Cobalt Financial Partners LLC

Cobalt Financial Partners LLC Firm Brochure - Form ADV Part 2A This brochure provides information about the qualifications and business practices of Cobalt Financial Partners LLC. If you have any questions about the contents of this brochure, please contact us at (410) 309-4200 or by email at: chris.shematek@lpl.com. 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 Cobalt Financial Partners LLC is also available on the SEC’s website at www.adviserinfo.sec.gov. Cobalt Financial Partners LLC’s CRD number is: 168710. 613 Sideling Court Sykesville, Maryland, 21784 (410) 309-4200 chris.shematek@lpl.com Registration does not imply a certain level of skill or training. Version Date: 09/17/2026 i  Item 2: Material Changes The material changes in this brochure from the last annual updating amendment of Cobalt Financial Partners LLC on 01/28/2026 are described below. Material changes relate to Cobalt Financial Partners LLC’s policies, practices or conflicts of interest. • Cobalt Financial Partners LLC has successfully transitioned to registration with the United States Securities and Exchange Commission from its prior registration at the state level. ii  Item 3: Table of Contents Item 1: Cover Page Item 2: Material Changes ................................................................................................................................................ ii Item 3: Table of Contents ................................................................................................................................................ iii Item 4: Advisory Business ................................................................................................................................................ 5 Item 5: Fees and Compensation ....................................................................................................................................... 7 Item 6: Performance-Based Fees and Side-By-Side Management ................................................................................ 9 Item 7: Types of Clients ..................................................................................................................................................... 9 Item 8: Methods of Analysis, Investment Strategies, and Risk of Investment Loss ...................................... 9 Item 9: Disciplinary Information.................................................................................................................................... 12 Item 10: Other Financial Industry Activities and Affiliations .................................................................................... 12 Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading .............................. 13 Item 12: Brokerage Practices ........................................................................................................................................... 14 Item 13: Reviews of Accounts......................................................................................................................................... 15 Item 14: Client Referrals and Other Compensation ..................................................................................................... 16 Item 15: Custody .............................................................................................................................................................. 17 Item 16: Investment Discretion ...................................................................................................................................... 17 Item 17: Voting Client Securities (Proxy Voting) ......................................................................................................... 17 Item 18: Financial Information ....................................................................................................................................... 18 iii  Item 4: Advisory Business A. Description of the Advisory Firm Cobalt Financial Partners LLC (hereinafter “CFP”) is a Limited Liability Company organized in the State of Maryland. The firm was formed in October 2005, and the principal owner is Christopher Paul Shematek. B. Types of Advisory Services CFP offers the following services to advisory clients: Portfolio Management Services CFP offers ongoing portfolio management services based on the individual goals, objectives, time horizon, and risk tolerance of each client. CFP creates an Investment Policy Statement for each client, which outlines the client’s current situation (income, tax levels, and risk tolerance levels) and then constructs a plan to aid in the selection of a portfolio that matches each client’s specific situation. Portfolio management services focus on asset allocation, and include, but are not limited to, the following: • • • Investment strategy • • Asset allocation • Risk tolerance Personal investment policy Asset selection Regular portfolio monitoring CFP evaluates the current investments of each client with respect to their risk tolerance levels and time horizon. Risk tolerance levels are documented in the Investment Policy Statement, which is given to each client. CFP seeks to provide that investment decisions are made in accordance with the fiduciary duties owed to its accounts and without consideration of CFP’s economic, investment or other financial interests. To meet its fiduciary obligations, CFP attempts to avoid, among other things, investment or trading practices that systematically advantage or disadvantage certain client portfolios, and, accordingly, CFP’s policy is to seek fair and equitable allocation of investment opportunities/transactions among its clients to avoid favoring one client over another over time. It is CFP’s policy to allocate investment opportunities and transactions it identifies as being appropriate and prudent, including initial public offerings (“IPOs”) and other investment opportunities that might have a limited supply, among its clients on a fair and equitable basis over time. 5  Financial Planning Financial plans and financial planning may include, but are not limited to: investment planning; life insurance; tax concerns; retirement planning; college planning; and debt/credit planning. Services Limited to Specific Types of Investments CFP generally limits its investment advice to mutual funds, equities, fixed income securities, ETFs (including ETFs in the gold and precious metal sectors), real estate funds (including REITs), non-U.S. securities, commodities, and insurance products including annuities and private placements, although CFP primarily recommends mutual funds and ETFs to a majority of its clients. CFP may use other securities as well to help diversify a portfolio when applicable. C. Client Tailored Services and Client Imposed Restrictions CFP will tailor a program for each individual client focused on asset allocation and rebalancing based on market performance and client risk tolerance. This will include an interview session to get to know the client’s specific needs and requirements as well as a plan that will be executed by CFP on behalf of the client. CFP may use “model portfolios” together with a specific set of recommendations for each client based on their personal restrictions, needs, and targets. Clients may impose restrictions in investing in certain securities or types of securities in accordance with their values or beliefs. However, if the restrictions prevent CFP from properly servicing the client account, or if the restrictions would require CFP to deviate from its standard suite of services, CFP reserves the right to end the relationship. D. Wrap Fee Programs A wrap fee program is an investment program wherein the investor pays one stated fee that includes management fees, transaction costs, fund expenses, and any other administrative fees. CFP does not participate in any wrap fee programs. E. Assets Under Management CFP has the following assets under management: Discretionary Amounts: Non-discretionary Amounts: Date Calculated: $0.00 $108,069,000 May 2026 6  Item 5: Fees and Compensation A. Fee Schedule Portfolio Management Services Fees Total Assets Under Management Annual Fee Up to $1,000,000 1.50% Above $1,000,000 1.25% These fees are generally negotiable and the final fee schedule is attached as Exhibit II of the Investment Advisory Contract. CFP charges its portfolio management fees in advance. Financial Planning Fees Fixed Fees The rate for creating client financial plans is up to $2500. The fees are negotiable, payable in arrears, and the final fee schedule will be attached as Exhibit II of the Financial Planning Agreement. Hourly Fees The hourly fee for these services is up to $250. The fees are negotiable, payable in arrears, and the final fee schedule will be attached as Exhibit II of the Financial Planning Agreement. Termination of Agreement Clients may terminate the agreement without penalty, for full refund of CFP’s fees, within five business days of signing the Investment Advisory Contract. Thereafter, clients may terminate the Investment Advisory Contract generally with thirty days’ written notice 7  B. Payment of Fees Payment of Portfolio Management Fees Portfolio management fees are withdrawn directly from the client’s accounts with client’s written authorization or may be invoiced and billed directly to the client; clients may select the method in which they are billed. Fees are paid quarterly, in advance. LPL will deduct fees directly from client accounts using the safeguards below: 1. LPL has written authorization from the client to deduct advisory fees from the account held with a qualified custodian. 2. The client has executed an agreement with the custodian directly regarding the fee. LPL does not have authorization to increase without client and custodian consent. An increase in fee must be approved by the client and communicated by the client directly to the custodian. 3. The custodian will send statements, at least quarterly, to the client showing all disbursements for the custodian account, including the amount of the advisory fees. Payment of Financial Planning Fees Fixed or Hourly Financial Planning fees are paid via check. C. Client Responsibility For Third Party Fees Clients are responsible for the payment of all third party fees (i.e. custodian fees, brokerage fees, mutual fund fees, transaction fees, etc.). Those fees are separate and distinct from the fees and expenses charged by CFP. Please see Item 12 of this brochure regarding broker/custodian. D. Prepayment of Fees CFP collects its fees in arrears and in advance. Refunds for fees paid in advance will be returned to the client promptly by the custodian either via check or return deposit back into the client’s account All asset-based fees are paid in advance; the fee refunded will be the balance of the fees collected in advance minus the daily rate* times the number of days in the billing period up to and including the day of termination. (*The daily rate is calculated by dividing the annual asset-based fee by 365.) Financial planning fees are payable in arrears. 8  E. Outside Compensation For the Sale of Securities to Clients Christopher Paul Shematek in his outside business activities (see Item 10 below) is licensed to accept compensation for the sale of investment products to CFP clients. This presents a conflict of interest and gives the supervised person an incentive to recommend products based on the compensation received rather than on the client’s needs. When recommending the sale of securities or investment products for which the supervised persons receives compensation, CFP will document the conflict of interest in the client file and inform the client of the conflict of interest. Clients always have the right to decide whether to purchase CFP-recommended products and, if purchasing, have the right to purchase those products through other brokers or agents that are not affiliated with CFP. Commissions are not CFP’s primary source of compensation for advisory services. Advisory fees that are charged to clients are not reduced to offset the commissions or markups on securities or investment products recommended to clients. Item 6: Performance-Based Fees and Side-By-Side Management CFP does not accept performance-based fees or other fees based on a share of capital gains on or capital appreciation of the assets of a client. Item 7: Types of Clients CFP generally provides advisory services to the following types of clients: ❖ Individuals ❖ High-Net-Worth Individuals ❖ Corporations or Business Entities Minimum Account Size There is no account minimum. Item 8: Methods of Analysis, Investment Strategies, and Risk of Investment Loss A. Methods of Analysis and Investment Strategies Methods of Analysis CFP’s methods of analysis include modern portfolio theory. Modern portfolio theory is a theory of investment which attempts to maximize portfolio expected return for a given amount of portfolio risk, or equivalently minimize risk for a 9  given level of expected return, by carefully choosing the proportions of various assets. Investment Strategies CFP uses long term trading. Investing in securities involves a risk of loss that you, as a client, should be prepared to bear. B. Material Risks Involved Methods of Analysis Modern Portfolio Theory assumes that investors are risk adverse, meaning that given two portfolios that offer the same expected return, investors will prefer the less risky one. Thus, an investor will take on increased risk only if compensated by higher expected returns. Conversely, an investor who wants higher expected returns must accept more risk. The exact trade-off will be the same for all investors, but different investors will evaluate the trade-off differently based on individual risk aversion characteristics. The implication is that a rational investor will not invest in a portfolio if a second portfolio exists with a more favorable risk-expected return profile – i.e., if for that level of risk an alternative portfolio exists which has better expected returns. Investment Strategies Long term trading is designed to capture market rates of both return and risk. Due to its nature, the long-term investment strategy can expose clients to various types of risk that will typically surface at various intervals during the time the client owns the investments. These risks include but are not limited to inflation (purchasing power) risk, interest rate risk, economic risk, market risk, and political/regulatory risk. Investing in securities involves a risk of loss that you, as a client, should be prepared to bear. C. Risks of Specific Securities Utilized Clients should be aware that there is a material risk of loss using any investment strategy. The investment types listed below (leaving aside Treasury Inflation Protected/Inflation Linked Bonds) are not guaranteed or insured by the FDIC or any other government agency. CFP primarily recommends mutual funds and ETFs. Mutual Funds: Investing in mutual funds carries the risk of capital loss and thus you may lose money investing in mutual funds. All mutual funds have costs that lower investment returns. They can be of bond “fixed income” nature (lower risk) or stock “equity” nature (mentioned below). Exchange Traded Funds (ETFs): Investing in ETFs carries the risk of capital loss (sometimes up to a 100% loss in the case of a stock holding bankruptcy). The price of 10  Precious Metal ETFs (e.g., Gold, Silver, or Palladium Bullion backed “electronic shares” not physical metal) may be negatively impacted by several factors, among them (1) large sales by the official sector which own a significant portion of aggregate world holdings in gold and other precious metals, (2) a significant increase in hedging activities by producers of gold or other precious metals, (3) a significant change in the attitude of speculators and investors. Equity investment generally refers to buying shares of stocks in return for receiving a future payment of dividends and capital gains if the value of the stock increases. The value of equity securities may fluctuate in response to specific situations for each company, industry market conditions and general economic environments. Fixed income investments generally pay a return on a fixed schedule, though the amount of the payments can vary and include corporate and government debt securities, leveraged loans, high yield, and investment grade debt and structured products, such as mortgage and other asset-backed securities, although individual bonds may be the best known type of fixed income security. In general the fixed income market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices longer-term usually fall, and vice versa. This effect is usually more pronounced for securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk and credit and default risks for both issuers and counterparties. The risk of default on treasury inflation protected/inflation linked bonds is dependent upon the U.S. Treasury defaulting (extremely unlikely); however, they carry a potential risk of losing share price value, albeit rather minimal. Risks of investing in foreign fixed income securities also include the general risk of non-U.S. investing described below. Real Estate funds (including REITs) face several kinds of risk that are inherent in the real estate sector, which historically has experienced significant fluctuations and cycles in performance. Revenues and cash flows may be adversely affected by: changes in local real estate market conditions due to changes in national or local economic conditions or changes in local property market characteristics; competition from other properties offering the same or similar services; changes in interest rates and in the state of the debt and equity credit markets; the ongoing need for capital improvements; changes in real estate tax rates and other operating expenses; adverse changes in governmental rules and fiscal policies; adverse changes in zoning laws; the impact of present or future environmental legislation and compliance with environmental laws. Commodities are tangible assets used to manufacture and produce goods or services. Commodity prices are affected by different risk factors, such as disease, storage capacity, supply, demand, delivery constraints and weather. Because of those risk factors, even a well-diversified investment in commodities can be uncertain. Non-U.S. securities present certain risks such as currency fluctuation, political and economic change, social unrest, changes in government regulation, differences in accounting and the lesser degree of accurate public information available. 11  Past performance is not indicative of future results. Investing in securities involves a risk of loss that you, as a client, should be prepared to bear. Item 9: Disciplinary Information A. Criminal or Civil Actions There are no criminal or civil actions to report. B. Administrative Proceedings There are no administrative proceedings to report. C. Self-regulatory Organization (SRO) Proceedings There are no self-regulatory organization proceedings to report. Item 10: Other Financial Industry Activities and Affiliations A. Registration as a Broker/Dealer or Broker/Dealer Representative Christopher Paul Shematek is a registered representative of LPL Financial LLC. B. Registration as a Futures Commission Merchant, Commodity Pool Operator, or a Commodity Trading Advisor Neither CFP nor its representatives are registered as or have pending applications to become either a Futures Commission Merchant, Commodity Pool Operator, or Commodity Trading Advisor or an associated person of the foregoing entities. C. Registration Relationships Material to this Advisory Business and Possible Conflicts of Interests Christopher Paul Shematek is a registered representative of LPL Financial LLC, and a licensed insurance agent. From time to time, he will offer clients advice or products from those activities. Clients should be aware that these services pay a commission or other compensation and involve a conflict of interest, as commissionable products conflict with the fiduciary duties of a registered investment adviser. CFP always acts in the best interest of the client; including the sale of commissionable products to advisory clients. Clients are in no way required to implement the plan through any representative of CFP in such individual’s outside capacity. 12  Christopher Paul Shematek is a teacher of Business and Economics Classes at a high school located in Ellicott City, MD. Christopher Shematek has taken out a loan with LPL. The amount of the loan, paid to Christopher Shematek on June 24, 2024, represents a substantial payment. Forgiveness of the loan, in whole or in part, is conditioned on Christopher Shematek remaining affiliated with LPL. As such, Christopher Shematek has a financial incentive to recommend that its clients maintain their accounts with LPL Financial for the duration of the loan. D. Selection of Other Advisers or Managers and How This Adviser is Compensated for Those Selections CFP does not utilize nor select third-party investment advisers. All assets are managed by CFP management. Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading A. Code of Ethics CFP has a written Code of Ethics that covers the following areas: Prohibited Purchases and Sales, Insider Trading, Personal Securities Transactions, Exempted Transactions, Prohibited Activities, Conflicts of Interest, Gifts and Entertainment, Confidentiality, Service on a Board of Directors, Compliance Procedures, Compliance with Laws and Regulations, Procedures and Reporting, Certification of Compliance, Reporting Violations, Compliance Officer Duties, Training and Education, Recordkeeping, Annual Review, and Sanctions. Our Code of Ethics is available free upon request to any client or prospective client. B. Recommendations Involving Material Financial Interests CFP and its associated persons may have material financial interests in issuers of securities that CFP may recommend for purchase or sale by clients. Conflict of interest situations that arise in connection with the management of the assets of Clients will be handled on a case-by-case basis. Client approval will be sought in connection with approvals required under the Advisers Act, including Section 206(3) thereunder, or otherwise and, if granted, such approval will be binding. If a principal transaction or agency cross transaction arises, CFP will execute such transaction with the consent of the applicable client or as otherwise thereof. Principal permitted by the Advisers Act, including Section 206(3) 13  transactions are generally defined as transactions where an adviser, acting as principal for its own account or the account of a related person, buys from or sells any security to any advisory client. C. Investing Personal Money in the Same Securities as Clients From time to time, representatives of CFP may buy or sell securities for themselves that they also recommend to clients. This may provide an opportunity for representatives of CFP to buy or sell the same securities before or after recommending the same securities to clients resulting in representatives profiting off the recommendations they provide to clients. Such transactions may create a conflict of interest. CFP will always document any transactions that could be construed as conflicts of interest and will never engage in trading that operates to the client’s disadvantage when similar securities are being bought or sold. D. Trading Securities At/Around the Same Time as Clients’ Securities From time to time, representatives of CFP may buy or sell securities for themselves at or around the same time as clients. This may provide an opportunity for representatives of CFP to buy or sell securities before or after recommending securities to clients resulting in representatives profiting off the recommendations they provide to clients. Such transactions may create a conflict of interest; however, CFP will never engage in trading that operates to the client’s disadvantage when similar securities are being bought or sold. Item 12: Brokerage Practices A. Factors Used to Select Custodians and/or Broker/Dealers In connection with Christopher Paul Shematek’s role as a registered representative of LPL Financial LLC, LPL Financial imposes restrictions on CFP’s use of other broker-dealers. Accordingly, LPL Financial LLC (6413) will be CFP’s chosen broker-dealer/custodian. CFP will never charge a premium or commission on transactions beyond the actual cost imposed by the custodian; however, the fees charged by LPL Financial LLC (6413) may exceed those charged by other broker-dealer firms (e.g., online discount brokers). 1. Research and Other Soft-Dollar Benefits CFP receives research, products, or other services from its broker/dealer or another third-party in connection with client securities transactions (“soft dollar benefits”). CFP may enter into soft-dollar arrangements within (but not outside of) the safe harbor contained in Section 28(e) of the Securities Exchange Act of 1934, as amended. There can be no assurance that any particular client will benefit from soft dollar research, whether or not the client’s transactions paid for it, and CFP does not seek to allocate benefits to 14  client accounts proportionate to any soft dollar credits generated by the accounts. Clients should be aware that CFP may have an incentive to select or recommend a broker-dealer based on its interest in receiving the research or other products or services, rather than on clients’ interest in receiving most favorable execution. Nevertheless, CFP always acts in the best interest of the client. Clients should be aware that CFP’s acceptance of soft dollar benefits may result in higher commissions charged to the client. 2. Brokerage for Client Referrals CFP receives no referrals from a broker-dealer or third party in exchange for using that broker-dealer or third party. 3. Clients Directing Which Broker/Dealer/Custodian to Use CFP may permit Clients to direct it to execute transactions through a specified broker-dealer. Clients must refer to their advisory agreements for a complete understanding of how they may be permitted to direct brokerage. If a client directs brokerage, the client will be required to acknowledge in writing that the Client’s direction with respect to the use of brokers supersedes any authority granted to CFP to select brokers; this direction may result in higher commissions, which may result in a disparity between free and directed accounts; the client may be unable to participate in block trades (unless CFP is able to engage in “step outs”); and trades for the client and other directed accounts may be executed after trades for free accounts, which may result in less favorable prices, particularly for illiquid securities or during volatile market conditions. Not all investment advisers allow their clients to direct brokerage. B. Aggregating (Block) Trading for Multiple Client Accounts If CFP buys or sells the same securities on behalf of more than one client, it might, but would be under no obligation to, aggregate or bunch, to the extent permitted by applicable law and regulations, the securities to be purchased or sold for multiple Clients in order to seek more favorable prices, lower brokerage commissions or more efficient execution. In such case, CFP would place an aggregate order with the broker on behalf of all such clients in order to ensure fairness for all clients; provided, however, that trades would be reviewed periodically to ensure that accounts are not systematically disadvantaged by this policy. CFP would determine the appropriate number of shares to place with brokers and will select the appropriate brokers consistent with the Adviser’s duty to seek best execution, except for those accounts with specific brokerage direction (if any). Item 13: Reviews of Accounts 15  A. Frequency and Nature of Periodic Reviews and Who Makes Those Reviews All client portfolio management accounts are reviewed at least annually only by Christopher Paul Shematek, Principal with regard to clients’ respective investment policies and risk tolerance levels. LPL Financial will send statements quarterly if not more frequently depending on activity. All financial planning accounts are reviewed upon financial plan creation and plan delivery by Christopher Paul Shematek, Principal. There is only one level of review and that is the total review conducted to create the financial plan. B. Factors That Will Trigger a Non-Periodic Review of Client Accounts Portfolio management reviews may be triggered by material market, economic or political events, or by changes in client's financial situations (such as retirement, termination of employment, physical move, or inheritance). As there will be no ongoing Financial Planning reviews, CFP’s services will generally conclude upon delivery of the financial plan. C. Content and Frequency of Regular Reports Provided to Clients Each client will receive at least annually a written report that details the client’s account including assets held and asset value, which report will come from the custodian. Each client will receive the financial plan upon completion. Item 14: Client Referrals and Other Compensation A. Economic Benefits Provided by Third Parties for Advice Rendered to Clients (Includes Sales Awards or Other Prizes) CFP receives support services and/or products from LPL Financial, many of which assist the CFP to better monitor and service program accounts maintained at LPL Financial; however, some of the services and products benefit CFP and not client accounts. These support services and/or products may be received without cost, at a discount, and/or at a negotiated rate, and may include the following: investment-related research • • pricing information and market data • • • software and other technology that provide access to client account data compliance and/or practice management-related publications consulting services 16  • attendance at conferences, meetings, and other educational and/or social events computer hardware and/or software • marketing support • • other products and services used by CFP in furtherance of its investment advisory business operations LPL Financial may provide these services and products directly, or may arrange for third party vendors to provide the services or products to Advisor. In the case of third-party vendors, LPL Financial may pay for some or all of the third party’s fees. These support services are provided to CFP based on the overall relationship between CFP and LPL Financial. It is not the result of soft dollar arrangements or any other express arrangements with LPL Financial that involves the execution of client transactions as a condition to the receipt of services. CFP will continue to receive the services regardless of the volume of client transactions executed with LPL Financial. Clients do not pay more for services as a result of this arrangement. There is no corresponding commitment made by CFP to LPL or any other entity to invest any specific amount or percentage of client assets in any specific securities as a result of the arrangement. However, because Advisor receives these benefits from LPL Financial, there is a potential conflict of interest. The receipt of these products and services presents a financial incentive for Advisor to recommend that its clients use LPL Financial’s custodial platform rather than another custodian’s platform. B. Compensation to Non – Advisory Personnel for Client Referrals CFP does not directly or indirectly compensate any person who is not advisory personnel for client referrals. Item 15: Custody CFP does not deduct the client fees. LPL with client written authority, has limited custody of client’s assets through direct fee deduction of CFP’s fees only. If the client chooses to be billed directly by LPL Financial or the client’s chosen custodian, LPL would have constructive custody over that account and must have written authorization from the client to do so. Clients will receive all account statements and billing invoices that are required in each jurisdiction, and they should carefully review those statements for accuracy. Item 16: Investment Discretion CFP does not have discretion over client accounts at any time. Item 17: Voting Client Securities (Proxy Voting) 17  CFP will not ask for, nor accept voting authority for client securities. Clients will receive proxies directly from the issuer of the security or the custodian. Clients should direct all proxy questions to the issuer of the security. Item 18: Financial Information A. Balance Sheet CFP neither requires nor solicits prepayment of more than $1,200 in fees per client, six months or more in advance and therefore does not need to include a balance sheet with this brochure. B. Financial Conditions Reasonably Likely to Impair Ability to Meet Contractual Commitments to Clients Neither CFP nor its management has any financial condition that is likely to reasonably impair CFP’s ability to meet contractual commitments to clients. C. Bankruptcy Petitions in Previous Ten Years CFP has not been the subject of a bankruptcy petition in the last ten years. 18