Lewis Wealth Management. Part 2A of Form ADV - Firm Brochure & Part 2B of Form ADV - Brochure Supplement

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1 Lewis Wealth Management Part 2A of Form ADV - Firm Brochure & Part 2B of Form ADV - Brochure Supplement

2 Item 1. Cover Page for Part 2A of Form ADV: FIRM BROCHURE MARCH 2014 LEWIS WEALTH MANAGEMENT, LLC 26 WEST DRY CREEK CIRCLE, SUITE 510 LITTLETON, CO FIRM CONTACT: D. AUSTIN LEWIS CHIEF COMPLIANCE OFFICER FIRM WEBSITE ADDRESS: This brochure provides information about the qualifications and business practices of Lewis Wealth Management, LLC. Below, please find our responses to the required questions (underlined), as required by the Colorado Department of Regulatory Agencies. If you have any questions about this brochure, please call our toll free number or drop us an at The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority. Additional information about Lewis Wealth Management, LLC is available on the SEC s website: and our website: CRD # Please note that the use of the term registered investment adviser and description of Lewis Wealth Management, LLC and/or our associates as registered does not imply a certain level of skill or training. You are encouraged to review this brochure and any supplements for more information on the qualifications of our firm and its employees.

3 Item 2. Material Changes to Our Part 2A of Form ADV: Firm Brochure Lewis Wealth Management, LLC is required to advise you here of any material changes to our firm brochure ( Brochure ) from our last annual update. Those annual changes must be clearly dated, indentified, and communicated in the updated Brochure, or by a separate communication accompanying the updated Brochure. This information will not be provided to anyone who has not previously received our Brochure. Last Annual Amendment Filing: 03/18/2013 Since our last annual amendment update, we have changed our fax number to

4 Section: Item 3. Table of Contents: Page(s): Item 1. Cover Page for Part 2A of Form ADV: Firm Brochure... 1 Item 2. Material Changes to our Part 2A of Form ADV: Firm Brochure... 2 Item 3. Table of Contents... 3 Item 4. Advisory Business... 4 Item 5. Fees & Compensation... 5 Item 6. Performance-Based Fees & Side-By-Side Management... 7 Item 7. Types of Clients & Account Requirements... 7 Item 8. Methods of Analysis, Investment Strategies & Risk of Loss... 7 Item 9. Disciplinary Information... 9 Item 10. Other Financial Industry Activities & Affiliations Item 11. Code of Ethics, Participation or Interest in Client Transactions & Personal Trading Item 12. Brokerage Practices Item 13. Review of Accounts or Financial Plans Item 14. Client Referrals & Other Compensation Item 15. Custody Item 16. Investment Discretion Item 17. Voting Client Securities Item 18. Financial Information Item 19. Requirements for State-Registered Advisers Form ADV Part 2B - Brochure Supplement

5 Item 4. Advisory Business We specialize in the following types of services: investment management, financial planning, and consulting. As of December 31, 2013, our assets under management were $33,000,000. We are dedicated to providing clients with a full array of wealth management services. We are a limited liability company formed in the State of Colorado and have been in business as an investment adviser since January The firm is wholly owned by D. Austin Lewis. Description of the Types of Advisory Services We Offer Investment Management: We emphasize continuous and regular account supervision. As part of our investment management service, we generally create a portfolio, consisting of mutual funds, exchange traded funds ( ETFs ), individual stocks or bonds, options, and other public and private securities and investments. Each client s investment strategy and portfolio is tailored to meet their goals and objectives and may include some or all of these securities and investments. Each portfolio contains securities and investments that we determine to be suitable for the client s circumstances. Once the appropriate portfolio has been determined, we review the portfolio at least quarterly, and if necessary, rebalance the portfolio based upon the client s stated goals and objectives. Each client may place reasonable restrictions on the types of investments to be held in their portfolio. Financial Planning and Consulting - Projects: We provide a variety of financial planning and consulting services to our clients. These services are based upon an analysis of the client s current situation as well as their goals and objectives. In most cases, this analysis will culminate with the preparation of a written financial plan for the client. In other cases, this analysis will be used while consulting with the client and will not include a written financial plan. This depends on the scope of the engagement with the client. Please see Item 5 in this Brochure for more information. Our financial planning and consulting services may encompass one or more of the following areas: investment planning, retirement planning, estate planning, charitable planning, education planning, tax planning, and insurance analysis. Further, our financial planning and consulting services will include recommendations for the client. These recommendations may include that clients follow a savings and investment program, create or revise an estate plan, obtain or revise insurance coverage, or establish an education savings plan or charitable giving program. When appropriate, we refer clients to accountants, attorneys, and other specialists as needed to implement our recommendations, or for further consultation or services. If the scope of the client engagement includes a written financial plan, it will include a written summary of the client s current financial situation, and a recommended course of action. If a written financial plan is not included in the engagement, a written summary is not provided. 4

6 Instead, recommendations will be communicated to the client during meetings with their advisor. Financial planning and consultation services are typically completed within six (6) months of the engagement, provided that all the necessary information we request from the client is provided promptly. Implementation of any recommendations will be at the discretion of the client. Individual Tailoring of Advice to Clients We offer individualized advice to clients on a wide variety of wealth management issues, including investment management, financial planning and consulting. Typically, clients do not impose restrictions on our investment management activities as this could pose difficulties in managing their account. That being said, we do occasionally accommodate reasonable client restrictions regarding investment management on a case-by-case basis so long as we believe that these restrictions are in the best interest of the client. Participation in Wrap Fee Programs We do not offer any wrap fee programs. Regulatory Assets Under Management We managed 1 $33,000,000 on a discretionary basis and $0 on a non-discretionary basis as of December 31, Item 5. Fees & Compensation We are required to describe the fees you will be charged and by whom. Our fee schedule is set forth herein. We reserve the right to negotiate fees on a case-by-case basis. How We Are Compensated For Our Advisory Services Investment Management - Annual Advisory Fees The amount of our fee depends upon the assets under management in your account(s). Our firm s fees are billed on a pro-rata annualized basis quarterly in advance based on the value of your account(s) on the last day of the previous quarter. This level of engagement includes regular account supervision, regular meetings with the advisor, and a written financial plan. 1 Please note that our method for computing the amount of client assets we manage can be different from the method for computing assets under management required for Item 5.F in Part 1A of Form ADV. However, we have chosen to follow the method outlined for Item 5.F in Part 1A of Form ADV. If we decide to use a different method at a later date to compute client assets we manage, we will keep documentation describing the methods we use and communicate the change in an annual update to this Brochure. The disclosure of the amount of assets we manage may be rounding to the nearest $100,000. Our as of date must not be more than three months before the date we last updated our Brochure in response to Item 4.E of Form ADV Part 2A. 5

7 Assets Under Management Annual Percentage First $1 million* 1.25% Next $1 million to $2.5 million 1.00% Next $2.5 million to $5 million 0.80% Next $5 million to $10 million 0.70% $10 million to $25 million 0.60% More than $25 million 0.50% *While there is no required minimum level of assets under management, the minimum advisory fee is $5,000 per year (charged at $1,250 per quarter), not to exceed 3% of the assets under management. Our firm s fees are billed on a pro-rata annualized basis quarterly in advance based on the value of your account(s) on the last day of the previous quarter. Fees will generally be automatically deducted from our clients managed accounts. In rare cases, we may agree to directly bill clients. As part of this process, the client understands and acknowledges the following: (a) The independent custodian sends separate statements at least quarterly showing all disbursements from the account, including the amount of the advisory fees paid to us; (b) The client provides an authorization permitting us to be directly paid by these terms; (c) We send a quarterly invoice, and we will notify the independent custodian of the fee we collect each quarter at the same time we send the invoices to the clients; (d) Our invoice includes a legend (as required by relevant state statutes and rules) that states that all clients are urged to compare information provided in their statements with those from the independent custodian. Financial Planning and Consulting - Project Fees Clients may engage advisor on a project basis. The advisor s fee for work on a project basis is $250 per hour. Any project fees that advisor believes will require more than two hours to complete will require the advance retainer of $500 with the balance due upon the rendering of the service. In all cases, we will not require a retainer exceeding $500 when services cannot be rendered within six months. Referrals to Third Party Money Managers We do not accept any compensation from third party money managers upon the referral of client business. Other Types of Fees and Expenses Clients will incur transaction charges for trades executed in their accounts. These transaction fees are separate from our fees and will be disclosed in the statements and account information you 6

8 receive from the independent custodian. Clients will also pay directly any fund expenses or management fees charged by any mutual fund, exchange traded fund, or any private investment. These fees are separately disclosed in fund prospectuses or disclosures. Termination and Refunds We charge our advisory fees quarterly in advance. In the event that either you or we wish to terminate the engagement, we will refund the unearned portion of our advisory fee to you. Please contact us in writing if you wish to terminate our services. Upon termination, we will proceed to relinquish access to your account(s) and promptly process a pro-rata refund of unearned advisory fees. Commissionable Securities Sales We do not sell securities for a commission. Item 6. Performance-Based Fees & Side-By-Side Management We do not charge performance fees. Item 7. Types of Clients & Account Requirements We have the following types of clients: Individuals and high net worth individuals; Trusts, estates or charitable organizations; Corporations, limited liability companies and/or other business types. Our requirements for opening and maintaining accounts or otherwise engaging us: We do not have a minimum account balance requirement. Methods of Analysis Item 8. Methods of Analysis, Investment Strategies & Risk of Loss We use the following methods of analysis in formulating our investment advice and/or managing client assets: Cyclical Analysis: In this type of technical analysis, we measure the movements of a particular security or asset class against the overall market in an attempt to predict the price movement of the security or asset class. This presents a risk here in that these predictions may or may not be accurate.. Fundamental Analysis: We attempt to measure the intrinsic value of a security or asset class by looking at economic and financial factors (including the overall economy, 7

9 industry conditions, and the financial condition and management of the company itself) to determine if a company or asset class is underpriced (indicating it may be a good time to buy or otherwise rebalance a portfolio) or overpriced (indicating it may be time to sell or otherwise rebalance a portfolio). Fundamental analysis does not attempt to anticipate market movements. This presents a potential risk, as the price of a security or asset class can move up or down along with the overall market regardless of the economic and financial factors considered in evaluating the stock. Technical Analysis: We analyze past market movements and apply that analysis to the present in an attempt to recognize recurring patterns of investor behavior and potentially predict future price movement. Technical analysis does not consider the underlying financial condition of a company or asset class. This presents a risk in that a poorlymanaged or financially unsound company may underperform regardless of market movement. Investment Strategies We May Use Long-Term Purchases: When utilizing this strategy, we may purchase securities with the idea of holding them for a relatively long time (typically held for at least a year). A risk in a long-term purchase strategy is that by holding the security for this length of time, we may not take advantages of short-term gains that could be profitable to a client. Moreover, if our predictions are incorrect, a security may decline sharply in value before we make the decision to sell. Typically we employ this sub-strategy when we believe the securities to be well valued; and/or we want exposure to a particular asset class over time, regardless of the current projection for this class. Trading: We purchase securities with the idea of selling them very quickly (typically within 30 days or less). We do this in an attempt to take advantage of our predictions of brief price swings. Margin Transactions: We have the ability to purchase stocks for your portfolio with money borrowed from your brokerage account. This allows you to purchase more stock than you would be able to with your available cash, and allows us to purchase stock without selling other holdings. Option Writing: We may use options as an investment strategy. An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an asset (such as a share of stock) at a specific price on or before a certain date. An option, just like a stock or bond, is a security. An option is also a derivative, because it derives its value from an underlying asset. The two types of options are calls and puts: o A call gives us the right to buy an asset at a certain price within a specific period of time. We will buy a call if we have determined that the stock will increase substantially before the option expires. 8

10 Risk of Loss o A put gives us the holder the right to sell an asset at a certain price within a specific period of time. We will buy a put if we have determined that the price of the stock will fall before the option expires. We will use options to "hedge" a purchase of the underlying security; in other words, we will use an option purchase to limit the potential upside and downside of a security we have purchased for your portfolio. We use "covered calls", in which we sell an option on security you own. In this strategy, you receive a fee for making the option available, and the person purchasing the option has the right to buy the security from you at an agreed-upon price. We use a "spreading strategy", in which we purchase two or more option contracts (for example, a call option that you buy and a call option that you sell) for the same underlying security. This effectively puts you on both sides of the market, but with the ability to vary price, time and other factors. Investing in securities involves risk of loss that clients should be prepared to bear. While the value of your investments may increase and your account(s) could enjoy a gain, it is also possible that the value of your investments may decrease and your account(s) could suffer a loss. It is important that you understand the risks associated with investing, and ask us any questions you may have. Description of Material, Significant, or Unusual Risks We generally invest client s cash balances in money market funds, FDIC insured certificates of deposit, high-grade commercial paper and/or government backed debt instruments, or mutual funds or exchange traded funds that use these strategies. Ultimately, we try to achieve the highest return on our client s cash balances through relatively low-risk, conservative investments. In most cases, at least a partial cash balance will be maintained in a money market account so that our firm may debit advisory fees for our services related to our investment management service. We strongly encourage and advise our clients to maintain a separate emergency fund with enough cash to see them through an extended down market or other adverse financial events. We can help advice you in this regard. Item 9. Disciplinary Information There are no legal or disciplinary events that are material to the evaluation of our advisory business or the integrity of our management. 9

11 Item 10. Other Financial Industry Activities & Affiliations While we may recommend other investment advisors to our clients, we do not receive any compensation for doing so. Please see Item 4 of this Brochure. Item 11. Code of Ethics, Participation or Interest in Client Transactions & Personal Trading Our firm has an established Code of Ethics that applies to all firm personnel and our associates. The core underlying principal in our Code of Ethics is that we are acting as a fiduciary to each of our clients. As such, we are required to act in the client s best interest at all times. It is our responsibility to provide fair and full disclosure of all material facts in our client engagements and comply with all federal and state securities laws. Our firm and its employees must conduct business in an honest, ethical, and fair manner and avoid all circumstances that might negatively affect or appear to affect our duty of loyalty to all clients. Each employee of the firm must acknowledge annually that they have read, understand, and agree to comply with the firm s Code of Ethics. A copy of our Code of Ethics will be provided to any client or prospective client upon request. Our Code of Ethics includes policies regarding insider trades and personal securities transactions that require that all employee transactions be carried out in a way that does not endanger the interest of any client. At the same time, we believe that if investment goals are similar for clients and for employees and associates of our firm, it is logical and even desirable that there be common ownership of some securities. Therefore, in order to prevent conflicts of interest, we have in place a set of procedures (including a pre-clearing procedure) with respect to transactions effected by all firm personnel and their associates for their personal accounts 2. In order to monitor compliance with our personal trading policy, we have a quarterly securities transaction reporting system for all of our employees and their associates. Related persons of our firm may buy or sell securities and other investments that are also recommended to clients. In order to minimize this conflict of interest, our related persons will place client interests ahead of their own interests and adhere to our firm s Code of Ethics, a copy of which is available upon request. Related persons of our firm may buy or sell securities for themselves at or about the same time they buy or sell the same securities for client accounts. In order to mitigate this conflict of interest, our related persons will place client interests ahead of their own interests and adhere to our firm s Code of Ethics, a copy of which is available upon request. Further, our related persons will refrain from buying or selling the same securities within 48 hours prior to buying or selling for our clients. 2 For purposes of our policy, our employees and their associates include the accounts of any employee, their spouse and dependents, and any account where the employee is a trustee or executor, or where the employee otherwise exercises control or has a beneficial interest therein. 10

12 Item 12. Brokerage Practices Selecting a Brokerage Firm We seek to recommend a custodian/broker who will hold your assets and execute transactions on terms that are overall most advantageous when compared to other available providers and their services. We consider a wide range of factors, including, among others, these: Ability to maintain the confidentiality of trading intentions Timeliness of execution Timeliness and accuracy of trade confirmations Liquidity of the securities traded Willingness to commit capital Ability to place trades in difficult market environments Research services provided Ability to provide investment ideas Execution facilitation services provided Record keeping services provided Custody services provided Frequency and correction of trading errors Ability to access a variety of market venues Expertise as it relates to specific securities Financial condition Business reputation Our firm has an arrangement with the Schwab Institutional Division of Charles Schwab & Co., Inc., registered broker/dealers, member SIPC ( Schwab ). Under the arrangement with Schwab we receive services which include, among others, brokerage, custodial, administrative support, record keeping and related services that are intended to support our firm in conducting business and in serving the best interests of our clients but that may benefit our firm. As part of the arrangement described above, Schwab also makes certain research and brokerage services available at no additional cost to our firm. These services include certain research and brokerage services, including research services obtained by Schwab directly from independent research companies, as selected by our firm (within specific parameters). Research products and services provided by Schwab to our firm may include research reports on recommendations or other information about particular companies or industries; economic surveys, data and analyses; financial publications; portfolio evaluation services; financial database software and services; computerized news and pricing services; quotation equipment for use in running software used in investment decision-making; and other products or services that provide lawful and appropriate assistance by Schwab to our firm in the performance of our investment decision-making responsibilities. The aforementioned research and brokerage services are used by our firm to manage accounts for which we have investment discretion. Without this arrangement, our firm might be compelled to purchase the same or similar services at our own expense. As a result of receiving the services discussed above for no additional cost, we may have an incentive to continue to use or expand the use Schwab s services. Our firm examined this conflict of interest when we chose to enter into the relationship with Schwab and we have determined that the 11

13 relationship is in the best interest of our firm s clients and satisfies our client obligations, including our duty to seek best execution. Schwab charges brokerage commissions and transaction fees for effecting certain securities transactions (i.e., transaction fees are charged for certain no-load mutual funds, commissions are charged for individual equity and debt securities transactions). Schwab enables us to obtain many no-load mutual funds without transaction charges and other no-load funds at nominal transaction charges. Schwab s commission rates are generally discounted from customary retail commission rates. However, the commission and transaction fees charged by Schwab may be higher or lower than those charged by other custodians and broker-dealers. Our clients may pay a commission to Schwab that is higher than another qualified broker dealer might charge to effect the same transaction where we determine in good faith that the commission is reasonable in relation to the value of the brokerage and research services received. In seeking best execution, the determinative factor is not the lowest possible cost, but whether the transaction represents the best qualitative execution, taking into consideration the full range of a broker-dealer s services, including the value of research provided, execution capability, commission rates, and responsiveness. Accordingly, although we will seek competitive rates, to the benefit of all clients, we may not necessarily obtain the lowest possible commission rates for specific client account transactions. Soft Dollars Although the investment research products and services that may be obtained by our firm will generally be used to service all of our clients, a brokerage commission paid by a specific client may be used to pay for research that is not used in managing that specific client s account. Client Brokerage Commissions We are required to specifically describe to our clients the types of products or services that we are acquiring and to permit them to evaluate possible conflicts of interest. Our description must be more detailed for products or services that do not qualify for the safe harbor in Section 28(e) of the Securities Exchange Act of 1934, such as those services that do not aid in investment decision-making or trade execution. Merely disclosing that we obtain various research reports and products is not specific enough. In addition to the benefits described above, Schwab also makes available to our firm products and services that help manage and administer clients accounts. These include software and other technology (and related technological training) that provide access to client account data (such as trade confirmations and account statements), facilitate trade execution (and allocation of aggregated trade orders for multiple client accounts), provide research, pricing information and other market data, facilitate payment of our fees from clients accounts, and assist with backoffice training and support functions, recordkeeping and client reporting. Many of these services generally may be used to service all or some substantial number of our accounts, including accounts not maintained at Schwab. While, as a fiduciary, our firm endeavors to act in our clients best interests, adviser s recommendation/requirement that clients maintain their assets in 12

14 accounts at Schwab may be based in part on the benefit to our firm of the availability of some of the foregoing products and services and other arrangements and not solely on the nature, cost, or quality of custody and brokerage services provided by Schwab, which may create a conflict of interest. We would have to obtain the aforementioned services and products for cash if we did not have soft dollars available to pay for them. As a result of receiving such products and services for no cost, we may have an incentive to continue to place client trades through broker-dealers that offer soft dollar arrangements. This interest conflicts with the clients' interest of obtaining the lowest commission rate available. Therefore, we must determine in good faith, based on the best execution policy stated above that such commissions are reasonable in relation to the value of the services provided by such executing broker-dealers. Procedures to Direct Client Transactions in Return for Soft Dollars All soft dollars arrangements must be approved in writing by our Chief Compliance Officer. A brief description of the purpose of the soft dollar arrangement outlining the benefits received by our firm and clients along with any noted concerns about increased costs to our clients and how such concerns were alleviated will be maintained on file. Our Chief Compliance Officer undertakes a review of parties which propose to pay our firm in soft dollars and analyzes a number of criteria. When deciding whether to approve or disapprove of a soft dollar relationship, the following criteria is reviewed: the broker-dealer's business reputation and financial position and our ability to consistently execute orders professionally and on a cost effective basis, provide prompt and accurate execution reports, prepare timely and accurate trade confirmations, deliver securities or cash proceeds promptly and provide meaningful research services that are useful to us in investment decision-making or other desired and appropriate services. Our Chief Compliance Officer also annually reviews all our soft dollar relationships for appropriateness, benefits to our clients, etc. As a fiduciary, we have an obligation to obtain "best execution" of clients' transactions under the circumstances of the particular transaction. Consequently, notwithstanding the safe harbor provided under Section 28(e), no allocation for soft dollar payments shall be made unless best execution of the transaction is reasonably expected to be obtained. Brokerage for Client Referrals Our firm does not receive brokerage for client referrals. Directed Brokerage In certain instances, clients may seek to limit or restrict our discretionary authority in making the determination of the brokers with whom orders for the purchase or sale of securities are placed for execution, and the commission rates at which such securities transactions are affected. Clients may seek to limit our authority in this area by directing that transactions (or some specified percentage of transactions) be executed through specified brokers in return for portfolio evaluation or other services deemed by the client to be of value. Any such client 13

15 direction must be in writing (often through our advisory agreement), and may contain a representation from the client that the arrangement is permissible under its governing laws and documents, if this is relevant. We provide appropriate disclosure in writing to clients who direct trades to particular brokers, that with respect to their directed trades, they will be treated as if they have retained the investment discretion that we otherwise would have in selecting brokers to effect transactions and in negotiating commissions and that such direction may adversely affect our ability to obtain best price and execution. In addition, we will inform you in writing that your trade orders may not be aggregated with other clients orders and that direction of brokerage may hinder best execution. Special Considerations for ERISA Clients A retirement or ERISA plan client may direct all or part of portfolio transactions for its account through a specific broker or dealer in order to obtain goods or services on behalf of the plan. Such direction is permitted provided that the goods and services provided are reasonable expenses of the plan incurred in the ordinary course of its business for which it otherwise would be obligated and empowered to pay. ERISA prohibits directed brokerage arrangements when the goods or services purchased are not for the exclusive benefit of the plan. Consequently, we will request that plan sponsors who direct plan brokerage provide us with a letter documenting that this arrangement will be for the exclusive benefit of the plan. Permissibility of Client-Directed Brokerage Please see above. Aggregate of Purchase or Sale We perform investment management services for various clients. There are occasions on which portfolio transactions may be executed as part of concurrent authorizations to purchase or sell the same security for numerous accounts served by our firm, which involve accounts with similar investment objectives. Although such concurrent authorizations potentially could be either advantageous or disadvantageous to any one or more particular accounts, they are affected only when we believe that to do so will be in the best interest of the effected accounts. When such concurrent authorizations occur, the objective is to allocate the executions in a manner which is deemed equitable to the accounts involved. In any given situation, we attempt to allocate trade executions in the most equitable manner possible, taking into consideration client objectives, current asset allocation and availability of funds using price averaging, proration and consistently nonarbitrary methods of allocation. Item 13. Review of Accounts or Financial Plans We review accounts on at least a quarterly basis for our clients subscribing to our investment management service. The nature of these reviews is to learn whether clients accounts are consistent with their investment objectives, appropriately positioned based on market conditions 14

16 and investment policies, if applicable. Only our advisors or portfolio managers will conduct reviews. Financial planning clients do not receive reviews of their written plans unless they take action to schedule a financial consultation with us. We do not provide ongoing services to financial planning clients, but are willing to meet with such clients upon their request to discuss updates to their plans, changes in their circumstances, etc. We may review client accounts more frequently than described above. Among the factors which may trigger an off-cycle review are major market, or economic events, changes in client circumstance, or as requested by the client, etc. For investment management clients, we provide written reports to clients on a quarterly basis. These reports include the performance of their accounts, their asset allocation and holdings. This will depend upon the engagement terms between the manager and the client. As also mentioned in Item 13 of this Brochure, financial planning clients and those who receive hourly consultation services do not receive any reports unless they separately engage us for a post-financial plan meeting to update to their initial written financial plan, etc. Schwab Institutional: Item 14. Client Referrals & Other Compensation Our firm may recommend that clients establish brokerage accounts with Schwab to maintain custody of clients assets and to effect trades for their accounts. Our firm is independently owned and operated and not affiliated with Schwab. Our firm may also recommend that clients establish accounts with firms other than Schwab. Our firm places trades for its clients' accounts subject to its duty to seek best execution and its other fiduciary duties. Our firm may use broker-dealers other than Schwab to execute trades for client accounts maintained at Schwab, but this practice may result in additional costs to clients so that we are more likely to place trades through Schwab rather than other broker-dealers. Schwab's execution quality may be different than other broker-dealers. For our client accounts maintained in its custody, Schwab generally does not charge separately for custody services but is compensated by account holders through commissions or other transaction-related or asset-based fees for securities trades that are executed through Schwab or that settle into Schwab accounts. Some of the products, services and other benefits provided by Schwab benefit us and may not benefit our firm's client accounts. Our recommendation/requirement that a client place assets in Schwab's custody may be based in part on benefits Schwab provides to us, and not solely on the nature, cost or quality of custody and execution services provided by Schwab. Schwab also makes available to our firm other products and services that benefit us but may not benefit clients accounts. These benefits may include national, regional or specific to our firm, 15

17 educational events organized and/or sponsored by Schwab. Other potential benefits may include occasional business entertainment of personnel of our firm by Schwab personnel, including meals, invitations to sporting events, including golf tournaments, and other forms of entertainment, some of which may accompany educational opportunities. Other of these products and services assist us in managing and administering clients accounts. These include software and other technology (and related technological training) that provide access to client account data (such as trade confirmations and account statements), facilitate trade execution (and allocation of aggregated trade orders for multiple client accounts), provide research, pricing information and other market data, facilitate payment of our fees from its clients accounts, and assist with back-office training and support functions, recordkeeping and client reporting. Many of these services generally may be used to service all or some substantial number of our firm s accounts, including accounts not maintained at Schwab Institutional. Schwab Institutional also makes available to us other services intended to help our firm manage and further develop its business enterprise. These services may include professional compliance, legal and business consulting, publications and conferences on practice management, information technology, business succession, regulatory compliance, employee benefits providers, human capital consultants, insurance and marketing information. In addition, Schwab may make available, arrange and/or pay vendors for these types of services rendered to our firm by independent third parties. Schwab Institutional may discount or waive fees it would otherwise charge for some of these services or pay all or a part of the fees of a third-party providing these services to us. While, as a fiduciary, our firm endeavors to act in its clients best interests, our recommendation/requirement that clients maintain their assets in accounts at Schwab may be based in part on the benefit to our firm of the availability of some of the foregoing products and services and other arrangements and not solely on the nature, cost or quality of custody and brokerage services provided by Schwab, which creates a conflict of interest. But for soft dollar arrangements, we would have to obtain the aforementioned services and products for cash. As a result of receiving such products and services for no cost, we may have an incentive to continue to place client trades through broker-dealers that offer soft dollar arrangements. This interest conflicts with the clients' interest of obtaining the lowest commission rate available. Therefore, our firm must determine in good faith, based on the best execution policy stated above that such commissions are reasonable in relation to the value of the services provided by such executing broker-dealers. From time-to-time our firm may make an error in submitting a trade order on a client s behalf. When this occurs, we may place a correcting trade with the broker-dealer which has custody of the client s account. If an investment gain results from the correcting trade, the gain will remain in the client s account unless the same error involved other client account(s) that should have received the gain, it is not permissible for the client to retain the gain, or our firm confers with the client and the client decides to forego the gain (e.g., due to tax reasons). If the gain does not remain in the client s account and Schwab is the custodian, Schwab will donate the amount of any gain $100 and over to charity. If a loss occurs greater than $100, we will pay for the loss. Schwab will maintain the loss or gain (if such gain is not retained in the client s account) if it is under $100 to minimize and offset its administrative time and expense. Generally, if related trade errors result in both gains and losses in the client s account, they may be netted. 16

18 Referral Fees Except as noted below, we do not pay referral fees to anyone who is not an employee for the referral of their clients to our firm. We do continue to pay Schwab a referral fee relating to several clients that transferred their business from a prior firm who was a member of the Schwab Advisor Network. Item 15. Custody We do not have custody of client assets. State securities bureaus generally take the position that any arrangement under which a registered investment adviser is authorized or permitted to withdraw client funds or securities maintained with a custodian upon the adviser s instruction to the custodian is deemed to have custody of client funds and securities. Since our clients give us authorization to withdraw our fees from their accounts, we have adopted the following safeguarding procedures: (i) Our clients must provide us with written authorization permitting direct payment to us of our advisory fees from their account(s) maintained by a custodian who is independent of our firm; (ii) We must send a statement to our clients showing the amount of our fee, the value of your assets upon which our fee was based, and the specific manner in which our fee was calculated; (iii) We must disclose to you that it is your responsibility to verify the accuracy of our fee calculation, and that the custodian will not determine whether the fee is properly calculated; and (iv) Your account custodian must send you a statement, at least quarterly, showing all disbursements from your account, including advisory fees. Our custodians directly send our clients regular, independent account statements showing account holdings and balances, transaction history, and any fee transactions affecting their account(s). We encourage our clients to raise any questions with us about the custody, safety or security of their assets. Item 16. Investment Discretion As a condition to becoming an investment management client of our firm, our clients are required to sign a discretionary investment advisory agreement regarding the management of their account(s). Our clients may place reasonable limitations on our authority so long as this arrangement is approved by us and is documented in the advisory agreement. 17

19 Item 17. Voting Client Securities We do not vote proxies or accept authority to vote proxies for client securities. Clients will receive proxies or other solicitations directly from their custodian or a transfer agent. Therefore, clients are responsible for: (1) voting all proxies solicited by issuers of securities beneficially owned by the client, and (2) making all elections relative to any mergers, acquisitions, tender offers, bankruptcy proceedings or other type events pertaining to the client s investment assets. Clients may contact us to discuss questions they may have about particular proxy votes or other solicitations. Inclusion of Balance Sheet Item 18. Financial Information We do not require nor do we solicit prepayment of more than $500 in fees per client six months or more in advance. Therefore, we have not included a balance sheet for our most recent fiscal year. Disclosure of Financial Information We have nothing to disclose in this regard. Bankruptcy Petition We have nothing to disclose in this regard. Item 19. Requirements for State-Registered Advisers Principal Executive Officers and Management Persons D. Austin Lewis Born 1964 Business Experience Lewis Wealth Management, LLC, 01/ /2010 (SEC registered investment adviser) 07/2010 to Present (Colorado registered investment adviser), President, 26 W. Dry Creek Circle, Suite 510, Littleton, CO 80120, Arapahoe County, Lewis Wealth Management, LLC. Wagner Wealth Management, LLC, 3/ /2010, Advisor, 210 University Blvd., Suite 400, Denver, CO 80206, Denver County. Wagner is an SEC registered investment adviser. Graphic Packaging Corporation, 3/ /2003, Counsel, 4455 Table Mountain Drive, Golden, CO 80403, Jefferson County, not an investment related business. Qwest Communications, 11/2000 3/2002, 05/2004 3/2006, Senior Attorney, 1801 California 18

20 Street, Denver, Colorado, Denver County, not an investment related business. Craigie, McCarthy and Clow, 3/1995 9/2000, Associate Attorney, 540 Pacific Avenue, San Francisco, California 94133, not an investment related business. Gordon & Rees, LLP, 9/1992 3/1995, Associate Attorney, 275 Battery Street, San Francisco, California, 94111, not an investment related business. Educational Background Marquette University Law School, 1992, J.D. San Francisco State University, 1989, M.B.A. (with an emphasis in finance) University of Colorado, Leeds School of Business, 1986, B.S. Business Administration (with an emphasis in finance) Licenses & Professional Designations Series 65 (04/2006) California Bar (11/1992), Colorado Bar (12/2000). Certified Financial Planner (03/2009) Outside Business Activity Please see Item 10 of this Brochure. Performance Based Fees We do not charge performance based fees. Disciplinary Information We have nothing to disclose in this regard. Arrangement with Issuers of Securities We have nothing to disclose in this regard. 19

21 Item 1. Cover Page for Part 2B of Form ADV: BROCHURE SUPPLEMENT MARCH 2014 MR. D. AUSTIN LEWIS LEWIS WEALTH MANAGEMENT, LLC 26 WEST DRY CREEK CIRCLE LITTLETON, CO FIRM CONTACT: D. AUSTIN LEWIS CHIEF COMPLIANCE OFFICER (855) FIRM WEBSITE ADDRESS: This brochure supplement provides information about Mr. Lewis that supplements our brochure. You should have received a copy of that brochure. Please contact Mr. Lewis if you did not receive our firm s brochure or if you have any questions about the contents of this supplement. Additional information about Mr. Lewis is available on the SEC s website at or our website: CRD #152800

22 Item 2. Educational Background & Business Experience. D. Austin Lewis Born 1964 Business Experience Lewis Wealth Management, LLC, 01/ /2010 (SEC registered investment adviser) 07/2010 to Present (Colorado registered investment adviser), President, 26 W. Dry Creek Circle, Suite 510, Littleton, CO 80120, Arapahoe County, Lewis Wealth Management, LLC. Wagner Wealth Management, LLC, 3/ /2010, Advisor, 210 University Blvd., Suite 400, Denver, CO 80206, Denver County. Wagner is an SEC registered investment adviser. Graphic Packaging Corporation, 3/ /2003, Counsel, 4455 Table Mountain Drive, Golden, CO 80403, Jefferson County, not an investment related business. Qwest Communications, 11/2000 3/2002, 05/2004 3/2006, Senior Attorney, 1801 California Street, Denver, Colorado, Denver County, not an investment related business. Craigie, McCarthy and Clow, 3/1995 9/2000, Associate Attorney, 540 Pacific Avenue, San Francisco, California 94133, not an investment related business. Gordon & Rees, LLP, 9/1992 3/1995, Associate Attorney, 275 Battery Street, San Francisco, California, 94111, not an investment related business. Educational Background Marquette University Law School, 1992, J.D. San Francisco State University, 1989, M.B.A. (with an emphasis in finance) University of Colorado, Leeds School of Business, 1986, B.S. Business Administration (with an emphasis in finance Licenses and Professional Designations Series 65 (04/2006) California Bar (11/1992), Colorado Bar (12/2000). Certified Financial Planner (03/2009) CFP - Certified Financial Planner : The CERTIFIED FINANCIAL PLANNER, CFP and federally registered CFP (with flame design) marks (collectively, the CFP marks ) are professional certification marks granted in the United States by Certified Financial Planner Board of Standards, Inc. ( CFP Board ). 2

23 The CFP certification is a voluntary certification; no federal or state law or regulation requires financial planners to hold CFP certification. It is recognized in the United States and a number of other countries for its (1) high standard of professional education; (2) stringent code of conduct and standards of practice; and (3) ethical requirements that govern professional engagements with clients. Currently, more than 62,000 individuals have obtained CFP certification in the United States. To attain the right to use the CFP marks, an individual must satisfactorily fulfill the following requirements: Education Complete an advanced college-level course of study addressing the financial planning subject areas that CFP Board s studies have determined as necessary for the competent and professional delivery of financial planning services, and attain a Bachelor s Degree from a regionally accredited United States college or university (or its equivalent from a foreign university). CFP Board s financial planning subject areas include insurance planning and risk management, employee benefits planning, investment planning, income tax planning, retirement planning, and estate planning; Examination Pass the comprehensive CFP Certification Examination. The examination, administered in 10 hours over a two-day period, includes case studies and client scenarios designed to test one s ability to correctly diagnose financial planning issues and apply one s knowledge of financial planning to real world circumstances; Experience Complete at least three years of full-time financial planning-related experience (or the equivalent, measured as 2,000 hours per year); and Ethics Agree to be bound by CFP Board s Standards of Professional Conduct, a set of documents outlining the ethical and practice standards for CFP professionals. Individuals who become certified must complete the following ongoing education and ethics requirements in order to maintain the right to continue to use the CFP marks: Continuing Education Complete 30 hours of continuing education hours every two years, including two hours on the Code of Ethics and other parts of the Standards of Professional Conduct, to maintain competence and keep up with developments in the financial planning field; and Ethics Renew an agreement to be bound by the Standards of Professional Conduct. The Standards prominently require that CFP professionals provide financial planning services at a fiduciary standard of care. This means CFP professionals must provide financial planning services in the best interests of their clients. CFP professionals who fail to comply with the above standards and requirements may be subject to CFP Board s enforcement process, which could result in suspension or permanent revocation of their CFP certification. 3