FLFS ADVISORY LLC

Item 1: Cover Sheet FORM ADV PART 2A INFORMATIONAL BROCHURE FLFS ADVISORY LLC 29 Lasalle Parkway Victor, NY 14564 (585) 586-2600 December 15, 2025 This brochure provides information about the qualifications and business practices of FLFS Advisory LLC. If you have any questions about the contents of this brochure, please contact us at (585) 586-2600. 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. Our registration does not imply a certain level of skill or training. Additional information about FLFS Advisory LLC (CRD# 334771) is also available on the SEC’s website at www.adviserinfo.sec.gov. 1  Item 2: Statement of Material Changes In this Item it is required to discuss any material changes which have been made to the brochure. There are currently no material changes to report. Item 3: Table of Contents Item 1: Cover Sheet .................................................................................................................................... 1 Item 2: Statement of Material Changes ...................................................................................................... 2 Item 3: Table of Contents ........................................................................................................................... 2 Item 4: Advisory Business ......................................................................................................................... 3 Item 5: Fees and Compensation ................................................................................................................. 3 Item 6: Performance-Based Fees ................................................................................................................ 6 Item 7: Types of Clients ............................................................................................................................. 6 Item 8: Methods of Analysis, Investment Strategies and Risk of Loss ...................................................... 7 Item 9: Disciplinary Information .............................................................................................................. 10 Item 10: Other Financial Industry Activities and Affiliations .................................................................... 10 Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading ............. 12 Item 12: Brokerage Practices ..................................................................................................................... 12 Item 13: Review of Accounts ..................................................................................................................... 15 Item 14: Client Referrals and Other Compensation ................................................................................... 15 Item 15: Custody ........................................................................................................................................ 15 Item 16: Investment Discretion .................................................................................................................. 15 Item 17: Voting Client Securities ............................................................................................................... 16 Item 18: Financial Information .................................................................................................................. 16 2  INFORMATIONAL BROCHURE FLFS Advisory LLC Item 4: Advisory Business FLFS Advisory LLC (“FLFS”) is owned by the principals of the firm Alan D. Deuel and David F. Gwynn and have over 25 and over 55 years respectively of experience in the industry. FLFS focuses on building thoughtful and engaging client relationships through the planning and investment management processes and provide services that are connected to each client’s financial well-being. FLFS’s comprehensive process starts with a discovery meeting to get to know the client and what is most important to them, where the client is now financially and where the client would like to be in the future if they had their choice. FLFS collects information about the client’s current financial situation through conversation and data sheets in order to understand the complete picture. The data gathered includes name and contact information, monthly expenses and income, list of assets and liabilities, and objectives in terms of what the client is trying to accomplish when working with FLFS. As part of the discovery process, FLFS will educate clients on topics such as how probate of an estate works, budgeting, debt management and any other topics related to the client’s financial well-being. FLFS will then design a customized plan and strategy so assets flow where the client intends them to from an estate planning perspective in a tax efficient manner. FLFS does not prepare estate documents but can refer clients to professionals to draft the appropriate documents. If retirement income is an objective of the client, then part of the plan will be recommendations on how to meet the client’s retirement needs. The plan will be used for investment purposes where FLFS will make investment recommendations to help match each of the client’s goals and needs. When a client engages FLFS for investment management services, FLFS will do so on a discretionary basis. This means that while FLFS will continue an ongoing relationship with each client, being involved in various stages of their lives and decisions to be made, FLFS will not seek specific approval of changes to client accounts including the hiring and firing of third party managers. Clients will be asked to complete an Investment Advisory Agreement that outlines the responsibilities of both the client and FLFS. Assets Under Management As of June 16, 2025, FLFS has $142,196,357 total assets under management, with 250 accounts managed on a discretionary basis. Item 5: Fees and Compensation A. Fees Charged FLFS’ advisory fees range from 0.00% to 2.0% per annum of a client’s assets under management. Fees will be paid quarterly, in advance, and are calculated based on the market value of a client’s assets as of the last day in the previous billing period. Assets allocated to cash or a cash proxy, such as a money market account, will be included in the calculation of assets under management. 3  B. Fee Payment Investment advisory fees will be debited directly from each client’s account. If a client has an account with a third party asset manager, that manager will calculate their fees and directly debit from the clients account. In some cases, the manager will remit a portion of those fees to FLFS. In other cases, the manager will debit their fee and FLFS will debit its fee separately. Fees to third party managers are separate from and in addition to, the FLFS advisory fee. For accounts custodied at LPL Financial, the advisory fee is paid quarterly, in advance, and the value used for the fee calculation is the net value as of the last market day of the previous quarter, including any cash in the client’s account. To the extent there is cash in your account, it will be included in the value for the purpose of calculating fees only if the cash is part of an investment strategy. To the extent there is insufficient cash in your account to cover the cost of that quarter’s advisory fee, we will selectively sell securities in order to raise the necessary cash to pay the advisory fee. Once the calculation is made, we will instruct your account custodian to deduct the fee from your account. Dunham Standard Asset Allocation Program For clients participating in the Dunham Standard Asset Allocation Program (“SAAP”), the Client will be charged an annual asset based advisory fee of up to 2.00%. The asset based advisory fee is charged quarterly in arrears and is calculated based on the average daily net asset value of the account. The fees are deducted directly from the Client’s account or by ACH as directed by Client on the Dunham SAAP application. Fees are pro-rated and charged upon termination. In addition to the Asset Based Fee paid to FLFS, DAIC will charge 0.25% of the average daily net asset value of the account, as program sponsor, from the assets invested in DAIC proprietary funds as a distribution and service support fee. This fee is accrued daily and paid monthly. Fees shall be pro- rated and charged upon termination. Dunham Custom Asset Allocation Program Where appropriate, FLFS may recommend the use of the Custom Asset Allocation Program (“CAAP”) sponsored by Dunham & Associates Investment Counsel, Inc. (“DAIC”). This program has two fee options: The Performance Based Fee (“PBF”) option is only available to “qualified clients” as defined in the Investment Advisor Act of 1940 Rule 205-3, as such may be amended from time to time. FLFS will discuss with Client and determine if they qualify for the PBF option based on that rule and whether the CAAP PBF option is appropriate for the Client’s investment objectives. The performance based fee for the CAAP PBF option is currently 10% of the net increase in account value, adjusted for inflows and outflows, for the preceding month (or portion thereof, if less than a month), subject to a “high water mark”. DAIC will provide fee calculations on a quarterly basis. DAIC cand FLFS split the PBF equally. The Asset Based Fee option of the CAAP, whereby Client pays to FLFS an annual fee not to exceed 2.00%, based on the average daily balance of the account(s) during the billing period. The fee accrues daily, but is charged quarterly, in arrears. In addition to the Asset Based Fee charged by FLFS, DAIC also charges the Client a Program Fee of 4  0.25% which is calculated in the same manner as the Asset Based Fee. The Program Fee is paid to DAIC. All fees, whether for the PBF or Asset Based Fee or Program Fee are deducted directly from the Client account(s) or by ACH as directed by Client on the Dunham application by DAIC and then pays the amount of the total fees due to FLFS. Fees are pro-rated for partial billing periods. Because the fees are paid in arrears, to the extent Client terminates this Agreement during a quarter, it is unlikely that FLFS or DAIC will owe a rebate to the Client for any unearned fee. However, to the extent there ever is an unearned fee based on the number of days Client was a Client, it will be returned to Client on a pro rata basis. DAIC Conflict of Interest DAIC may pay a portion of its compensation to FLFS. This compensation varies from 5bps to 25bps and is based on the total dollar amount of assets held by FLFS in the PBF fee option and the asset based fee option. The Client does not pay more or less in fees as a result of this compensation. However, these payments create a conflict of interest by influencing FLFS to invest in the CAAP and utilize the PBF fee option. C. Other Fees There are a number of other fees that can be associated with holding and investing in securities. Expenses of a mutual fund or ETF will not be included in management fees, as they are deducted from the value of the shares by the manager. When selecting mutual funds that have multiple share classes for recommendation to clients, FLFS will take into account the internal fees and expenses associated with each share class, and it is FLFS policy to choose the lowest-cost share class available, absent circumstances that dictate otherwise. For complete discussion of expenses related to each mutual fund or ETF, you should read a copy of the prospectus issued by that fund. FLFS can provide or direct you to a copy of the prospectus for any fund that we recommend to you. Fees charged by independent third party managers are also separate and additional to any fees paid to FLFS, and such managers will be authorized to separately debit fees from client accounts. Please make sure to read Item 12 of this informational brochure, where we discuss broker-dealer and custodial issues. D. Pro-rata Fees If a client becomes a client during a quarter, they will pay a management fee for the number of days left in that quarter. If clients terminate the relationship during a quarter, they will be entitled to a refund of any management fees for the remainder of the quarter they may have prepaid. Once the notice of termination is received, FLFS will assess pro-rated fees for the number of days between the end of the prior billing period and the date of termination to be paid in whatever way clients direct (check, wire). FLFS will cease to perform services, including processing trades and distributions, upon termination. Assets not transferred from terminated accounts within 30 (thirty) days of termination may be “de-linked”, meaning they will no longer be visible to FLFS and will become a retail account with the custodian. E. Compensation for the Sale of Securities. FLFS does not accept compensation for the sale of securities or other investment products, including 5  asset-based sales charges or service fees from the sale of mutual funds. Item 6: Performance-Based Fees Where appropriate, FLFS may recommend the use of the Custom Asset Allocation Program (“CAAP”) sponsored by Dunham & Associates Investment Counsel, Inc. (“DAIC”). This program has two fee options: The Performance Based Fee (“PBF”) option is only available to “qualified clients” as defined in the Investment Advisor Act of 1940 Rule 205-3, as such may be amended from time to time. FLFS will discuss with Client and determine if they qualify for the PBF option based on that rule and whether the CAAP PBF option is appropriate for the Client’s investment objectives. The performance based fee for the CAAP PBF option is currently 10% of the net increase in account value, adjusted for inflows and outflows, for the preceding month (or portion thereof, if less than a month), subject to a “high water mark”. DAIC will provide fee calculations on a quarterly basis. DAIC cand FLFS split the PBF equally. The fee that FLFS is paid by DAIC is based on the capital appreciation of the assets in the account managed by DAIC. The Asset Based Fee option of the CAAP, whereby Client pays to FLFS an annual fee not to exceed 2.00%, based on the average daily balance of the account(s) during the billing period. The fee accrues daily, but is charged quarterly, in arrears. In addition to the Asset Based Fee charged by FLFS, DAIC also charges the Client a Program Fee of 0.25% which is calculated in the same manner as the Asset Based Fee. The Program Fee is paid to DAIC. All fees, whether for the PBF or Asset Based Fee or Program Fee are deducted directly from the Client account(s) or by ACH as directed by Client on the Dunham application by DAIC and then pays the amount of the total fees due to FLFS. Fees are pro-rated for partial billing periods. Because the fees are paid in arrears, to the extent Client terminates this Agreement during a quarter, it is unlikely that FLFS or DAIC will owe a rebate to the Client for any unearned fee. However, to the extent there ever is an unearned fee based on the number of days Client was a Client, it will be returned to Client on a pro rata basis. DAIC Conflict of Interest DAIC may pay a portion of its compensation to FLFS. This compensation varies from 5bps to 25bps and is based on the total dollar amount of assets held by FLFS in the PBF fee option. The Client does not pay more or less in fees as a result of this compensation. However, these payments create a conflict of interest by influencing FLFS to invest in the CAAP. FLFS attempts to mitigate this conflict of interest by disclosing it to the Client and having all persons associated with FLFS adhere to the firm’s Code of Ethics, which requires FLFS and all associated persons to act in the best interest of the client. Item 7: Types of Clients Clients advised may include individuals, families, trusts, charitable organizations and foundations, businesses, and pension plans. FLFS does not impose a stated minimum fee or minimum portfolio 6  value for starting or maintaining an investment advisory relationship. However, when FLFS recommends a third party manager, that manager can have account minimums. Item 8: Methods of Analysis, Investment Strategies and Risk of Loss It is important for you to know and remember that all investments carry risks. Investing in securities involves risk of loss that clients should be prepared to bear. Each client’s portfolio will be invested according to that client’s investment objectives, which are ascertained through the financial planning process or through a review of the existing plan. Once FLFS ascertains your objectives for each account, the appropriate securities or third party managers will be selected. The investment programs are not investment products. Clients may have different needs than others within the same investment program. Accordingly, not all clients in each investment program will have the exact same allocations or manager or sleeve used. The investment strategies that we recommend are based on the needs of the client as compared with the typical behavior of that security type or manager, current market conditions, the client’s current financial situation, financial goals, and the timeline to meet those goals, while emphasizing value and momentum within the market. Because we develop an investment strategy based on your personal situation and financial goals, your asset allocation guidelines may be similar to or different from another client. FLFS may periodically recommend changes to the investment strategies and client portfolios to meet the guidelines of the asset allocation for the program or an individual client’s objectives. It is important to remember that because market conditions can vary greatly, your asset allocation guidelines are not necessarily strict rules. Rather, accounts and portfolios are reviewed individually, and may deviate from the guidelines as FLFS believes necessary. When FLFS makes changes to an investment strategy, these changes may not be made simultaneously. Rather, some accounts may be modified before others. This may result in accounts being traded earlier inadvertently having an advantage over accounts traded later. Additionally, as assets are transitioned from a client’s prior advisors to FLFS, clients may hold legacy securities and may place restrictions on individual security types. Legacy securities are those that a client owned prior to or separate from its FLFS portfolio. If a client transitions mutual fund shares to FLFS that are not the lowest-cost share class, and FLFS is not recommending disposing of the security altogether, FLFS will attempt to convert such mutual fund share classes into the lowest-cost share classes the client is eligible for, taking into account any adverse tax consequences associated with such conversion. Third Party Managers As part of a client’s overall portfolio construction, FLFS can utilize other managers to assist in the management of client assets. These managers are selected by FLFS after a process whereby FLFS evaluates each manager’s investment performance, operations, and offerings to determine if the 7  manager would be a fit for FLFS clients. This process continues on an ongoing basis, throughout the time the client works with the third party manager. Dunham Standard Asset Allocation Program The Dunham Standard Asset Allocation Program is used by FLFS to manage assets in the Client’s account(s) by developing asset allocation recommendations based on FLFS’s assessment of the Client’s individual investment need and objectives, financial status, tax status, and risk profile. FLFS then exercises discretionary investment authority to implement the asset allocation recommendations by buying, selling, exchanging, or redeeming Dunham Funds Class A shares (load-waived) and/or certain non-proprietary mutual funds available under the Standard Asset Allocation Program. FLFS then monitors the allocation on an ongoing and regular basis and make changes as needed to meet client investment objectives. The asset allocation strategies/models offered to client accounts within the Dunham Standard Asset Allocation Program exclusively consist of various proprietary mutual funds sponsored by Dunham Funds, and that these particular mutual funds, or mutual funds with comparable investment strategies offered by other financial institutions, may otherwise also be available for purchase separately from the Standard Asset Allocation Program strategies/models, and potentially at lower costs to clients. Dunham Custom Asset Allocation Program Where appropriate, FLFS may recommend the use of the Custom Asset Allocation Program (“CAAP”) sponsored by Dunham & Associates Investment Counsel, Inc. (“DAIC”). The Dunham Custom Asset Allocation Program is used by FLFS to manage assets in the Client’s account(s) by developing asset allocation recommendations based on FLFS’s assessment of the Client’s individual investment need and objectives, financial status, tax status, and risk profile. FLFS then exercises discretionary investment authority to implement the asset allocation recommendations by buying, selling, exchanging, or redeeming Dunham Funds Class N shares and/or certain non-proprietary mutual funds available under the Custom Asset Allocation Program as well as stocks, bonds and any other financial contract or instrument FLFS deems appropriate for the allocation in order to meet the Client’s objectives. The asset allocation strategies/models offered to client accounts within the Dunham Custom Asset Allocation Program exclusively consist of various proprietary mutual funds sponsored by Dunham Funds, and that these particular mutual funds, or mutual funds with comparable investment strategies offered by other financial institutions, may otherwise also be available for purchase separately from the Custom Asset Allocation Program strategies/models, and potentially at lower costs to clients. Risk of Loss There are always risks to investing. Clients should be aware that all investments carry various types of risk including the potential loss of principal that clients should be prepared to bear. It is impossible to name all possible types of risks. Among the risks are the following:  Political Risks. Most investments have a global component, even domestic stocks. Political events anywhere in the world may have unforeseen consequences to markets around the world.  General Market Risks. Markets can, as a whole, go up or down on various news releases or for no understandable reason at all. This sometimes means that the price of specific securities could go up or down without real reason, and may take some time to recover any lost value. Adding additional securities does not help to minimize this risk since all securities may be affected by market fluctuations. 8   Currency Risk. When investing in another country using another currency, the changes in the value of the currency can change the value of your security value in your portfolio.  Regulatory Risk. Changes in laws and regulations from any government can change the value of a given company and its accompanying securities. Certain industries are more susceptible to government regulation. Changes in zoning, tax structure or laws impact the return on these investments.  Tax Risks Related to Short Term Trading: Clients should note that FLFS may engage in short- term trading transactions. These transactions may result in short term gains or losses for federal and state tax purposes, which may be taxed at a higher rate than long term strategies. FLFS endeavors to invest client assets in a tax efficient manner, but all clients are advised to consult with their tax professionals regarding the transactions in client accounts.  Purchasing Power Risk. Purchasing power risk is the risk that your investment’s value will decline as the price of goods rises (inflation). The investment’s value itself does not decline, but its relative value does, which is the same thing. Inflation can happen for a variety of complex reasons, including a growing economy and a rising money supply.  Business Risk. This can be thought of as certainty or uncertainty of income. Management comes under business risk. Cyclical companies (like automobile companies) have more business risk because of the less steady income stream. On the other hand, fast food chains tend to have steadier income streams and therefore, less business risk.  Financial Risk. The amount of debt or leverage determines the financial risk of a company.  Default Risk. This risk pertains to the ability of a company to service their debt. Ratings provided by several rating services help to identify those companies with more risk. Obligations of the U.S. government are said to be free of default risk.  Margin Risk. “Margin” is a tool used to maximize returns on a given investment by using securities in a client account as collateral for a loan from the custodian to the client. The proceeds of that loan are then used to buy more securities. Margin carries a higher degree of risk than investing without margin.  Short Sales. “Short sales” are a way to implement a trade in a security FLFS feels is overvalued. In a “long” trade, the investor is hoping the security increases in price. Thus, in a long trade, the amount of the investor’s loss (without margin) is the amount paid for the security. In a short sale, the investor is hoping the security decreases in price. However, unlike a long trade where the price of the security can only go from the purchase price to zero, in a short sale, the prince of the security can go infinitely upwards. Thus, in a short sale, the potential for loss is unlimited and unknown, where the potential for loss in a long trade is limited and knowable. FLFS utilizes short sales only when the client’s risk tolerances permit.  Risks specific to private placements, sub-advisors and other managers. If we invest some of your assets with another advisor, including a private placement, there are additional risks. These include risks that the other manager is not as qualified as we believe them to be, that the investments they use are not as liquid as we would normally use in your portfolio, or that their risk management guidelines are more liberal than we would normally employ.  Information Risk. All investment professionals rely on research in order to make conclusions about investment options. This research is always a mix of both internal (proprietary) and external (provided by third parties) data and analyses. Even an adviser who says they rely solely on proprietary research must still collect data from third parties. This data, or outside research is chosen for its perceived reliability, but there is no guarantee that the data or research will be completely accurate. Failure in data accuracy or research will translate to a compromised ability by the adviser to reach satisfactory investment conclusions.  Small Companies. Some investment opportunities in the marketplace involve smaller issuers. These companies may be starting up, or are historically small. While these companies sometimes have 9  potential for outsized returns, they also have the potential for losses because the reasons the company is small are also risks to the company’s future. For example, a company’s management may lack experience, or the company’s capital for growth may be restricted. These small companies also tend to trade less frequently that larger companies, which can add to the risks associated with their securities because the ability to sell them at an appropriate price may be limited compared to the markets as a whole. Not only do these companies have investment risk, if a client is invested in such small companies and requests immediate or short term liquidity, these securities may require a significant discount to value in order to be sold in a shorter time frame.  Concentration Risk. While FLFS selects individual securities, including mutual funds, for client portfolios based on an individualized assessment of each security, this evaluation comes without an overlay of general economic or sector specific issue analysis. This means that a client’s equity portfolio may be concentrated in a specific sector, geography, or sub-sector (among other types of potential concentrations), so that if an unexpected event occurs that affects that specific sector or geography, for example, the client’s equity portfolio may be affected negatively, including significant losses.  Transition Risk. As assets are transitioned from a client’s prior advisers to FLFS there may be securities and other investments that do not fit within the asset allocation strategy selected for the client. Accordingly, these investments will need to be sold in order to reposition the portfolio into the asset allocation strategy selected by FLFS. However, this transition process may take some time to accomplish. Some investments may not be unwound for a lengthy period of time for a variety of reasons that may include unwarranted low share prices, restrictions on trading, contractual restrictions on liquidity, or market-related liquidity concerns. In some cases, there may be securities or investments that are never able to be sold. The inability to transition a client's holdings into recommendations of FLFS may adversely affect the client's account values, as FLFS’s recommendations may not be able to be fully implemented.  Restriction Risk. Clients may at all times place reasonable restrictions on the management of their accounts. However, placing these restrictions may make managing the accounts more difficult, thus lowering the potential for returns.  Risks Related to Investment Term & Liquidity. Securities do not follow a straight line up in value. All securities will have periods of time when the current price of the security is not an accurate measure of its value. If you require us to liquidate your portfolio during one of these periods, you will not realize as much value as you would have had the investment had the opportunity to regain its value. Further, some investments are made with the intention of the investment appreciating over an extended period of time. Liquidating these investments prior to their intended time horizon may result in losses. Item 9: Disciplinary Information There are no disciplinary items to report. Item 10: Other Financial Industry Activities and Affiliations A. Broker-dealer Certain investment adviser representatives of FLFS are also associated with LPL Financial as broker-dealer registered representatives (“Dually Registered Persons”) effective May 3, 2025. In their capacity as registered representatives of LPL Financial, certain Dually Registered Persons may earn commissions for the sale of securities or investment products that they recommend for 10  brokerage clients. They do not earn commissions on the sale of securities or investment products recommended or purchased in advisory accounts through FLFS. Clients have the option of purchasing many of the securities and investment products we make available to you through another broker-dealer or investment adviser. However, when purchasing these securities and investment products away from FLFS, you will not receive the benefit of the advice and other services we provide. While LPL Financial does not participate in, or influence the formulation of, the investment advice FLFS provides, certain supervised persons of FLFS are Dually Registered Persons. Dually Registered Persons are restricted by certain FINRA rules and policies from maintaining client accounts at another custodian or executing client transactions in such client accounts through any broker-dealer or custodian that is not approved by LPL Financial. As a result, the use of other trading platforms must be approved not only by FLFS, but also by LPL Financial. Clients should also be aware that for accounts where LPL Financial serves as the custodian, FLFS is limited to offering services and investment vehicles that are approved by LPL Financial, and may be prohibited from offering services and investment vehicles that may be available through other broker-dealers and custodians, some of which may be more suitable for a client’s portfolio than the services and investment vehicles offered through LPL Financial. Clients should understand that not all investment advisers require that clients custody their accounts and trade through specific broker-dealers. Clients should also understand that LPL Financial is responsible under FINRA rules for supervising certain business activities of FLFS and its Dually Registered Persons that are conducted through broker-dealers and custodians other than LPL Financial. LPL Financial charges a fee for its oversight of activities conducted through these other broker-dealers and custodians. This arrangement presents a conflict of interest because FLFS has a financial incentive to recommend that you maintain your account with LPL Financial rather than with another broker- dealer or custodian to avoid incurring the oversight fee. If you would like a copy of the LPL Financial privacy policy, please contact FLFS at (585) 586- 2600. B. Futures Commission Merchant/Commodity Trading Advisor Neither the principals of FLFS, nor any related persons are registered, or have an application pending to register, as a futures commission merchant, commodity pool operator, a commodity trading advisor, or an associated person of the foregoing entities. C. Relationship with Related Persons Some advisors of FLFS are separately licensed as an independent insurance agents for purposes of servicing existing Clients that have insurance products. FLFS does not intend to sell new insurance products but has the ability to do so if warranted. As such, some advisors may conduct insurance product transactions for FLFS Clients in their capacity as licensed insurance agents and will receive customary commissions for these transactions in addition to any compensation received from advisory services. Commissions from the sale of insurance products will not be used to offset or as a credit against advisory fees. Some advisors of FLFS therefore have an incentive to recommend insurance products based on the compensation to be received. The receipt 11  of additional fees for insurance commissions is therefore a conflict of interest, and Clients should be aware of this conflict when considering whether to engage FLFS to implement any insurance recommendations. FLFS attempts to mitigate this conflict of interest by disclosing the conflict to Clients and informing the Clients that they are always free to purchase insurance products through other agents that are not affiliated with FLFS, or to determine not to purchase the insurance product at all. FLFS also attempts to mitigate the conflict of interest by requiring employees to acknowledge in the firm’s Code of Ethics, their individual fiduciary duty to the clients of FLFS, which requires that employees put the interests of Clients ahead of their own. D. Recommendations of Other Advisers As discussed in Item 8, FLFS may recommend the use of one or more third party managers. Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading A. A copy of our Code of Ethics is available upon request. Our Code of Ethics includes discussions of our fiduciary duty to clients, political contributions, gifts, entertainment, and trading guidelines. B. Not applicable. FLFS does not recommend to clients that they invest in any security in which FLFS or any principal thereof has any financial interest. C. On occasion, an employee of FLFS may purchase for his or her own account securities which are also recommended for clients. Our Code of Ethics details rules for employees regarding personal trading and avoiding conflicts of interest related to trading in one’s own account. To avoid placing a trade before a client (in the case of a purchase) or after a client (in the case of a sale), all employee trades are reviewed by the Compliance Officer. All employee trades must either take place in the same block as a client trade or sufficiently apart in time from the client trade so the employee receives no added benefit. Employee statements are reviewed to confirm compliance with the trading procedures. D. On occasion, an employee of FLFS may purchase for his or her own account securities which are also recommended for clients at the same time the clients purchase the securities. Our Code of Ethics details rules for employees regarding personal trading and avoiding conflicts of interest related to trading in one’s own account. To avoid placing a trade before a client (in the case of a purchase) or after a client (in the case of a sale), all employee trades are reviewed by the Compliance Officer. All employee trades must either take place in the same block as a client trade or sufficiently apart in time from the client trade so the employee receives no added benefit. Employee statements are reviewed to confirm compliance with the trading procedures. Item 12: Brokerage Practices A. Recommendation of Broker-Dealer The majority of client accounts will be held in custody with a variety of broker-dealers, each of which is recommended by the third party manager selected by FLFS. 12  If FLFS deems it appropriate for a specific client, FLFS will manage accounts directly, in which case FLFS will recommend LPL Financial as a custodian to maintain custody of clients’ assets and to effect trades for their accounts. FLFS and LPL Financial do not share common control, and are therefore not affiliated. LPL Financial provides brokerage and custodial services to independent investment advisory firms, including FLFS. For FLFS’s accounts custodied at LPL Financial, LPL Financial generally is compensated by clients through commissions, trails, or other transaction-based fees for trades that are executed through LPL Financial or that settle into LPL Financial accounts. For IRA accounts, LPL Financial generally charges account maintenance fees. In addition, LPL Financial also charges clients miscellaneous fees and charges, such as account transfer fees. LPL Financial charges FLFS an asset-based administration fee for administrative services provided by LPL Financial. Such administration fees are not directly borne by clients but may be taken into account when FLFS negotiates its advisory fee with clients. Clients should be aware that for accounts where LPL Financial serves as the custodian, FLFS is limited to offering services and investment vehicles that are approved by LPL Financial and may be prohibited from offering services and investment vehicles that may be available through other broker-dealers and custodians, some of which may be more suitable for a client’s portfolio than the services and investment vehicles offered through LPL Financial. Benefits Received by FLFS Personnel FLFS receives support services and/or products from LPL Financial, many of which assist FLFS to better monitor and service program accounts maintained at LPL Financial; however, some of the services and products benefit FLFS 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 compliance and/or practice management-related publications consulting services attendance at conferences, meetings, and other educational and/or social events marketing support other products and services used by FLFS 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 FLFS. 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 FLFS based on the overall relationship between FLFS 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. FLFS 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 FLFS 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 FLFS 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 FLFS to recommend that its clients use LPL Financial’s custodial platform rather than another custodian’s platform. 13  LPL Financial makes available to FLFS various products and services designed to assist FLFS in managing and administering client accounts. Many of these products and services may be used to service all or a substantial number of FLFS’s accounts, including accounts not held with LPL Financial. These include software and other technology that provide access to client account data (such as trade confirmation and account statements); facilitate trade execution (and aggregation and allocation of trade orders for multiple client accounts); provide research, pricing information and other market data; facilitate payment of FLFS’s fees from its clients’ accounts; and assist with back-office functions; recordkeeping and client reporting. LPL Financial also makes available to FLFS other services intended to help FLFS manage and further develop its business. Some of these services assist FLFS to better monitor and service program accounts maintained at LPL Financial, however, many of these services benefit only FLFS, for example, services that assist FLFS in growing its business. These support services and/or products may be provided without cost, at a discount, and/or at a negotiated rate, and include practice management-related publications; consulting services; attendance at conferences and seminars, meetings, and other educational and/or social events; marketing support; and other products and services used by FLFS in furtherance of the operation and development of its investment advisory business. Where such services are provided by a third-party vendor, LPL Financial will either make a payment to FLFS to cover the cost of such services, reimburse FLFS for the cost associated with the services, or pay the third-party vendor directly on behalf of FLFS. The products and services described above are provided to FLFS as part of its overall relationship with LPL Financial. While as a fiduciary FLFS endeavors to act in its clients’ best interests, the receipt of these benefits creates a conflict of interest because FLFS’s recommendation that clients custody their assets at LPL Financial is based in part on the benefit to FLFS of the availability of the foregoing products and services and not solely on the nature, cost or quality of custody or brokerage services provided by LPL Financial. FLFS’s receipt of some of these benefits may be based on the amount of advisory assets custodied on the LPL Financial platform. B. Aggregating Trades For accounts directly managed by FLFS, FLFS will, when advisable, aggregate client trades, which is when trades for multiple clients are put together in one transaction. This is done for operational efficiency and to ensure all clients receive the same price. It is possible, but unlikely, that aggregating trades will lower a commission cost. If an aggregate trade is not fully executed, the securities will be allocated to client accounts on a pro rata basis, except where doing so would create an unintended adverse consequence (For example, if a pro rata division would result in a client receiving a fraction of a share, or a position in the account of less than 1%.) Directed Brokerage FLFS does not allow clients to direct brokerage. “Directing” brokerage means choosing to maintain all or some of their assets with a broker-dealer that is not recommended by FLFS. FLFS may be unable to achieve most favorable execution of client transactions if clients choose to direct brokerage. This may cost clients’ money because without the ability to direct brokerage FLFS may not be able to aggregate orders to reduce transactions costs resulting in higher brokerage commissions and less favorable prices. 14  Item 13: Review of Accounts All accounts and corresponding financial plans will be managed on an ongoing basis, with formal reviews with the client by a representative of FLFS on at least an annual basis. However, it is expected that market conditions, changes in a particular client’s account, or changes to a client’s circumstances will trigger a review of accounts. The annual report in writing provided by FLFS is intended to review asset allocation. All clients will receive statements and confirmations of trades directly from the custodian. Please refer to Item 15 regarding Custody. Item 14: Client Referrals and Other Compensation A. Economic Benefit Provided by Third Parties for Advice Rendered to Client. Please refer to Item 12, where we discuss recommendation of Broker-Dealers. B. Compensation to Non-Advisory Personnel for Client Referrals. FLFS does not directly or indirectly compensate any person who is not advisory personnel for client referrals. Item 15: Custody FLFS has fees debited from client accounts, but would not otherwise have custody of client funds. Clients whose fees are directly debited will provide written authorization to debit advisory fees from their accounts held by the qualified custodian. Each month, the client will receive a statement from their account custodian showing all transactions in their account, including the fee. We encourage clients to carefully review the statements and confirmations sent to them by their custodian, and to compare the information on reports prepared by FLFS against the information in the statements provided directly from the custodian. Please alert us of any discrepancies. Item 16: Investment Discretion When FLFS is engaged to provide asset management services on a discretionary basis, we will monitor your accounts to ensure that they are meeting your asset allocation requirements. If any changes are needed to your investments or managers, we will make the changes. These changes may involve selling a security or group of investments and buying others or keeping the proceeds in cash. You may at any time place restrictions on the types of investments we may use on your behalf, or on the allocations to each security type. You may receive at your request written or electronic confirmations from your account custodian after any changes are made to your account. You will also receive statements at least quarterly from your account custodian. Clients engaging us on a discretionary basis will be asked to execute a Limited Power of Attorney (granting us the discretionary authority over the client accounts) as well as an Investment Advisory Agreement that outlines the responsibilities of both the client and FLFS. 15  Item 17: Voting Client Securities Copies of our Proxy Voting Policies are available upon request. From time to time, shareholders of stocks, mutual funds, exchange traded funds or other securities may be permitted to vote on various types of corporate actions. Examples of these actions include mergers, tender offers, or board elections. Clients are required to vote proxies related to their investments, or to choose not to vote their proxies. FLFS will not accept authority to vote client securities. Clients will receive their proxies directly from the custodian for the client account. FLFS will not give clients advice on how to vote proxies. Item 18: Financial Information FLFS does not require the prepayment of fees more than six (6) months or more in advance and therefore has not provided a balance sheet with this brochure. There are no material financial circumstances or conditions that would reasonably be expected to impair our ability to meet our contractual obligations to our clients. 16