Thrive Wealth Management, LLC - Form CRS
Item 1 – Introduction
Thrive Wealth Management, LLC (“we” or “us”) is registered with the Securities Exchange Commission (“SEC”) as an investment adviser. Our services and compensation structure differ from a registered broker-dealer, and it is important for you to understand the differences between those structures. Free and simple tools are available to research firms and financial professionals at www.investor.gov/CRS. The site also provides educational materials about broker-dealers, investment advisers and investing. The italicized sentences appearing in text boxes below are intended to be “conversation starters” for you to have with us, as required by the instructions to Form CRS.
Item 2 – Relationships and Services
What investment services and advice can you provide me?
As fiduciaries, we provide investment advisory services that typically include investment management services combined with initial and routine financial planning and consulting services to individuals and their trusts and estates (“you,” “clients” or our “retail investors”). We begin that process by meeting with our clients to develop their unique investment objectives, risk tolerance, investment time horizon, withdrawal requirements, and other special circumstances to formulate an investment strategy. We then buy and sell securities to implement the strategy, then monitor the portfolios periodically and make changes to them as we deem necessary. If we manage your portfolio on a discretionary basis, we have the authority to buy and sell investments in your accounts without speaking to you before doing so. However, you can place reasonable restrictions on the securities that we buy by notifying us, in writing. If we manage your portfolio on a non-discretionary basis, you make the ultimate decision regarding the purchase or sale of investments, and we cannot execute any account transactions without obtaining your prior consent. We do not have limit the type of securities we trade for our clients to proprietary products or a limited group or type of investment, but we generally construct and manage portfolios consisting primarily of mutual funds, exchange traded funds (“ETFs”), unaffiliated independent investment managers, individual debt and/or equity securities. In doing so, we may allocate your investment assets into one or more of our model portfolio strategies as described in Item 8 of our Form ADV Part 2A. We do not necessarily impose a minimum annual investment advisory fee, but prefer to work with new clients seeking management of at least $500,000. We provide initial and routine financial planning and consulting services as part of the investment advisory service offering, but we may also provide those services on a stand-alone separate fee basis. When we provide any financial planning and consulting services to a retail investor, we rely upon the information they provide and do not verify or monitor that information while or after providing these services unless specifically engaged to do so. Our financial planning consulting services are completed upon the communication of our recommendations to the retail investor or delivery of a written financial plan. 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 Form 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?
For investment advisory services, and with certain exceptions described in Item 5 of our Form ADV Part 2A, the annual fee is based upon a percentage of the total market value of assets placed under our management according to a tiered schedule ranging between 1% on the first $500,000, to 0.40% for the value of all assets under management exceeding $4,000,001. Our negotiable fee for stand-alone financial planning and consulting services is either $200 per hour, or it ranges between $1,000 and $100,000 on a fixed fee basis. We either deduct our fees from one or more of your investment accounts or bill you for our services quarterly in advance. Because our fee is based upon assets under management, the more assets you designate for our management, the more you will pay for our services. Therefore, we may have an incentive to encourage you to increase the amount of assets that you designate for our management. However, under the fee schedule, as the value of assets under our management increases, the applicable fee percentage decreases incrementally at each tier.
Your account will be held with a qualified custodian. You will also be responsible for the fees and expenses charged by qualified custodians and imposed by broker dealers according to their fee schedules. Those fees and expenses include but are not limited to transaction charges, wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts, securities transactions, or maintaining an account. If your assets are invested in mutual funds, ETFs, or other registered and unregistered investment companies, you will bear your pro rata share of the investment management fees and other fees of the funds, which are in addition to the fees you pay us. These fees and expenses are described in each fund’s prospectus or other offering documents. If your assets are allocated to unaffiliated independent investment managers, you will incur an additional charge for their services as stated in the separate agreement you sign with the independent investment managers. 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 detailed information about our fees and costs related to our management of your account, please see Item 5 in our Form ADV Part 2A.
Help me understand how these fees and costs might affect my investments. If I give you $500,000 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:
* Our firm and certain of our financial professionals may offer commission-based insurance products. This presents conflicts of interest, because we or they can recommend that you purchase insurance commission-based products based upon the compensation we or they will receive, rather than your individual need. You are not under any obligation to purchase those products.
* We may recommend that you engage a particular custodian from whom we receive support services. This presents a conflict of interest, because our receipt of their support makes us more inclined to continue using and recommending them.
* We may recommend rollovers out of employer-sponsored retirement plans and into Individual Retirement Accounts that we manage for an asset-based fee. If we don’t currently manage your account held with your employer’s plan, this will increase our compensation.
How might your conflicts of interest affect me, and how will you address them?
For more detailed information about our conflicts of interest, please review Items 4, 5, 10, 11, 12, and 14 of Form ADV Part 2A.
How do your financial professionals make money?
Some of our financial professionals are compensated on a salary basis and are eligible to receive ongoing discretionary bonuses that can be but are not necessarily based on the acquisition of new clients and their growth of assets. Other financial professionals are compensated based upon the amount of client assets that they manage on behalf of the firm. Finally, certain of our financial professionals are equity owners of the firm, who stand to receive a share of the firm’s profits. These payment structures present conflicts of interest, as they could incentivize our financial professionals to recommend that you place additional assets under our management. We mitigate that conflict by adhering to our fiduciary duty when making investment recommendations, so that we make recommendations in conformity with each client’s investment objectives and savings strategy. 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.
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 to request a current copy of our Form ADV Part 2A or our relationship summary. Our Chief Compliance Officer is available by phone at 215-376-5530.
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?