Maintaining the trust and confidence of our clients is a high priority. That is why we want you to understand how we protect your privacy when we collect and use information about you, and the steps that we take to safeguard that information. This notice is provided to you on behalf of Prosperitas Financial, LLC (“Prosperitas Financial”).
Information We Collect: In connection with providing investment products, financial advice, or other services, we obtain non-public personal information about you, including:
- Information we receive from you on account applications, such as your address, date of birth, Social Security Number, occupation, financial goals, assets and income;
- Information about your transactions with us, our affiliates, or others;
- Information about your visits to our website. We store records of the activities on our sites in our web server logs, which automatically capture and save the information electronically. The information we collect helps us administer the site, analyze its usage, protect the website and its content from inappropriate use, and improve the user’s experience.
- Information received from credit or service bureaus or other third parties, such as your credit history or employment status.
Categories of Information We Disclose: We may only disclose information that we collect in accordance with this policy. Prosperitas Financial does not sell customer lists and will not sell your name to telemarketers.
Categories of Parties to Whom We Disclose: We will not disclose information regarding you or your account at Prosperitas Financial, except under the following circumstances:
- To entities that perform services for us or function on our behalf, including financial service providers, such as a clearing broker-dealer, investment company, or insurance company, other investment advisers;
- To comply with broker-dealer firms that have regulatory requirements to supervise certain representatives’ activities;
- To consumer reporting agencies,
- To third parties who perform services or marketing, client resource management, or other parties to help manage your account on our behalf;
- To your attorney, trustee or anyone else who represents you in a fiduciary capacity;
- To our attorneys, accountants, or auditors; and
- To government entities or other third parties in response to subpoenas or other legal processes as required by law or to comply with regulatory inquiries.
How We Use Information: Information may be used among companies that perform support services for us, such as data processors, client relationship management technology, technical systems consultants, and programmers, or companies that help us market products and services to you for a number of purposes, such as:
- To protect your accounts/non-public information from unauthorized access or identity theft;
- To process your requests such as securities purchases and sales;
- To establish or maintain an account with an unaffiliated third party, such as a clearing broker-dealer providing services to you and/or Prosperitas Financial;
- To service your accounts, such as by issuing checks and account statements;
- To comply with Federal, State, and Self-Regulatory Organization requirements;
- To keep you informed about financial services of interest to you.
Regulation S-AM: Under Regulation S-AM, a registered investment adviser is prohibited from using eligibility information that it receives from an affiliate to make a marketing solicitation unless: (1) the potential marketing use of that information has been clearly, conspicuously and concisely disclosed to the consumer; (2) the consumer has been provided a reasonable opportunity and a simple method to opt out of receiving the marketing solicitations; and (3) the consumer has not opted out. Prosperitas Financial does not receive information regarding marketing eligibility from affiliates to make solicitations.
Our Security Policy: We restrict access to nonpublic personal information about you to those individuals who need to know that information to provide products or services to you and perform their respective duties. We maintain physical, electronic, and procedural security measures to safeguard confidential client information.
Cyber Security: Internal policies and procedures are in place to address cyber security. A copy of this policy is available upon request.
Departing Investment Adviser Representatives (“IARs”): If your IAR’s affiliation with Prosperitas Financial ends and he or she joins a non-affiliated securities broker-dealer or registered investment adviser, Prosperitas Financial will permit the IAR to use certain client contact information to solicit clients to join the IAR’s new financial services provider. The client contact information that the IAR may use is limited to your name, address, email address, phone number and account title.
Certain states have adopted a requirement for you to approve the sharing of information in advance, otherwise known as an “opt-in” choice. If you live in an “opt-in” state (e.g., California, Massachusetts, Maine, Alaska, North Dakota or Vermont), then Prosperitas Financial will require your consent to share your information with unaffiliated third parties who are not servicing your account. State requirements vary and may change without notice.
Succession Planning: In the event that the owner(s) of Prosperitas Financial retire, become incapacitated, or perish unexpectedly, your information would be disclosed to an unaffiliated third party for the purposes of facilitating a business succession plan. A change in control of ownership of Prosperitas Financial would require your consent, as dictated by your signed agreement with Prosperitas Financial, in order to continue providing services to you.
Your Right to Opt Out: Federal privacy laws give you the right to restrict us from sharing your personal financial information. These laws balance your right to privacy with Prosperitas Financial’s need to provide information for normal business purposes. You have the right to opt out of sharing certain information with affiliated and unaffiliated companies of our firm. Choosing to restrict the sharing of your personal financial information will not apply to (1) your information that we may share with companies that help promote and market our own products or products offered under a joint agreement with another company; (2) records of your transactions–such as your loan payments, credit card or debit card purchases, and checking and savings account statements–to firms that provide data processing and mailing services for our firm; (3) information about you in response to a court order; and (4) your payment history on loans and credit cards to credit bureaus. If you opt out, you limit the extent to which Prosperitas Financial can provide your personal financial information to non-affiliated companies.
Complaint Notification: Please direct complaints to: Mark Petersen at Prosperitas Financial, LLC, 25060 Avenue Stanford, Valencia, CA 91355; (661) 255-9555.
Our firm, Prosperitas Financial, 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, including Asset Management, Comprehensive Portfolio Management, and Financial Planning & Consulting, to clients. If you open an advisory account with our firm, we’ll meet with you to understand your current financial situation, existing resources, objectives, and risk tolerance. Based on what we learn, we’ll recommend a portfolio of investments that is monitored at least annually, and if necessary, rebalanced to meet your changing needs and goals. 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 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 included in our Comprehensive Portfolio Management for no additional fee. Financial Planning & Consulting is also offered as a standalone service for an hourly fee. We do not monitor your investments for the Financial Planning & Consulting service.
Additional information about our advisory services is in Item 4 of our Firm Brochure, which is available online at https://adviserinfo.sec.gov/.
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 fees will I pay?
- You will be charged an ongoing annual fee applied quarterly in advance based on the value of the assets in your account. Our maximum Comprehensive Portfolio Management and Asset Management annual fee is 2.00%. The more assets you have in your advisory account, the more you will pay us. We therefore have an incentive to increase the assets in your advisory account in order to increase our fees. Our fees vary and are negotiable. The amount you pay will depend, for example, 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. In rare cases, we will agree to send you invoices rather than automatically deduct our firm’s fees from your advisory account.
- Our maximum hourly rate is $1,000 for our Financial Planning & Consulting service. We charge an upfront retainer when you sign an agreement for this service or charge you when we provide a financial plan or consultation.
- The custodian that holds your assets charges you a transaction fee when we buy or sell an investment for you. The custodian’s transaction fees are in addition to our firm’s fees for our Asset Management and Comprehensive Portfolio Management services.
- You may also pay charges imposed by the custodian holding your accounts for certain investments and maintaining your account. 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 certain cases, we select third party money managers, sub-advisers, and/or separate account managers to assist us with managing your account. If selected, they will charge you a fee, which will be described to you in their Form ADV and/or agreement.
- 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 about our fees is in Item 5 of our Firm Brochure, which is available online at https://adviserinfo.sec.gov/.
Questions to Ask Us: 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?
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:
- One or more persons affiliated with Prosperitas are registered representatives and investment adviser representatives of NEXT Financial Group, Inc. (“NEXT”). NEXT is registered as a broker-dealer, and as a registered investment adviser with the Securities and Exchange Commission (“SEC”). NEXT is also a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Registered Representatives of NEXT earn commissions and ongoing trails, as applicable, on securities transactions effected through NEXT. In addition, when acting as a NEXT investment adviser representative, fees on advisory assets under management are earned. While NEXT is not responsible for the management, operations, or compliance programs of Prosperitas, NEXT conducts certain recordkeeping and oversight of Prosperitas as required under FINRA Rules. Because of the affiliation with NEXT, these persons may have three different but concurrent roles:
- As a registered person with NEXT who receives commissions for recommending securities.
- As an investment adviser representative of NEXT who receives a fee for rendering advisory services (applicable only for states in which dual registration is permitted); and
- As an investment adviser representative of Prosperitas who offers services outside of NEXT.
NEXT’s brokerage services and fees from their Form CRS at the following link: https://files.brokercheck.finra.org/crs_46214.pdf
- Our firm’s financial professionals include licensed insurance agents who sell insurance products for a commission. They have an incentive to recommend insurance products to you in order to increase their compensation.
- Since we recommend third party money managers to assist with managing certain accounts, we have an incentive to recommend a manager who shares a larger portion of their advisory fee with us than other managers.
Additional information about our conflicts of interest is in Item 10 of our Firm Brochure, which is available online at https://adviserinfo.sec.gov/.
Questions to Ask Us: How might your conflicts of interest affect me, and how will you address them?
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.
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 that are material to the evaluation of our advisory business or the integrity of our management. Visit Investor.gov/CRS for a free and simple search tool to research our firm and our financial professionals.
Questions to Ask Us: As a financial professional, do you have any disciplinary history? For what type of conduct?
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 # 315768. You may also contact our firm at (661) – 255 – 9555 to request a copy of this relationship summary and other up-to-date information.
Questions to Ask Us: 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?