EMERALD ADVISORS, LLC

Disclosure Brochure DISCLOSURE February 10, 2025 BROCHURE Emerald Advisors, LLC a Registered Investment Adviser 3055 112th Avenue NE, Suite 206 Bellevue, Washington 98004 425.458.3853 www.emeraldadv.com March 31, 2025 This brochure provides information about the qualifications and business practices of Emerald Advisors, LLC (hereinafter “Emerald Advisors” or the “Firm”). If you have any questions about the contents of this brochure, please contact the Firm at the telephone number listed above. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission (SEC) or by any state securities authority. Additional information about the Firm is available on the SEC’s website at www.adviserinfo.sec.gov. The Firm is a registered investment adviser. Registration does not imply any level of skill or training. Emerald Advisors, LLC, a Registered Investment Adviser 3055 112th Avenue, Suite 206, Bellevue, Washington 98004 425.458.3853 www.emeraldadv.com  DISCLOSURE BROCHURE Item 2. Material Changes Material changes relate to Emerald Advisors’ policies, practices or conflicts of interest. No material changes have occurred since the last annual updating amendment, dated March 14, 2024. 2  DISCLOSURE BROCHURE Item 3. Table of Contents Item 2. Material Changes ............................................................................................................... 2 Item 3. Table of Contents ............................................................................................................... 3 Item 4. Advisory Business ............................................................................................................... 4 Item 5. Fees and Compensation ..................................................................................................... 6 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 Loss ............................................ 9 Item 9. Disciplinary Information ................................................................................................... 12 Item 10. Other Financial Industry Activities and Affiliations ........................................................ 12 Item 11. Code of Ethics ................................................................................................................. 13 Item 12. Brokerage Practices ........................................................................................................ 13 Item 13. Review of Accounts ........................................................................................................ 16 Item 14. Client Referrals and Other Compensation ..................................................................... 17 Item 15. Custody .......................................................................................................................... 17 Item 16. Investment Discretion .................................................................................................... 18 Item 17. Voting Client Securities .................................................................................................. 18 Item 18. Financial Information ..................................................................................................... 18 3  DISCLOSURE BROCHURE Item 4. Advisory Business Emerald Advisors, which also does business as “the Smith Group” and “the Smith Group Multi-Family Office,” offers a variety of family office advisory services, which include financial planning, consulting, and investment management services. Prior to Emerald Advisors rendering any of the foregoing advisory services, clients are required to enter into one or more written agreements with Emerald Advisors setting forth the relevant terms and conditions of the advisory relationship (the “Advisory Agreement”). Emerald Advisors filed for registration as an investment adviser in September 2019 and is wholly owned by Michael Smith as November 2019. As of December 31, 2024, Emerald Advisors had $904,398,476 assets under management, of which $$900,541,794 was managed on a discretionary basis and $3,856,682 was managed on a non- discretionary basis. While this brochure generally describes the business of Emerald Advisors, certain sections also discuss the activities of its Supervised Persons, which refer to the Firm’s officers, partners, directors (or other persons occupying a similar status or performing similar functions), employees or other persons who provide investment advice on Emerald Advisors’ behalf and are subject to the Firm’s supervision or control. Financial Planning and Consulting Services Emerald Advisors offers clients a broad range of financial planning and consulting services, which include any or all of the following functions: • Risk Management • Charitable Giving • Distribution Planning • Tax Planning • Manager Due Diligence • Equity compensation evaluation • Education Planning • Lending • Business Planning • Cash Flow Forecasting • Trust and Estate Planning • Financial Reporting • Deferred Compensation Planning • Insurance Planning • Retirement Planning • Family Office Services While each of these services is available on a stand-alone basis, certain of them can also be rendered in conjunction with investment portfolio management as part of a comprehensive wealth management engagement (described in more detail below). In performing these services, Emerald Advisors is not required to verify any information received from the client or from the client’s other professionals (e.g., attorneys, accountants, etc.,) and is expressly authorized to rely on such information. Emerald Advisors recommends certain clients engage the Firm for additional related services, its Supervised Persons in their individual capacities as insurance agents and/or other professionals to implement its recommendations. Clients are advised that a conflict of interest exists for the Firm to recommend that clients engage Emerald Advisors or its affiliates to provide (or continue to provide) additional services for compensation, including investment management services. Clients retain absolute discretion over all decisions regarding implementation and are under no obligation to act upon 4  DISCLOSURE BROCHURE any of the recommendations made by Emerald Advisors under a financial planning or consulting engagement. Clients are advised that it remains their responsibility to promptly notify the Firm of any change in their financial situation or investment objectives for the purpose of reviewing, evaluating or revising Emerald Advisors’ recommendations and/or services. Investment Management Services Emerald Advisors provides clients with discretionary management of investment portfolios. Emerald Advisors primarily allocates client assets among various exchange-traded funds (“ETFs”), individual debt and equity securities, and market linked notes, and privately placed securities (including debt, equity and/or interests in pooled investment vehicles) in accordance with their stated investment objectives. The Firm also recommends a limited number of mutual funds and independent investment managers (“Independent Managers”). Where appropriate, the Firm also provides advice about any type of legacy position or other investment held in client portfolios (clients should not assume that these assets are being continuously monitored or otherwise advised on by the Firm unless specifically agreed upon). Clients can engage Emerald Advisors to manage and/or advise on certain investment products that are not maintained at their primary custodian, such as variable life insurance and annuity contracts and assets held in employer sponsored retirement plans and qualified tuition plans (i.e., 529 plans). In these situations, Emerald Advisors directs or recommends the allocation of client assets among the various investment options available with the product. These assets are generally maintained at the underwriting insurance company or the custodian designated by the product’s provider. Emerald Advisors tailors its advisory services to meet the needs of its individual clients and seeks to ensure, on a continuous basis, that client portfolios are managed in a manner consistent with those needs and objectives. Emerald Advisors consults with clients on an initial and ongoing basis to assess their specific risk tolerance, time horizon, liquidity constraints and other related factors relevant to the management of their portfolios. Clients are advised to promptly notify Emerald Advisors if there are changes in their financial situation or if they wish to place any limitations on the management of their portfolios. Clients can impose reasonable restrictions or mandates on the management of their accounts if Emerald Advisors determines, in its sole discretion, the conditions would not materially impact the performance of a management strategy or prove overly burdensome to the Firm’s management efforts. Use of Independent Managers As mentioned above, Emerald Advisors selects certain Independent Managers to actively manage a portion of its clients’ assets. The specific terms and conditions under which a client engages an Independent Manager may be set forth in a separate written agreement with the designated Independent Manager. That agreement can be between the Firm and the Independent Manager (often called a subadvisor) or the client and the Independent Manager (sometimes called a separate account manager). In addition to this brochure, clients may also receive the written disclosure documents of the respective Independent Managers engaged to manage their assets. Emerald Advisors evaluates a variety of information about Independent Managers, which includes the Independent Managers’ public disclosure documents, materials supplied by the Independent Managers themselves and other third-party analyses it believes are reputable. To the extent possible, the Firm seeks to assess the Independent Managers’ investment strategies, past performance and risk results in relation to its clients’ individual portfolio allocations and risk exposure. Emerald Advisors also takes into 5  DISCLOSURE BROCHURE consideration each Independent Manager’s management style, returns, reputation, financial strength, reporting, pricing and research capabilities, among other factors. Emerald Advisors continues to provide services relative to the discretionary or non-discretionary selection of the Independent Managers. On an ongoing basis, the Firm monitors the performance of those accounts being managed by Independent Managers. Emerald Advisors seeks to ensure the Independent Managers’ strategies and target allocations remain aligned with its clients’ investment objectives and overall best interests. Security Claims Class Action Litigation Emerald Advisors has engaged a third-party service provider, Chicago Clearing Corporation (CCC), to monitor and file securities claims class action litigation paperwork with claims administrators on behalf of the Firm’s clients. When a claim is settled and payments are awarded to Emerald Advisors clients, it may be necessary to share client information, such as name and account number, with CCC in connection with this service. Emerald Advisors does not receive any fees or remuneration in connection with this service nor does it receive any fees from the third-party provider(s). CCC earns a fee based on a flat percentage of all claims it collects on behalf of Emerald Advisors’ clients. This fee is collected and retained by CCC out of the claims paid by the claim administrator. Clients may opt out of this service at any time. If a client opts out, Emerald Advisors does not have an obligation to advise or take any action on behalf of a client with regard to class action litigation involving investments held in or formerly held in a clientʹs account. Class Action Claims In October of 2023, we began providing class action litigation monitoring and securities claim filing services through an independent third party, Chicago Clearing Corporation ("CCC"). You are included in this service unless you choose to opt out. You may change your opt-out election at any time by notifying us in writing. If you participate in this service, CCC will retain 15% of each claim recovery you receive. We have the right to change the provider of this service. If we do, we will notify you and send you another opt-out election form. Estate Planning Services Emerald Advisors facilitates estate planning document creation using a third-party technology platform that enables clients to create, manage, and administer their estate plans. The third-party provider facilitates an optional hybrid model where clients can start the process digitally but still receive a human experience by consulting live with one of the local Trust and Estate attorneys. Once referred, the client enters the third-party platform and is guided through the document creation process by the provider, not by Emerald Advisors. Neither Emerald Advisors nor its advisor representatives are involved in drafting legal documents or making selections on behalf of the client. Through advisor-only access, Emerald Advisors and its representatives have read-only visibility into client accounts. This access allows advisors to guide clients in completing the estate planning process and identify opportunities for optimization. Item 5. Fees and Compensation Emerald Advisors offers services on a fee basis, which includes fixed fees, as well as fees based upon assets under management. Additionally, certain of the Firm’s Supervised Persons, in their individual capacities, 6  DISCLOSURE BROCHURE offer insurance products under a separate commission-based arrangement. Financial Planning and Consulting Fees Emerald Advisors charges a fixed fee for providing financial planning and consulting services under a stand-alone engagement. These fees are negotiable, but range from $2,500 to $300,000, depending upon the scope and complexity of the services and the professional rendering the financial planning and/or the consulting services. If the client engages the Firm for additional investment advisory services, Emerald Advisors may offset all or a portion of its fees for those services based upon the amount paid for the financial planning and/or consulting services. These fees can include the service provided by other professionals on behalf of the client, such as accountants and attorney. The terms and conditions of the financial planning and/or consulting engagement are set forth in the Advisory Agreement and Emerald Advisors requires one-half of the fee (estimated hourly or fixed) payable upon execution of the Advisory Agreement. The outstanding balance is due upon delivery of the financial plan or completion of the agreed upon services. The Firm does not, however, take receipt of $1,200 or more in prepaid fees in excess of six months in advance of services rendered. Wealth Management Fees Emerald Advisors charges an annual fee based on the amount of assets under the Firm’s management under a wealth management engagement, which include both financial planning and consulting services and investment management services. This annual fee varies in accordance with the following fee schedule: HOUSEHOLD PORTFOLIO VALUE BASE FEE Up to $2,000,000 $2,000,000 - $5,000,000 $5,000,000 - $10,000,000 $10,000,000 - $25,000,000 Above $25,000,000 1.10% 1.00% 0.90% 0.85% Custom The annual fee is prorated and charged monthly, in advance, based upon the market value of the assets being managed by Emerald Advisors on the last day of the previous month. If assets are deposited into or withdrawn from an account after the inception of a billing period, the fee payable with respect to such assets is not adjusted to reflect the interim change in portfolio value. For the initial period of an engagement, the fee is calculated on a pro rata basis. In the event the advisory agreement is terminated, the fee for the final billing period is prorated through the effective date of the termination and the outstanding or unearned portion of the fee is charged or refunded to the client, as appropriate. Additionally, for asset management services the Firm provides with respect to certain client holdings (e.g., held-away assets, accommodation accounts, alternative investments, etc.), Emerald Advisors may negotiate a fee rate that differs from the range set forth above. Clients are advised that a conflict of interest exists for the Firm to recommend that clients engage Emerald Advisors for additional services for compensation, including rolling over retirement accounts or moving other assets to the Firm’s management. Clients retain absolute discretion over all decisions regarding engaging the Firm and are under no obligation to act upon any of the recommendations. Estate planning document creation services through our third-party provider are offered for a separate 7  DISCLOSURE BROCHURE fee. Fee Discretion Emerald Advisors may, in its sole discretion, negotiate to charge a lesser fee based upon certain criteria, such as anticipated future earning capacity, anticipated future additional assets, dollar amount of assets to be managed, related accounts, account composition, pre-existing/legacy client relationship, account retention and pro bono activities. Additional Fees and Expenses In addition to the advisory fees paid to Emerald Advisors, clients also incur certain charges imposed by other third parties, such as broker-dealers, custodians, trust companies, banks and other financial institutions (collectively “Financial Institutions”). These additional charges include securities brokerage commissions, transaction fees, custodial fees, fees attributable to alternative assets, fees charged by the Independent Managers, margin costs, charges imposed directly by a mutual fund or ETF in a client’s account, as disclosed in the fund’s prospectus (e.g., fund management fees and other fund expenses), deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions. The Firm’s brokerage practices are described at length in Item 12, below. Direct Fee Debit Clients provide Emerald Advisors and/or certain Independent Managers with the authority to directly debit their accounts for payment of the investment advisory fees. The Financial Institutions that act as the qualified custodian for client accounts, from which the Firm retains the authority to directly deduct fees, have agreed to send statements to clients not less than quarterly detailing all account transactions, including any amounts paid to Emerald Advisors. Use of Margin Emerald Advisors may recommend that certain clients utilize margin in the client’s investment portfolio or other borrowing (such as lines of credit). Emerald Advisors only recommends such borrowing for non- investment needs, such as bridge loans and other financing needs. The Firm’s fees are determined based upon the value of the assets being managed gross of any margin or borrowing. Account Additions and Withdrawals Clients can make additions to and withdrawals from their account at any time, subject to Emerald Advisors’ right to terminate an account. Additions can be in cash or securities provided that the Firm reserves the right to liquidate any transferred securities or declines to accept particular securities into a client’s account. Clients can withdraw account assets on notice to Emerald Advisors, subject to the usual and customary securities settlement procedures. However, the Firm designs its portfolios as long-term investments and the withdrawal of assets may impair the achievement of a client’s investment objectives. Emerald Advisors may consult with its clients about the options and implications of transferring securities. Clients are advised that when transferred securities are liquidated, they may be subject to transaction fees, short-term redemption fees, fees assessed at the mutual fund level (e.g., contingent deferred sales charges) and/or tax ramifications. Educational Seminars/Workshops 8  DISCLOSURE BROCHURE Emerald Advisors provides periodic educational seminars and workshops to clients and prospective clients. Educational seminars and workshops are offered free of charge. Item 6. Performance-Based Fees and Side-by-Side Management Emerald Advisors does not provide any services for a performance-based fee (i.e., a fee based on a share of capital gains or capital appreciation of a client’s assets). Item 7. Types of Clients Emerald Advisors offers services to individuals, trusts, estates, foundations, corporations, and business entities. Minimum Account Fee As a condition for starting and maintaining a wealth management relationship, Emerald Advisors imposes a minimum annual fee of $3,000 This minimum fee will cause clients with smaller portfolios to incur an effective fee rate that is higher than the Firm’s stated fee. Emerald Advisors may, in its sole discretion, elect to charge a lesser minimum fee based upon certain criteria, including anticipated future earning capacity, anticipated future additional assets, dollar amount of assets to be managed, related accounts, account composition, pre-existing client, account retention, and pro bono activities. Item 8. Methods of Analysis, Investment Strategies and Risk of Loss Methods of Analysis and Investment Strategies Emerald Advisors is a private investment office providing independent, objective and comprehensive advice and family office services to wealthy families. The Firm is solely owned and have no outside shareholders or corporate parent. As a registered investment advisor, the firm acts as a fiduciary governed by the Investment Advisers Act of 1940. Emerald Advisors operates as a multi-family office advising a select number of clients. The Firm’s primary objective is to ensure assets are aligned to the goals, objectives and purpose of each family. Emerald Advisors utilizes a top down approach to reviewing and developing a roadmap that is customized to each and every family. From this roadmap the Firm invests assets to align with the risk and time frame of the family’s stated purpose. Emerald Advisors’ Approach The Firm places a high priority on capital preservation utilizing long term investment strategies, which include low cost, tax efficient, transparent and buy / hold strategies. If appropriate, Emerald Advisors recommends private equity and closely held real estate opportunities. Through years of experience the Firm has developed finely honed skills to identify and solve challenges clients may not even be aware of. More importantly, the Firm brings structure and control to its clients’ 9  DISCLOSURE BROCHURE lives, with a goal of allowing them to feel in charge of their wealth and confident they are using their money wisely. Risk of Loss The following list of risk factors does not purport to be a complete enumeration or explanation of the risks involved with respect to the Firm’s investment management activities. Clients should consult with their legal, tax, and other advisors before engaging the Firm to provide investment management services on their behalf. Market Risks Investing involves risk, including the potential loss of principal, and all investors should be guided accordingly. The profitability of a significant portion of Emerald Advisors’ recommendations and/or investment decisions may depend to a great extent upon correctly assessing the future course of price movements of stocks, bonds and other asset classes. In addition, investments may be adversely affected by financial markets and economic conditions throughout the world. There can be no assurance that Emerald Advisors will be able to predict these price movements accurately or capitalize on any such assumptions. Volatility Risks The prices and values of investments can be highly volatile, and are influenced by, among other things, interest rates, general economic conditions, the condition of the financial markets, the financial condition of the issuers of such assets, changing supply and demand relationships, and programs and policies of governments. Cash Management Risks The Firm may invest some of a client’s assets temporarily in money market funds or other similar types of investments, during which time an advisory account may be prevented from achieving its investment objective. Equity-Related Securities and Instruments The Firm may take long in common stocks of U.S. and non-U.S. issuers traded on national securities exchanges and over-the-counter markets. The value of equity securities varies in response to many factors. These factors include, without limitation, factors specific to an issuer and factors specific to the industry in which the issuer participates. Individual companies may report poor results or be negatively affected by industry and/or economic trends and developments, and the stock prices of such companies may suffer a decline in response. In addition, equity securities are subject to stock risk, which is the risk that stock prices historically rise and fall in periodic cycles. U.S. and non-U.S. stock markets have experienced periods of substantial price volatility in the past and may do so again in the future. In addition, investments in small- capitalization, midcapitalization and financially distressed companies may be subject to more abrupt or erratic price movements and may lack sufficient market liquidity, and these issuers often face greater business risks. Fixed Income Securities Fixed income securities are subject to the risk of the issuer’s or a guarantor’s inability to meet principal and interest payments on its obligations and to price volatility. Mutual Funds and ETFs An investment in a mutual fund or ETF involves risk, including the loss of principal. Mutual fund and ETF 10  DISCLOSURE BROCHURE shareholders are necessarily subject to the risks stemming from the individual issuers of the fund’s underlying portfolio securities. Such shareholders are also liable for taxes on any fund-level capital gains, as mutual funds and ETFs are required by law to distribute capital gains in the event they sell securities for a profit that cannot be offset by a corresponding loss. Shares of mutual funds are generally distributed and redeemed on an ongoing basis by the fund itself or a broker acting on its behalf. The trading price at which a share is transacted is equal to a fund’s stated daily per share net asset value (“NAV”), plus any shareholders fees (e.g., sales loads, purchase fees, redemption fees). The per share NAV of a mutual fund is calculated at the end of each business day, although the actual NAV fluctuates with intraday changes to the market value of the fund’s holdings. The trading prices of a mutual fund’s shares may differ significantly from the NAV during periods of market volatility, which may, among other factors, lead to the mutual fund’s shares trading at a premium or discount to actual NAV. Shares of ETFs are listed on securities exchanges and transacted at negotiated prices in the secondary market. Generally, ETF shares trade at or near their most recent NAV, which is generally calculated at least once daily for indexed based ETFs and potentially more frequently for actively managed ETFs. However, certain inefficiencies may cause the shares to trade at a premium or discount to their pro rata NAV. There is also no guarantee that an active secondary market for such shares will develop or continue to exist. Generally, an ETF only redeems shares when aggregated as creation units (usually 20,000 shares or more). Therefore, if a liquid secondary market ceases to exist for shares of a particular ETF, a shareholder may have no way to dispose of such shares. Use of Independent Managers As stated above, Emerald Advisors selects certain Independent Managers to manage a portion of its clients’ assets. In these situations, Emerald Advisors continues to conduct ongoing due diligence of such managers, but such recommendations rely to a great extent on the Independent Managers’ ability to successfully implement their investment strategies. In addition, Emerald Advisors does not have the ability to supervise the Independent Managers on a day-to-day basis. Use of Private Collective Investment Vehicles Emerald Advisors recommends that certain clients invest in privately placed collective investment vehicles (e.g., hedge funds, private equity funds, etc.). The managers of these vehicles have broad discretion in selecting the investments. There are few limitations on the types of securities or other financial instruments which may be traded and no requirement to diversify. Hedge funds may trade on margin or otherwise leverage positions, thereby potentially increasing the risk to the vehicle. In addition, because the vehicles are not registered as investment companies, there is an absence of regulation. There are numerous other risks in investing in these securities. Clients should consult each fund’s private placement memorandum and/or other documents explaining such risks prior to investing. Market-Linked Notes Emerald Advisors recommends an in investment in, or allocate assets among, market-linked notes (“MLNs”) for exposure to various market indices with the potential for downside protection.. MLNs are intended to allow investors increase diversification and potentially enhance the risk/return profile of portfolios. MLNs are designed to provide exposure to various asset classes while potentially limiting downside exposure. Many MLNs offer full or partial principal protection; however, some do not have any downside protection. The amount of principal protection depends on the structure, and is stated in the product’s term sheet. There are substantial risks in investing in MLNs. The risks include: principal risk 11  DISCLOSURE BROCHURE because the principal is guaranteed by the issuer; performance risk; liquidity risk as investors may be subject to early redemption fee if the note is redeemed prior to maturity and there may not be a secondary market; credit risk of the issuer; and call/reinvestment risk. Management through Similarly Managed “Model” Accounts Emerald Advisors manages certain accounts through the use of similarly managed “model” portfolios, whereby the Firm allocates all or a portion of its clients’ assets among various mutual funds and/or securities on a discretionary basis using one or more of its proprietary investment strategies. In managing assets through the use of models, the Firm remains in compliance with the safe harbor provisions of Rule 3a-4 of the Investment Company Act of 1940. The strategy used to manage a model portfolio may involve an above average portfolio turnover that could negatively impact clients’ net after tax gains. While the Firm seeks to ensure that clients’ assets are managed in a manner consistent with their individual financial situations and investment objectives, securities transactions effected pursuant to a model investment strategy are usually done without regard to a client’s individual tax ramifications. Clients should contact the Firm if they experience a change in their financial situation or if they want to impose reasonable restrictions on the management of their accounts. Currency Risks An advisory account that holds investments denominated in currencies other than the currency in which the advisory account is denominated may be adversely affected by the volatility of currency exchange rates. Interest Rate Risks Interests rates may fluctuate significantly, causing price volatility with respect to securities or instruments held by clients. Item 9. Disciplinary Information Emerald Advisors has not been involved in any legal or disciplinary events that are material to a client’s evaluation of its advisory business or the integrity of its management. Item 10. Other Financial Industry Activities and Affiliations This item requires investment advisers to disclose certain financial industry activities and affiliations. Licensed Insurance Agents A number of the Firm’s Supervised Persons are licensed insurance agents and offer certain insurance products on a fully-disclosed commissionable basis. A conflict of interest exists to the extent that Emerald Advisors recommends the purchase of insurance products where its Supervised Persons are entitled to insurance commissions or other additional compensation. The Firm has procedures in place whereby it seeks to ensure that all recommendations are made in its clients’ best interest regardless of any such affiliations. Trustee to Trust Client Michael G. Smith acts as a Trustee to a Trust client. Clients should be aware that this service may involve a conflict of interest. Emerald Advisors always acts in the best interest of the client and clients always have 12  DISCLOSURE BROCHURE the right to decide whether or not to utilize the services of any Emerald Advisors representative in such individual’s outside capacities. Item 11. Code of Ethics Emerald Advisors has adopted a code of ethics in compliance with applicable securities laws (“Code of Ethics”) that sets forth the standards of conduct expected of its Supervised Persons. Emerald Advisors’ Code of Ethics contains written policies reasonably designed to prevent certain unlawful practices such as the use of material non-public information by the Firm or any of its Supervised Persons and the trading by the same of securities ahead of clients in order to take advantage of pending orders. The Code of Ethics also requires certain of Emerald Advisors’ personnel to report their personal securities holdings and transactions and obtain pre-approval of certain investments (e.g., initial public offerings, limited offerings). However, the Firm’s Supervised Persons are permitted to buy or sell securities that it also recommends to clients if done in a fair and equitable manner that is consistent with the Firm’s policies and procedures. This Code of Ethics has been established recognizing that some securities trade in sufficiently broad markets to permit transactions by certain personnel to be completed without any appreciable impact on the markets of such securities. Therefore, under limited circumstances, exceptions may be made to the policies stated below. When the Firm is engaging in or considering a transaction in any security on behalf of a client, no Supervised Person with access to this information may knowingly effect for themselves or for their immediate family (i.e., spouse, minor children and adults living in the same household) a transaction in that security unless: the transaction has been completed; the transaction for the Supervised Person is completed as part of a batch trade with clients; or • • • a decision has been made not to engage in the transaction for the client. These requirements are not applicable to: (i) direct obligations of the Government of the United States; (ii) money market instruments, bankers’ acceptances, bank certificates of deposit, commercial paper, repurchase agreements and other high quality short-term debt instruments, including repurchase agreements; (iii) shares issued by money market funds; and iv) shares issued by other unaffiliated open- end mutual funds. Clients and prospective clients may contact Emerald Advisors to request a copy of its Code of Ethics. Item 12. Brokerage Practices Recommendation of Broker-Dealers for Client Transactions Emerald Advisors recommends that clients utilize the custody, brokerage and clearing services of Charles Schwab & Co, Inc. through its Schwab Advisor Services division (“Schwab”), as well as National Financial Services LLC and Fidelity Brokerage Services LLC (together with affiliates, “Fidelity”). The final decision to custody assets with Schwab or Fidelity is at the discretion of the client, including those accounts under ERISA or IRA rules and regulations, in which case the client is acting as either the plan sponsor or IRA account holder. Emerald Advisors is independently owned and operated and not affiliated with either Schwab or Fidelity. Schwab and Fidelity provides Emerald Advisors with access to its institutional trading 13  DISCLOSURE BROCHURE and custody services, which are typically not available to retail investors. Factors which Emerald Advisors considers in recommending Schwab, Fidelity, or any other broker-dealer to clients include their respective financial strength, reputation, execution, pricing, research and service. Schwab and Fidelity enable the Firm to obtain many mutual funds and ETFs without transaction charges and other securities at nominal transaction charges. The commissions paid by Emerald Advisors’ clients to Schwab and Fidelity comply with the Firm’s duty to obtain “best execution.” Clients may pay commissions that are higher than another qualified Financial Institution might charge to effect the same transaction where Emerald Advisors determines that the commissions are 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 Financial Institution’s services, including among others, the value of research provided, execution capability, commission rates and responsiveness. Emerald Advisors seeks competitive rates but may not necessarily obtain the lowest possible commission rates for client transactions. The commissions and/or transaction fees charged by Schwab and Fidelity may be higher or lower than those charged by other Financial Institutions. Transactions may be cleared through other broker-dealers with whom the Firm and its custodians have entered into agreements for prime brokerage clearing services. Should an account make use of prime brokerage, the Client may be required to sign an additional agreement, and additional fees are likely to be charged. Consistent with obtaining best execution, brokerage transactions are directed to certain broker-dealers in return for investment research products and/or services which assist Emerald Advisors in its investment decision-making process. Such research will be used to service all of the Firm’s clients, but brokerage commissions paid by one client may be used to pay for research that is not used in managing that client’s portfolio. The receipt of investment research products and/or services as well as the allocation of the benefit of such investment research products and/or services poses a conflict of interest because Emerald Advisors does not have to produce or pay for the products or services. Emerald Advisors periodically and systematically reviews its policies and procedures regarding its recommendation of Financial Institutions in light of its duty to obtain best execution. Software and Support Provided by Financial Institutions Emerald Advisors receives without cost from Schwab and Fidelity administrative support, computer software, related systems support, as well as other third party support as further described below (together "Support") which allow Emerald Advisors to better monitor client accounts maintained at Schwab and Fidelity and to otherwise conduct its business. Emerald Advisors receives the Support without cost because the Firm renders investment management services to clients that maintain assets at Schwab and Fidelity. The Support is not provided in connection with securities transactions of clients (i.e., not “soft dollars”). The Support benefits Emerald Advisors, but not its clients directly. Clients should be aware that Emerald Advisors’ receipt of economic benefits such as the Support from a broker-dealer creates a conflict of interest since these benefits will influence the Firm’s choice of broker-dealer over another that does not furnish similar software, systems support or services. In fulfilling its duties to its clients, Emerald Advisors endeavors at all times to put the interests of its clients first and has determined that the recommendation of Schwab and/or Fidelity is in the best interest of clients and satisfies the Firm's duty 14  DISCLOSURE BROCHURE to seek best execution. Emerald Advisors receives the following benefits from Schwab and Fidelity: i) receipt of duplicate client confirmations and bundled duplicate statements; ii) access to a trading desk that exclusively services its institutional traders; iii) access to block trading which provides the ability to aggregate securities transactions and then allocate the appropriate shares to client accounts; and iv) access to an electronic communication network for client order entry and account information. Support Received from Schwab The Support received from Schwab is generally available to independent investment advisors on an unsolicited basis, at no charge to them so long as a certain amount of the advisor’s clients’ assets are maintained in accounts at Schwab Advisor Services. Schwab’s services include brokerage services that are related to the execution of securities transactions, custody, research, including that in the form of advice, analyses and reports, and access to mutual funds and other investments that are otherwise generally available only to institutional investors or would require a significantly higher minimum initial investment. For 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. Schwab also makes available to the Firm other products and services that benefit the Firm but may not benefit its clients’ accounts. These benefits may include national, regional or Firm specific educational events organized and/or sponsored by Schwab. Other potential benefits may include occasional business entertainment of personnel of Emerald Advisors 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 Emerald Advisors 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 the Firm's 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 the Firm’s accounts, including accounts not maintained at Schwab. Schwab also makes available to Emerald Advisors other services intended to help the 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. In addition, Schwab may make available, arrange and/or pay vendors for these types of services rendered to the Firm by independent third parties. Schwab 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 the Firm. While, as a fiduciary, Emerald Advisors endeavors to act in its clients’ best interests, the Firm's recommendation that clients maintain their assets in accounts at Schwab may be based in part on the benefits received and not solely on the nature, cost or quality of custody and brokerage services provided by Schwab, which creates a potential conflict of interest. Brokerage for Client Referrals Emerald Advisors does not consider, in selecting or recommending broker-dealers, whether the Firm 15  DISCLOSURE BROCHURE receives client referrals from the Financial Institutions or other third party. Directed Brokerage The client may direct Emerald Advisors in writing to use a particular Financial Institution to execute some or all transactions for the client. In that case, the client will negotiate terms and arrangements for the account with that Financial Institution and the Firm will not seek better execution services or prices from other Financial Institutions or be able to “batch” client transactions for execution through other Financial Institutions with orders for other accounts managed by Emerald Advisors (as described above). As a result, the client may pay higher commissions or other transaction costs, greater spreads or may receive less favorable net prices, on transactions for the account than would otherwise be the case. Subject to its duty of best execution, Emerald Advisors may decline a client’s request to direct brokerage if, in the Firm’s sole discretion, such directed brokerage arrangements would result in additional operational difficulties or violate restrictions imposed by other broker-dealers (as further discussed below). Trade Aggregation Transactions for each client will be effected independently, unless Emerald Advisors decides to purchase or sell the same securities for several clients at approximately the same time. Emerald Advisors may (but is not obligated to) combine or “batch” such orders to obtain best execution, to negotiate more favorable commission rates or to allocate equitably among the Firm’s clients differences in prices and commissions or other transaction costs that might not have been obtained had such orders been placed independently. Under this procedure, transactions will be averaged as to price and allocated among Emerald Advisors’ clients pro rata to the purchase and sale orders placed for each client on any given day. To the extent that the Firm determines to aggregate client orders for the purchase or sale of securities, including securities in which Emerald Advisors’ Supervised Persons may invest, the Firm does so in accordance with applicable rules promulgated under the Advisers Act and no-action guidance provided by the staff of the U.S. Securities and Exchange Commission. Emerald Advisors does not receive any additional compensation or remuneration as a result of the aggregation. In the event that the Firm determines that a prorated allocation is not appropriate under the particular circumstances, the allocation will be made based upon other relevant factors, which include: (i) when only a small percentage of the order is executed, shares may be allocated to the account with the smallest order or the smallest position or to an account that is out of line with respect to security or sector weightings relative to other portfolios, with similar mandates; (ii) allocations may be given to one account when one account has limitations in its investment guidelines which prohibit it from purchasing other securities which are expected to produce similar investment results and can be purchased by other accounts; (iii) if an account reaches an investment guideline limit and cannot participate in an allocation, shares may be reallocated to other accounts (this may be due to unforeseen changes in an account’s assets after an order is placed); (iv) with respect to sale allocations, allocations may be given to accounts low in cash; (v) in cases when a pro rata allocation of a potential execution would result in a de minimis allocation in one or more accounts, the Firm may exclude the account(s) from the allocation; the transactions may be executed on a pro rata basis among the remaining accounts; or (vi) in cases where a small proportion of an order is executed in all accounts, shares may be allocated to one or more accounts on a random basis. Item 13. Review of Accounts 16  DISCLOSURE BROCHURE Account Reviews Emerald Advisors monitors client portfolios on a continuous and ongoing basis. The Firm rebalances accounts semi-annually if necessary and reviews updated portfolio holdings on at least an annual basis. Such reviews are conducted by the Firm’s investment adviser representatives and/or planners. All investment advisory clients are encouraged to discuss their needs, goals and objectives with Emerald Advisors and to keep the Firm informed of any changes thereto. The Firm contacts ongoing investment advisory clients at least annually to review its previous services and/or recommendations and periodically to discuss the impact resulting from any changes in the client’s financial situation and/or investment objectives. Account Statements and Reports Clients are provided with transaction confirmation notices and regular summary account statements directly from the Financial Institutions where their assets are custodied. From time-to-time or as otherwise requested, clients may also receive written or electronic reports from Emerald Advisors and/or an outside service provider, which contain certain account and/or market-related information, such as an inventory of account holdings or account performance. Clients should compare the account statements they receive from their custodian with any documents or reports they receive from Emerald Advisors or an outside service provider. Item 14. Client Referrals and Other Compensation Client Referrals The Firm does not currently provide compensation to any third-party solicitors for client referrals. Other Compensation The Firm receives economic benefits from Schwab and Fidelity. The benefits, conflicts of interest and how they are addressed are discussed above in response to Item 12. Item 15. Custody Emerald Advisors is deemed to have custody of client funds and securities because the Firm is given the ability to debit client accounts for payment of the Firm’s fees. As such, client funds and securities are maintained at one or more Financial Institutions that serve as the qualified custodian with respect to such assets. Such qualified custodians will send account statements to clients at least once per calendar quarter that typically detail any transactions in such account for the relevant period. In addition, as discussed in Item 13, Emerald Advisors will also send, or otherwise make available, periodic supplemental reports to clients. Clients should carefully review the statements sent directly by the Financial Institutions and compare them to those received from Emerald Advisors. Emerald Advisors is also deemed to have custody due to certain clients providing the Firm limited power of attorney to disburse funds to one or more third parties as specifically designated by the client contained in a standing letter of authorization (“SLOA”). In such circumstances, the Firm will implement the steps in the SEC’s no-action letter on February 21, 2017 which includes (in summary): i) client will provide instruction for the SLOA to the custodian; ii) client will authorize the Firm to direct transfers to the specific third party; iii) the custodian will perform appropriate verification of the instruction and provide a transfer 17  DISCLOSURE BROCHURE of funds notice to the client promptly after each transfer; iv) the client will have the ability to terminate or change the instruction; v) the Firm will have no authority or ability to designate or change the identity or any information about the third party; vi) the Firm will keep records showing that the third party is not a related party of the Firm or located at the same address as the Firm; and vii) the custodian will send the client an initial and annual notice confirming the SLOA instructions. Emerald Advisors may also be deemed to have custody over the funds and securities of trust accounts for which it or its related persons serve as trustee. Additionally, Emerald Advisors has custody of certain client funds/securities due to their ability to do bill pay on behalf of those clients. Item 16. Investment Discretion Emerald Advisors is given the authority to exercise discretion on behalf of clients. Emerald Advisors is considered to exercise investment discretion over a client’s account if it can effect and/or direct transactions in client accounts without first seeking their consent. Emerald Advisors is given this authority through a power-of-attorney included in the agreement between Emerald Advisors and the client. Clients may request a limitation on this authority (such as certain securities not to be bought or sold). Emerald Advisors takes discretion over the following activities: • The securities to be purchased or sold; • The amount of securities to be purchased or sold; • When transactions are made; • The broker-dealer that executes trades (in the case of a prime brokerage relationship); and • The Independent Managers to be hired or fired. Item 17. Voting Client Securities Emerald Advisors does not accept the authority to vote a client’s securities (i.e., proxies) on their behalf. Clients receive proxies directly from the Financial Institutions where their assets are custodied and may contact the Firm at the contact information on the cover of this brochure with questions about any such issuer solicitations. Item 18. Financial Information Emerald Advisors is not required to disclose any financial information due to the following: • The Firm does not require or solicit the prepayment of more than $1,200 in fees six months or more in advance of services rendered; • The Firm does not have a financial condition that is reasonably likely to impair its ability to meet contractual commitments to clients; and • The Firm has not been the subject of a bankruptcy petition at any time during the past ten years. 18