SEC Form CRS

Wellspring Financial Advisors, LLC June 30, 2020

Relationship Summary

Intoduction

Wellspring Financial Advisors, LLC (“Wellspring”) is a multi-family office and registered as an investment adviser with the Securities and Exchange Commission. This form is a requirement of the SEC, therefore the questions/answers below focus solely on our investment advisory services, which are regulated under their supervision. Free and simple tools are available to research firms and financial professionals at Investor.gov/CRS, which also provides educational materials about broker-dealers, investment advisers and investing. Our firm and financial professionals’ registration information are also publicly available on this website.

Relationships & Services

Q: What investment advisory services and advice can you provide me?
A: We offer customized investment advisory services to ultra-high net worth investors, in addition to our tax preparation and compliance, comprehensive financial and estate planning, business succession and risk management services.
We offer advice on a full suite of securities described in Item 8 of our Form ADV Part 2A (“Disclosure Brochure,” available at Investor.gov/CRS), including equities, fixed income, mutual funds, ETFs, options, alternatives, and similar investments. Our services are generally provided on a discretionary basis, which means that we have your authorization to buy and sell securities for your account (once we have your prior consent). This authority is usually unlimited and remains in effect until you revoke it. We also provide non-discretionary investment advice, where we make investment recommendations to you and you decide whether to implement the recommendation. Each client decides on which of these management methods is best suited for them.
Some securities carry additional costs, such as mutual funds and ETFs. We do not give advice on any proprietary investment products. We review portfolios at least annually. However, we do monitor accounts on a continuous basis and conduct reviews if you change your objectives, risk tolerance, or upon significant market and economic events, or if we change our investment strategy.

Wellspring generally requires a minimum net worth of $25,000,000. We reserve the right to waive that requirement.
Q: Given my financial situation, should I choose an investment advisory service?
A: Advisory services are usually appropriate when you have a larger portfolio of securities for which you require ongoing advice. Investors who maintain few securities holdings and are not inclined to make changes to their portfolio are likely best suited for a traditional brokerage account with a FINRA-registered firm.
Q: How will you choose investments to recommend to me?
A: We recommend investments based upon your individual circumstances, financial situation, expectation of current and future cash needs, investment objective, and risk tolerance. In addition, we attempt to identify those investments in which we expect to yield an acceptable level of return given the amount of risk you are willing to assume, taking into account the level of diversification and how different securities and asset classes may complement one another.
Q: What is your relevant experience, including your licenses, education, and other qualifications?
A: Our financial advisors have been in the financial services industry for several years and maintain professional designations such as the CFA®, CFP®, CPA, and/or PFS^TM. You can find information on any professional designations of your financial advisor in the Form ADV Part 2B (“Brochure Supplement”) we provide you at the onset of the advisory relationship.
Q: What do these qualifications mean?
A: These qualifications assure that our professionals have met specific regulatory requirements required to conduct investment activities. In addition, professional certifications such as the CFP®, CFA®, and CPA require successful passing of the certification exam as well as rigorous continuing education requirements.

Fees, Costs, Conflicts & Standard of Conduct

Q: What investment advisory fees will I pay?
A: Our investment advisory fees are calculated as a percentage of the assets you have placed under supervision with Wellspring. We convert the asset-based fee to a fixed fee for approximately two years and re-evaluate the fees given the level of assets and breadth of the services we provide to you. Over time fees will rise and fall with the value of the assets you have with Wellspring as well as the services provided. These advisory fees are part of our total overall family office fees, which include our other areas of focus as well (financial, estate and tax). In addition to our advisory fees, you may be charged transaction fees by your custodian for its services. These fees vary depending on the custodian. Under a transaction fee arrangement, the more transactions effected in your account, the more fees you will pay, and high activity in your account does not assure positive portfolio performance. For custodians that charge their fees based upon a percentage of your assets, such fees may be more than would be the case if you are charged a transaction-based fee. You can find more information about our fees and costs under Item 5 of our Disclosure Brochure
Q: Help me understand how these investment fees and costs might affect my investments. If I give you $10,000,000 to invest, how much will go to fees and costs, and how much will be invested for me?
A: We charge an asset-based fee which is then converted to a flat fixed fee. As an example, you could be charged around 0.40% of the initial portfolio, set up as a flat fee, and billed on a quarterly basis.
Fees and costs will reduce any amount of money you make on your investments over time. As a result, you will pay fees and costs whether you make or lose money on your investments. Please make sure you understand what fees and costs you are paying.
Q: 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?
A: When we act as your investment adviser, we must act in your best interest and not put our interests ahead of yours. Conflicts of interest are broadly defined, and you should understand and ask us about these because conflicts can affect the investment advice we provide. Here is an example to help you understand what this means. To the extent the firm utilizes third-party asset managers, the economic arrangement we have negotiated with such manager could cause us to favor that manager versus other similarly qualified managers.
Q: How might your conflicts of interest affect me, and how will you address them?
A: Conflicts of interest would incentivize us to put our interests ahead of yours. We manage these conflicts through disclosures and employing supervision procedures to ensure our financial advisors are acting in your best interest. If a financial advisor has outside business activities, it will be disclosed in their Brochure Supplement. Please see Items 10, 11, and 14 of our Disclosure Brochure as well as your financial advisor’s Brochure Supplement for additional information about conflicts of interest.
Q: How do your financial professionals make money?
A: Our financial advisors are paid a salary and bonus based upon the quality of the work they do on your behalf.

Disciplinary History

Q: Do you or your financial professionals have legal or disciplinary history?
A: No. You can visit Investor.gov/CRS for a free and simple search tool to research our firm and our financial professionals.

Additional Information

Q: Who is my primary contact person?
A: Your Wellspring financial advisor will be your primary point of contact. However, administrative requests may be handled by an administrative assistant or client service professional.
Q: Is he or she a representative of an investment adviser or a broker-dealer?
A: None of our professionals are associated with a broker-dealer, and all investment professionals are licensed with Wellspring as investment adviser representatives.
Q: Who can I talk to if I have concerns about how this person is treating me?
A: In the event you have issues to be addressed, you may contact Ms. Laura Capuozzo
at 216-367-0680 or by email to lcapuozzo@wellspringadvisorsllc.com.

You can find additional information about our investment advisory services at Investor.gov/CRS. You may also request a printed copy of this Client Relationship Summary by contacting us at 216-367-0680 or via email to lcapuozzo@wellspringadvisorsllc.com.