Form CRS – Client Relationship Summary – January 6, 2022
Our firm, Pasadena Private Wealth, LLC, is an investment adviser registered with the Securities and Exchange Commission. We feel that it is important for you to understand how advisory and brokerage services and fees differ in order to determine which type of account is right for you. There are free and simple tools available to research firms and financial professionals at www.investor.gov/CRS, which also provides educational materials about investment advisers, broker-dealers, and investing.
What investment services and advice can you provide me?
We are a registered investment adviser that offers investment advisory services to clients. Our advisory services include Asset Management, Portfolio Monitoring, Business Management, and Financial Planning & Consulting. If you open an advisory account with our firm, we’ll meet with you to understand your current financial situation, existing resources, goals, and risk tolerance. Based on what we learn, we’ll recommend a portfolio of investments that is monitored at least monthly, and if necessary, rebalanced to meet your changing needs, stated goals and objectives. We’ll offer you advice on a regular basis and contact you at least annually to discuss your portfolio.
You can select in our agreement whether we are allowed to buy and sell investments in your account without asking you in advance (“discretion”) or buy and sell investments in your account only after receiving your permission (“non-discretion”). If you select non-discretion, you make the ultimate decision regarding the purchase or sale of investments. Any limitations will be described in the signed advisory agreement. We will have discretion or non-discretion until the advisory agreement is terminated by you or our firm. We do not restrict our advice to limited types of products or investments. Our firm does not impose requirements for opening and maintaining accounts or otherwise engaging us.
Financial Planning & Consulting is also offered as a separate service for a flat or hourly fee.
What fees will I pay?
You will be charged an ongoing quarterly fee based on the value of the investments in your account. Our Asset Management fee, whether on a flat fee or a percentage of assets, shall not exceed 1% per annum of assets under or management. Portfolio Monitoring clients will be charged an ongoing quarterly fee based on the value of the investments in the monitored accounts which shall not exceed 0.50% per annum. The more assets you have in your advisory account, the more you will pay us which creates an incentive to increase the assets in your account. Our fees vary and are negotiable. The amount you pay will depend on the services you receive and the amount of assets in your account. Our firm’s fees will be automatically deducted from your advisory account, which will reduce the value of your advisory account, or can be billed to you and paid from an outside account.
Our Financial Planning clients are charged a minimum of $2,500 data gathering fee and an hourly fee of $800 will be charged for on-going Financial Planning and Consulting guidance. The minimum of $2,500 for data gathering is charged upfront when you sign an agreement and the hourly fee is charged to you when we provide a financial plan or consultation. Financial Planning is included in our Asset Management service.
Our Business Consulting services are offered on a flat or hourly fee. The minimum flat fee for this service is $1,000 and the hourly fee is $150. In certain cases, our firm will reduce the hourly or flat fee.
The broker-dealer that holds your assets does not charge you a transaction fee when we buy or sell an investment for you assuming that you meet certain service requirements such as asset minimums or electronic statements.
Some investments, such as mutual funds, index funds, exchange traded funds, and variable annuities, charge additional fees that will reduce the value of your investments over time. In addition, you may have to pay fees such as “surrender charges” to sell variable annuities.
In certain cases, we may select third party money managers who will assist us with managing your account. If selected, our firm compensates third party investment advisory firms or individual advisors a percentage of the overall investment advisory fee charged by our firm.
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.
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 may create a conflict with your interests. You should understand and ask us about these conflicts. Here are some examples to help you understand what this means:
Some of our financial professionals are Registered Representatives of Pensionmark, LLC (“Pensionmark”) or GT Securities, Inc. (“GTS”), unaffiliated broker-dealers and insurance agents. Your financial professional may offer brokerage or insurance products through Pensionmark or GTS or advisory services through our firm. Brokerage products, insurance products and advisory services are different, and the fees our firm charges are separate from what is paid for with these products. Registered Representatives charge a transaction-based fee each time they buy or sell a security in a brokerage account which creates an incentive to recommend transactions to increase compensation.
Mr. Iain Whyte, one of the Principals of PPW, is an equity owner, Chairman and Manager of Pasadena Private Finance, LLC (“PPF”) which specializes in providing loans to Southern California middle market companies. Clients also have the opportunity to invest in PPF. Mr. Whyte is also the sole owner of Pasadena Private Strategic Advisors, LLC a firm providing various types of business consulting services. A conflict of interest exists as PPW personnel have an incentive to recommend to clients the services of their financial industry affiliations to increase their compensation.
Pasadena Private Real Estate Fund 1, L.P. (“PPREF1”) is managed by Pasadena Private Real Estate, LLC (“PPRE”) which is controlled by related persons of PPW. PPREF1 is a Delaware registered Limited Partnership that invests in commercial income-producing real estate in the United States. PPRE is the General Partner and an investor in PPREF1. The control of PPRE by our related persons presents a conflict of interest in that PPW personnel have an incentive to recommend that PPW clients invest in PPREF1.
How do your financial professionals make money?
Our financial professionals are compensated based on the revenue our firm earns from their advisory services or recommendations, the amount of client assets they service, and the time and complexity required to meet a client’s needs. In addition, they are compensated based on the type of product sold and/or product sales commissions through their outside business activities.
Do you or your financial professionals have legal or disciplinary history?
No, our firm and financial professionals do not have any legal and disciplinary history to disclose. Visit Investor.gov/CRS for a free and simple search tool to research our firm and our financial professionals.
You can find additional information about our firm’s investment advisory services on the SEC’s website at www.adviserinfo.sec.gov by searching CRD #295178. You may also contact our firm at (626) 993-9300 to request a copy of this relationship summary and other up-to-date information.
Questions to Ask Us:
- 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?
- Help me understand how these fees and costs may 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?
- How might your conflicts of interest affect me, and how will you address them?
- As a financial professional, do you have any disciplinary history? For what type of conduct?
- Who is my primary contact person?
- Is he or she a representative of an investment adviser or a broker-dealer?
- Who can I talk to if I have concerns about how this person is treating me?
Additional information about our advisory services, fees, and conflicts of interest are located in Items 4, 5, and 10/12, respectively, of our Firm Brochure, which is available online at https://adviserinfo.sec.gov/firm/summary/295178.