Firm Description
Annapolis Financial Services, LLC is a limited liability company formed in the State
of Maryland in 1995. It currently operates under the name Bay Point Wealth
(referred to below as Bay Point Wealth, Bay Point, us, our, or we) and has been
registered with the U.S. Securities and Exchange Commission since April 28,
2015.
Principal Owners
William James Hufnell and William Joseph Hufnell are Bay Point Wealth’s principal
owners.
Types of Advisory Services
Bay Point provides discretionary investment advisory services on a fee basis as
discussed in Item 5 below. Bay Point's annual investment advisory fee shall include
investment advisory services, and, to the extent specifically requested by the
client, financial planning and consulting services. In the event that the client
requires extraordinary planning and/or consultation services (to be determined in
the sole discretion of Bay Point), Bay Point may determine to charge for such
additional services, the dollar amount of which shall be set forth in a separate
written notice to the client.
To commence the investment advisory process, Bay Point will ascertain each
client’s investment objective(s) and then allocate the client’s assets consistent with
the client’s designated investment objective(s), financial goals, income needs, tax
circumstances and risk tolerance. Once allocated, Bay Point provides ongoing
supervision of the account(s). Before engaging Bay Point to provide investment
advisory services, clients are required to enter into an Investment Advisory
Agreement with Bay Point setting forth the terms and conditions of the engagement
(including termination), describing the scope of the services to be provided, and
the fee that is due from the client. Clients may impose restrictions on investing in
certain securities or types of securities.
Bay Point Wealth also regularly furnishes advice to clients on matters not involving
securities, such as financial planning matters, taxation issues, and estate planning.
Bay Point Wealth provides personalized financial planning and discretionary
investment management services to individuals, trusts, estates, and small
businesses and non-discretionary investment management services to one client
as an exception only. Advice is provided through consultation with the client and
may include: determination of financial objectives, identification of financial
problems, cash flow management, tax planning, insurance review, investment
management, education funding, retirement planning, and estate planning.
Investment advice is an integral part of financial planning. In addition, Bay Point
Wealth advises clients regarding cash flow, college planning, retirement planning,
tax planning and estate planning.
A written evaluation of each client's initial situation is usually provided to the client,
often in the form of a net worth statement. Periodic reviews are also communicated
to provide reminders of the specific courses of action that require attention. More
frequent reviews occur but are not necessarily communicated to the client unless
immediate changes are recommended.
Other professionals (e.g., lawyers, accountants, insurance agents) are engaged
directly by the client on an as-needed basis. Unless otherwise disclosed in this
brochure, conflicts of interest will be disclosed to affected clients in the unlikely
event they arise.
The initial meeting, which may be by telephone, is free of charge and is considered
an exploratory interview to determine the extent to which financial planning and
investment management may be beneficial to the client.
Financial Planning Agreement
A financial plan is designed to help the client with all aspects of financial planning
without ongoing investment management after the financial plan is completed.
The financial plan may include, but is not limited to: a net worth statement; a cash
flow statement; a review of investment accounts, including reviewing asset
allocation and providing repositioning recommendations; strategic tax planning; a
review of retirement accounts and plans including recommendations; a review of
insurance policies and recommendations for changes, if necessary; one or more
retirement scenarios; estate planning review and recommendations; and
education planning with funding recommendations.
Detailed investment advice is provided as part of a financial plan. Implementation
of the recommendations is at the discretion of the client.
Please Note: Planning Limitations. Registrant believes that it is important for the
client to address financial planning issues on an ongoing basis. Registrant’s
advisory fee, as set forth at Item 5 below, will remain the same regardless of
whether or not the client determines to address financial planning issues with
Registrant. It remains each client’s responsibility to promptly notify Registrant if
there is ever any change in his/her/its financial situation or investment objectives
for the purpose of reviewing/evaluating/revising our previous recommendations
and/or services.
Advisory Service Agreement
Most clients choose to have Bay Point Wealth manage their assets in order to
obtain ongoing in-depth advice and life planning. All aspects of the client’s
financial affairs are reviewed, including those of their minor children, upon request.
Realistic and measurable goals are set and objectives to reach those goals are
defined. As goals and objectives change over time, suggestions are made and
implemented on an ongoing basis.
The scope of work and fees for an Advisory Service Agreement is provided to the
client in writing prior to the start of the relationship. An Advisory Service Agreement
generally includes: cash flow management; insurance review; investment
management (including performance reporting); education planning; retirement
planning; estate planning; and tax planning, as well as the implementation of
recommendations within each area.
Although the Advisory Service Agreement is an ongoing agreement and constant
adjustments are required, the length of service to the client is at the client’s
discretion.
Asset Management
Assets are invested primarily in no-load mutual funds and exchange-traded funds
(ETFs), usually through discount brokers. Shareholders of mutual funds and ETFs
are indirectly responsible for the payment of the fees and expenses of these
investments, which include investment management fees that are disclosed in
each fund’s prospectus. Broker-dealers may also charge a transaction fee for the
purchase of some funds.
Stocks and bonds may be purchased or sold through a brokerage account when
appropriate. The brokerage firm may charge fees for certain stock and bond
trades. Bay Point Wealth does not receive any compensation, in any form, from
fund companies.
Investments may also include: equities (stocks), warrants, corporate debt
securities, commercial paper, certificates of deposit, municipal securities,
investment company securities (variable life insurance, variable annuities, and
mutual funds shares), U.S. government securities, and interests in partnerships.
Initial public offerings (IPOs) are not available through Bay Point Wealth.
ERISA PLAN and 401(k) INDIVIDUAL ENGAGEMENTS
Trustee Directed Plans. Bay Point may be engaged to provide discretionary
investment advisory services to ERISA retirement plans, whereby the Firm shall
manage Plan assets consistent with the investment objective designated by the
Plan trustees. In such engagements, Bay Point will serve as an investment
fiduciary as that term is defined under The Employee Retirement Income Security
Act of 1974 (“ERISA”). Bay Point will generally provide services on an “assets
under management” fee basis per the terms and conditions of an Investment
Advisory Agreement between the Plan and the Firm.
Participant Directed Retirement Plans. Bay Point may also provide investment
advisory and consulting services to participant directed retirement plans per the
terms and conditions of a Retirement Plan Services Agreement between Bay Point
and the plan. For such engagements, Bay Point shall assist the Plan sponsor with
the selection of an investment platform from which Plan participants shall make
their respective investment choices (which may include investment strategies
devised and managed by Bay Point), and, to the extent engaged to do so, may
also provide corresponding education to assist the participants with their decision
making process.
Client Retirement Plan Assets. If requested to do so, Bay Point shall provide
investment advisory services relative to 401(k) plan assets maintained by the client
in conjunction with the retirement plan established by the client’s employer. In such
event, Bay Point shall allocate (or recommend that the client allocate) the
retirement account assets among the investment options available on the 401(k)
platform. Bay Point’s ability shall be limited to the allocation of the assets among
the investment alternatives available through the plan. Bay Point will not receive
any communications from the plan sponsor or custodian, and it shall remain the
client’s exclusive obligation to notify Bay Point of any changes in investment
alternatives, restrictions, etc. pertaining to the retirement account. Unless
expressly indicated by the Bay Point to the contrary, in writing, the client’s 401(k)
plan assets shall be included as assets under management for purposes of Bay
Point calculating its advisory fee.
Miscellaneous
Limitations of Financial Planning and Non-Investment Consulting/
Implementation Services. To the extent requested by the client, Bay Point will
generally provide financial planning and related consulting services regarding non-
investment related matters, such as tax and estate planning, insurance, etc. Bay
Point will generally provide such consulting services inclusive of its advisory fee
set forth at Item 5 below (exceptions could occur based upon assets under
management, special projects, stand-alone planning engagements, etc. for which
Firm may charge a separate or additional fee). Please Note. Bay Point believes
that it is important for the client to address financial planning issues on an ongoing
basis. Bay Point’s advisory fee, as set forth at Item 5 below, will remain the same
regardless of whether or not the client determines to address financial planning
issues with Bay Point. Please Also Note: Bay Point does not serve as an
attorney, accountant, or insurance agent, and no portion of our services should be
construed as same. Accordingly, Bay Point does not prepare legal documents,
prepare tax returns, or sell insurance products. To the extent requested by a client,
we may recommend the services of other professionals for non-investment
implementation purpose (i.e., attorneys, accountants, insurance, etc.). The client
retains absolute discretion over all such implementation decisions and is free to
accept or reject any recommendation from Bay Point and/or its representatives. If
the client engages any professional (i.e., attorney, accountant, insurance agent,
etc.), recommended or otherwise, and a dispute arises thereafter relative to such
engagement, the client agrees to seek recourse exclusively from the engaged
professional. At all times, the engaged licensed professional[s] (i.e., attorney,
accountant, insurance agent, etc.), and not Bay Point, shall be responsible for the
quality and competency of the services provided.
Retirement Plan Rollovers. A client or prospective client leaving an employer
typically has four options regarding an existing retirement plan (and may engage
in a combination of these options): (i) leave the money in the former employer’s
plan, if permitted, (ii) roll over the assets to the new employer’s plan, if one is
available and rollovers are permitted, (iii) roll over to an Individual Retirement
Account (“IRA”), or (iv) cash out the account value (which could, depending upon
the client’s age, result in adverse tax consequences). If Bay Point recommends
that a client roll over their retirement plan assets into an account to be managed
by Bay Point, such a recommendation creates a conflict of interest if Bay Point will
earn a new (or increase its current) advisory fee as a result of the rollover. Whether
Bay Point provides a recommendation as to whether a client should engage in a
rollover or not, Bay Point is acting as a fiduciary within the meaning of Title I of the
Employee Retirement Income Security Act and/or the Internal Revenue Code, as
applicable, which are laws governing retirement accounts. No client is under any
obligation to roll over retirement plan assets to an account managed by Bay Point.
Bay Point’s, Chief Compliance Officer, William James Hufnell, remains
available to address any questions that a client or prospective client may
have regarding the conflicts of interest presented by such rollover
recommendation.
Please Note-Use of Mutual and Exchange Traded Funds: Bay Point utilizes
mutual funds and exchange traded funds for its client portfolios. In addition to Bay
Point’s investment advisory fee described below, and transaction and/or custodial
fees discussed below, clients will also incur, relative to all mutual fund and
exchange traded fund purchases, charges imposed at the fund level (e.g.,
management fees and other fund expenses). Please Note-Use of DFA Mutual
Funds: Bay Point utilizes the mutual funds issued by Dimensional Fund Advisors
(“DFA”). DFA funds are generally only available through registered investment
advisers approved by DFA. Thus, if the client was to terminate Bay Point’ services,
and transition to another adviser who has not been approved by DFA to utilize DFA
funds, restrictions regarding additional purchases of, or reallocation among other
DFA funds, will generally apply. ANY QUESTIONS: Bay Point’s Chief
Compliance Officer, William James Hufnell, remains available to address any
questions that a client or prospective client may have regarding the above.
ESG: We don’t have or recommend a strategy:
Please Note: Socially Responsible (ESG) Investing Limitations.
Socially
Responsible Investing involves the incorporation of Environmental, Social and
Governance (“ESG”) considerations into the investment due diligence process.
ESG investing incorporates a set of criteria/factors used in evaluatin
g potential
investments: Environmental (i.e., considers how a company safeguards the
environment); Social (i.e., the manner in which a company manages relationships
with its employees, customers, and the communities in which it operates); and
Governance (i.e., company management considerations). The number of
companies that meet an acceptable ESG mandate can be limited when compared
to those that do not, and could underperform broad market indices. Investors must
accept these limitations, including potential for underperformance. As with any type
of investment (including any investment and/or investment strategies
recommended and/or undertaken by Bay Point), there can be no assurance that
investment in ESG securities or funds will be profitable, or prove successful. Bay
Point does not maintain or advocate an ESG investment strategy, but will seek to
employ ESG if directed by a client to do so. If implemented, Bay Point shall rely
upon the assessments undertaken by the unaffiliated mutual fund, exchange traded
fund or separate account manager to determine that the fund’s or portfolio’s
underlying company securities meet a socially responsible mandate.
Portfolio Activity. Bay Point has a fiduciary duty to provide services consistent
with the client’s best interest. As part of its investment advisory services, we will
review client portfolios on an ongoing basis to determine if any changes are
necessary based upon various factors, including, but not limited to, investment
performance, fund manager tenure, style drift, account additions/withdrawals,
and/or a change in the client’s investment objective. Based upon these factors,
there may be extended periods of time when we determine that changes to a
client’s portfolio are neither necessary nor prudent. Of course, as indicated below,
there can be no assurance that investment decisions made by Bay Point will be
profitable or equal any specific performance level(s). Clients nonetheless remain
subject to the fees described in Item 5 below during periods of account inactivity.
Client Obligations. In performing its services, Bay Point shall not be required to
verify any information received from the client or from the client’s other
professionals, and is expressly authorized to rely thereon. It remains the client’s
responsibility to promptly notify us if there is ever any change in their financial
situation or investment objectives for the purpose of reviewing, evaluating or
revising Bay Point’s previous recommendations and/or services.
ByAllAccounts and eMoney Advisor Platform. Bay Point makes available
“ByAllAccounts” and the “eMoney Advisor Platform” to clients to provide periodic
comprehensive reporting services which can incorporate all of the client’s
investment assets, including those investment assets that are not part of the assets
managed by Bay Point (the “Excluded Assets”). The client and/or their other
advisors that maintain trading authority, and not Bay Point, shall be exclusively
responsible for the investment performance of the Excluded Assets. Unless
otherwise specifically agreed in writing, Bay Point’s service relative to the Excluded
Assets is limited to reporting only.
Therefore, Bay Point shall not be responsible for the investment performance of
the Excluded Assets. Rather, the client and/or the client’s designated other
investment professional(s) maintain supervision, monitoring and trading authority
for the Excluded Assets.
If Bay Point is asked to make a recommendation as to any Excluded Assets, the
client is under absolutely no obligation to accept the recommendation, and Bay
Point shall not be responsible for any implementation error (timing, trading, etc.)
relative to the Excluded Assets. In the event the client desires that Bay Point
provide investment advisory services for the Excluded Assets, the client may
engage Bay Point to do so pursuant to the terms and conditions of an agreement
between Bay Point and the client.
The eMoney Advisor Platform also provides access to other types of information,
including financial planning concepts, which should not be construed as
personalized investment advice or recommendations provided by Bay Point. Bay
Point shall not be held responsible for any adverse results a client may experience
if the client engages in financial planning or other functions available on the
eMoney Advisor Platform without Bay Point’s assistance or oversight.
Disclosure Statement. A copy of Bay Point’s written Privacy Notice, Form CRS
and Disclosure Brochure and Brochure Supplement, as set forth on Parts 2A and
2B of Form ADV, shall be provided to each client prior to, or contemporaneously
with, the execution of the Investment Advisory Agreement or Financial Planning
and Consulting Agreement.
Investment Risk. Different types of investments involve varying degrees of risk,
and it should not be assumed that future performance of any specific investment
or investment strategy (including the investments and/or investment strategies
recommended or undertaken by Bay Point) will be profitable or equal any specific
performance level(s).
Cash Sweep Accounts. Account custodians generally
require that cash proceeds
from account transactions or cash deposits be swept into and/or initially maintained
in the custodian’s sweep account. The yield on the sweep account is generally
lower than those available in money market accounts. To help mitigate this issue,
Registrant shall generally purchase a higher yielding money market fund available
on the custodian’s platform with cash proceeds or deposits, unless Registrant
reasonably anticipates that it will utilize the cash proceeds during the subsequent
90-day period to purchase additional investments for the client’s account.
Exceptions and/or modifications can and will occur with respect to all or a portion
of the cash balances for various reasons, including, but not limited to, the amount
of dispersion between the sweep account and a money market fund, an indication
from the client of an imminent need for such cash, or the client has a demonstrated
history of writing checks from the account. ANY QUESTIONS: Registrant’s Chief
Compliance Officer, William James Hufnell, remains available to address any
questions that a client or prospective client may have regarding the above.
Other Assets. A client may:
• hold securities that were purchased at the request of the client or acquired
prior to the client’s engagement of the Registrant. Generally, with potential
exceptions, Bay Point does not/would not recommend nor follow such
securities, and absent mitigating tax consequences or client direction to
the contrary, would prefer to liquidate such securities. Please Note:
If/when liquidated, it should not be assumed that the replacement
securities purchased by Bay Point will outperform the liquidated positions.
To the contrary, different types of investments involve varying degrees of
risk, and there can be no assurance that future performance of any specific
investment or investment strategy (including the investments and/or
investment strategies recommended or undertaken by Bay Point) will be
profitable or equal any specific performance level(s). In addition, there may
be other securities and/or accounts owned by the client for which Bay Point
does not maintain custodian access and/or trading authority; and,
• hold other securities and/or own accounts for which Bay Point does not
maintain custodian access and/or trading authority.
Corresponding Services/Fees: When agreed to by Bay Point, Bay Point shall:
(1) remain available to discuss these securities/accounts on an ongoing basis
at the request of the client; (2) monitor these securities/accounts on a regular
basis, including, where applicable, rebalancing with client consent;(3) shall
generally consider these securities as part of the client’s overall asset allocation;
and, (4) report on such securities/accounts as part of regular reports that may be
provided by Bay Point; and, (5) include the market value of all such securities for
purposes of calculating advisory fee.
WE DON’T RECOMMEND Cryptocurrency: For clients who want exposure to
cryptocurrencies, including Bitcoin, the Registrant, will advise the client to consider
a potential investment in corresponding exchange traded securities, or an
allocation to separate account managers and/or private funds that provide
cryptocurrency exposure. Crypto is a digital currency that can be used to buy
goods and services, but uses an online ledger with strong cryptography (i.e., a
method of protecting information and communications through the use of codes)
to secure online transactions. Unlike conventional currencies issued by a monetary
authority, cryptocurrencies are generally not controlled or regulated and their price
is determined by the supply and demand of their market. Because cryptocurrency
is currently considered to be a speculative investment, the Registrant will not
exercise discretionary authority to purchase a cryptocurrency investment for client
accounts. Rather, a client must expressly authorize the purchase of the
cryptocurrency investment. Please Note: The Registrant does not recommend or
advocate the purchase of, or investment in, cryptocurrencies. The Registrant
considers such an investment to be speculative. Please Also Note: Clients who
authorize the purchase of a cryptocurrency investment must be prepared for the
potential for liquidity constraints, extreme price volatility and complete loss
of principal.
Cybersecurity Risk. The information technology systems and networks that
Registrant and its third-party service providers use to provide services to
Registrant’s clients employ various controls, which are designed to prevent
cybersecurity incidents stemming from intentional or unintentional actions that
could cause significant interruptions in Registrant’s operations and result in the
unauthorized acquisition or use of clients’ confidential or non-public personal
information. Clients and Registrant are nonetheless subject to the risk of
cybersecurity incidents that could ultimately cause them to incur losses, including
for example: financial losses, cost and reputational damage to respond to
regulatory obligations, other costs associated with corrective measures, and loss
from damage or interruption to systems. Although Registrant has established its
systems to reduce the risk of cybersecurity incidents from coming to fruition, there
is no guarantee that these efforts will always be successful, especially considering
that Registrant does not directly control the cybersecurity measures and policies
employed by third-party service providers. Clients could incur similar adverse
consequences resulting from cybersecurity incidents that more directly affect
issuers of securities in which those clients invest, broker-dealers, qualified
custodians, governmental and other regulatory authorities, exchange and other
financial market operators, or other financial institutions.
Bay Point Wealth does not participate in a wrap fee program.
As of January 1, 2024, Bay Point Wealth managed approximately $399,220,444 in
assets under management on a discretionary basis.