sec.gov/firm/brochure/121364.
What fees will I pay? The fees you pay depend on whether you choose brokerage services, advisory services, or both.
For brokerage services through MTCAS , the principal fees and costs are transaction-based fees for recommendations and execution of securities trades. Depending on the investment product you select, these fees can include up-front commissions, as well as fees that are charged on an on-going basis for as long as you hold the investment (“trails”). We are also paid by the issuer whenever we trade their initial purchase orders (IPO). Since we are paid from the commissions and fees on the trading, we do for you we have an incentive to encourage you to trade more frequently and in greater amounts, and to trade with us because we receive more revenue when you do so. We may also trade your securities for the firms account and do not feel this will present any conflict.
You will also pay fees for custodial or administrative services, as well as fees and expenses that are included in the expense ratios of certain of your investments, including in mutual funds.
For advisory services, MTAM is a fee-based investment advisor and only earns fees explicitly enumerated within the fee agreement embedded in the initial investment advisory agreement signed by clients. Fees are negotiable depending on the size and complexity of a client’s account. Annual fees for portfolio management services typically range from 1% to 2.5% of total assets under management. Fees are charged in arrears based upon the assets held in the account at the end of each month. We charge Performance-Based Fees for qualified clients on a negotiated basis which creates on conflict as we will have an incentive to choose better performing assets for the performance fee based accounts. Please refer to our FORM ADV Part 2 A Item 5 Fees and Compensation-Performance Based Fees for further information.https://adviserinfo.sec.gov/firm/brochure/121364 We charge a negotiated hourly rate of between $50 to $500 per hour for Financial Planning services, clients pay an initial deposit then are billed for the balance once the plan is complete. Please refer to our FORM ADV Part 2 A Item 5 Fees and Compensation-Financial Planning Fees for further information. https://adviserinfo.sec.gov/firm/brochure/121364 MTAM’s Fees do not include certain charges imposed by custodians, brokers, and other third parties such as custodial fees, trade commissions, deferred sales charges, 12b-1 fees, odd-lot differentials, transfer taxes, wire transfers, alternative investment processing fees, electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions. MTAM does not have any revenue sharing agreements and we do not receive any payment from your custodian in exchange for holding your account on their platform.
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. Additional information on our fees can be found in MTAM’s t’s ADV Part 2A brochure Item 5 Fees and Compensation and the advisory agreements.
What are your legal obligations to me when providing recommendations as my broker-dealer or when acting as my investment adviser? How else does your firm make money and what conflicts of interest do you have? When we provided you with a recommendation as your broker- dealer or act as your investment adviser, we must 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 recommendations and investment advice, we provide you. Here are some examples to help you understand what this means.
Examples of Ways We Make Money and Conflicts of Interest.
- Third-Party Payments: We receive payments from third party product sponsors and managers (or their affiliates) when we recommend or sell certain products. As such, we have an incentive to recommend (or to invest your assets in) products of third parties that pay us over products of third parties that do not pay us or pay us less.
- Revenue Sharing: Certain managers and sponsors (or their affiliates) share the revenue they earn when you invest in certain of their investment products (primarily mutual funds and variable annuities). Neither MTAM or MTCAS engage in revenue sharing. As such, we may have no incentive to recommend (or to invest your assets in) products of sponsors and managers that share their revenue. To the best of our knowledge neither MTAM or MTCAS, revenue shares with third parties or outside managers.
- Personal Trading: Persons associated with our firm can buy or sell the same securities that we recommend to you, or in which you are already invested. A conflict of interest could exist in such cases if we had the ability to trade ahead of you and potentially receive more favorable prices than you receive. MTAM Code of Ethics and MTCAS internal policies require all recommendations place the interest of the client first. Accounts are reviewed on a regular basis to ensure compliance with the Code of Ethics and conflict of interest policies.
- Rollover Recommendations: We have a conflict of interest when recommending that you roll over a retirement account such as a 401k or IRA to a managed account, because MTAM will receive a fee for managing these assets and MTCAS could receive commissions on the recommendations of the assets. To mitigate this conflict, your advisor will discuss with you the pros and cons of any such rollover, including other options and their relative costs, prior to your decision regarding any rollover.
- Brokerage/Insurance: MTAM currently executes trades through Mutual Trust Company of America Securities (“MTCAS”). An affiliated company. Hilltop Securities clears trades for MTCAS and serves as Custodian. Recommendations to invest in certain insurance products may be made to clients where our representative earns commissions. Not all representatives or supervised locations of MTAM or MTCAS offer insurance products. Clients can use a Custodian or Insurance Company of their choice and have no obligation to utilize the custodian recommended by MTAM. However, the Adviser will retain the right not to accept the account. To mitigate this conflict, we consistently seek best execution and put your interest ahead of ours for all trades for all client accounts. For more information, see Form ADV Part 2 A Item 12 and Item 14 https://adviserinfo.sec.gov/firm/brochure/121364 and Regulation Best Interest Conflicts of Interest. http://www.mutualtrustco.com/form-crs/
For additional information, please see Regulation Best Interest Disclosures, http://www.mutualtrustco.com/form-crs/ Form ADV, Part 2A brochure and other applicable documents https://adviserinfo.sec.gov/firm/brochure/121364 .
How do your financial professionals make money?
The investment adviser representative is paid a percentage of the fee assets under management for the accounts they bring to the firm. The registered representatives of MTCAS are paid a commission on the trades they recommended. If one is both an investment adviser representative and a registered representative, they will not earn a commission if they are being paid a percentage of the investment advisory fee. While the percent charged will always remain the same, the more your portfolio grows the more fees MTAM shall receive, whether because of market performance or additional assets under management, the greater the firms and potentially the representative’s compensation will be. Fees may also decline if the portfolio declines in market value or if assets are taken out of the portfolio. You are never under any obligation to add new assets to your account with MTAM. Some of MTAM’s advisors are also insurance registered and will receive referral fees from the carrier for selling life insurance products. The registered representatives of MTCAS receive commissions based on the securities they recommend. Conflicts are mitigated by diligently confirming the appropriateness of each product for each client, and by making full disclosure of these conflicts, as well as the fact that you are under no obligation to purchase the commissionable assets or insurance products as recommended. For more information, see Form ADV Part 2 A Item 10 and Form ADV Part 2 B at https://adviserinfo.sec.gov/firm/brochure/121364
Do you or your financial professionals have legal or disciplinary history?
Yes.Visit https://adviserinfo.sec.gov/firm/brochure/121364 for a free and simple search tool to research us and our financial professionals. Please also see the Form ADV Part 2 B for the Investment Adviser Representatives of MTAM, which can be found at https://adviserinfo.sec.gov/firm/brochure/121364
For additional information about our broker dealer services, see our website at www.mutualtrustco.com. For additional up-to-date information or a copy of this disclosure, please call 727-799-9922.