Fonte Financial Advisors

Item 1: Cover Page Part 2A of Form ADV: Firm Brochure March 2026 RG Financial, LLC dba Fonte Financial Advisors 703 Palomar Airport Road, Suite 240 Carlsbad, CA 92011 www.fontefinancial.com Firm Contact: Justin Reckers Chief Compliance Officer This brochure provides information about the qualifications and business practices of RG Financial, LLC dba Fonte Financial Advisors. If clients have any questions about the contents of this brochure, please contact us at (858) 800-4176 ext. 101 or sandi@fontefinancial.com. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission or by any State Securities Authority. Additional information about our firm is also available on the SEC’s website at www.adviserinfo.sec.gov by searching CRD #311162. Please note that the use of the term “registered investment adviser” and description of our firm and/or our associates as “registered” does not imply a certain level of skill or training. Clients are encouraged to review this Brochure and Brochure Supplements for our firm’s associates who advise clients for more information on the qualifications of our firm and our employees.  Item 2: Material Changes Fonte Financial Advisors is required to notify clients of any information that has changed since the last annual update of the Firm Brochure (“Brochure”) that may be important to them. Clients can request a full copy of our Brochure or contact us with any questions that they may have about the changes. Since our firm’s last annual amendment filing on March 27, 2025, we have no material changes to disclose. ADV Part 2A – Firm Brochure Page 2 Fonte Financial Advisors, LLC  Item 3: Table of Contents ....................................................................................................................................... 1 ............................................................................................................................ 2 ............................................................................................................................ 3 .......................................................................................................................... 4 ..................................................................................................................... 7 ............................................................ 10 ................................................................................. 10 ...................................................... 10 .............................................................................................................. 16 .................................................................... 16 .............................................................................. 16 .................................................................................................. 16 ................................................................................................................... 17 ..................................................................................... 21 ................................................................................... 22 ....................................................................................................................................... 22 ............................................................................................................... 23 .............................................................................................................. 23 ................................................................................................................ 24 Item 1: Cover Page Item 2: Material Changes Item 3: Table of Contents Item 4: Advisory Business Item 5: Fees & Compensation Item 6: Performance-Based Fees & Side-By-Side Management Item 7: Types of Clients & Account Requirements Item 8: Methods of Analysis, Investment Strategies & Risk of Loss Item 9: Disciplinary Information Item 10: Other Financial Industry Activities & Affiliations Item 11: Code of Ethics, Participation or Interest in Client Transactions & Personal Trading Item 12: Brokerage Practices Item 13: Review of Accounts or Financial Plans Item 14: Client Referrals & Other Compensation Item 15: Custody Item 16: Investment Discretion Item 17: Voting Client Securities Item 18: Financial Information ADV Part 2A – Firm Brochure Page 3 Fonte Financial Advisors, LLC  Item 4: Advisory Business Our firm is dedicated to providing individuals and other types of clients with a wide array of investment advisory services. Our firm is a limited liability company formed under the laws of the State of California in 2015 and has been in business as an independent investment adviser since 2021. Our firm is owned by Justin Reckers and Sandra Bozanic. The purpose of this Brochure is to disclose the conflicts of interest associated with the investment transactions, compensation and any other matters related to investment decisions made by our firm or its representatives. As a fiduciary, it is our duty to always act in the client’s best interest. This is accomplished in part by knowing our client. Our firm has established a service-oriented advisory practice with open lines of communication for many different types of clients to help meet their financial goals while remaining sensitive to risk tolerance and time horizons. Working with clients to understand their investment objectives while educating them about our process, facilitates the kind of working relationship we value. Types of Advisory Services Offered Asset Management: As part of our Asset Management service, a portfolio is created, consisting of individual stocks, bonds, exchange traded funds (“ETFs”), options, mutual funds and other public and private securities or investments. The client’s individual investment strategy is tailored to their specific needs and may include some or all of the previously mentioned securities. Portfolios will be designed to meet a particular investment goal, determined to be suitable to the client’s circumstances. Once the appropriate portfolio has been determined, portfolios are continuously and regularly monitored, and if necessary, rebalanced based upon the client’s individual needs, stated goals and objectives. When deemed suitable for the client, our firm utilizes the sub-advisory services of a third-party investment advisory firm, separately managed account program, or sub-advisor (“Third-Party Manager(s)”) to aid in the implementation of an investment portfolio designed by our firm. Before selecting a firm or individual, our firm will ensure that the chosen party is properly licensed or registered. Our firm will periodically review Third-Party Manager(s)reports provided to the client at least annually. Our firm will contact clients from time to time in order to review their financial situation and objectives; communicate information to Third-Party Manager(s) as warranted; and, assist the client in understanding and evaluating the services provided by the Third-Party Manager(s). Clients will be expected to notify our firm of any changes in their financial situation, investment objectives, or account restrictions that could affect their financial standing. Comprehensive Portfolio Management: As part of our Comprehensive Portfolio Management service clients will be provided asset management and financial planning or consulting services. This service is designed to assist clients in meeting their financial goals through the use of a financial plan or consultation. Our firm conducts client meetings to understand their current financial situation, existing resources, financial goals, and tolerance for risk. Based on what is learned, an investment approach is presented to the client, consisting of individual stocks, bonds, ETFs, options, mutual funds and other public and private ADV Part 2A – Firm Brochure Page 4 Fonte Financial Advisors, LLC  securities or investments. Once the appropriate portfolio has been determined, portfolios are continuously and regularly monitored, and if necessary, rebalanced based upon the client’s individual needs, stated goals and objectives. Upon client request, our firm provides a summary of observations and recommendations for the planning or consulting aspects of this service. When deemed suitable for the client, our firm utilizes the sub-advisory services of a third-party investment advisory firm, separately managed account program, or sub-advisor (“Third-Party Manager(s)”) to aid in the implementation of an investment portfolio designed by our firm. Before selecting a firm or individual, our firm will ensure that the chosen party is properly licensed or registered. Our firm will periodically review Third-Party Manager(s)reports provided to the client at least annually. Our firm will contact clients from time to time in order to review their financial situation and objectives; communicate information to Third-Party Manager(s) as warranted; and, assist the client in understanding and evaluating the services provided by the Third-Party Manager(s). Clients will be expected to notify our firm of any changes in their financial situation, investment objectives, or account restrictions that could affect their financial standing. Financial Planning & Consulting: Our firm provides a variety of standalone financial planning and consulting services to clients for the management of financial resources based upon an analysis of current situation, goals, and objectives. Financial planning services will typically involve preparing a financial plan or rendering a financial consultation for clients based on the client’s financial goals and objectives. This planning or consulting may encompass Investment Planning, Retirement Planning, Estate Planning, Charitable Planning, Education Planning, Corporate and Personal Tax Planning, Cost Segregation Study, Corporate Structure, Real Estate Analysis, Mortgage/Debt Analysis, Insurance Analysis, Lines of Credit Evaluation, or Business and Personal Financial Planning. Written financial plans or financial consultations rendered to clients usually include general recommendations for a course of activity or specific actions to be taken by the clients. Implementation of the recommendations will be at the discretion of the client. Our firm provides clients with a summary of their financial situation, and observations for financial planning engagements. Financial consultations are not typically accompanied by a written summary of observations and recommendations, as the process is less formal than the planning service. Assuming that all the information and documents requested from the client are provided promptly, plans or consultations are typically completed within 6 months of the client signing a contract with our firm. Retirement Plan Consulting: Our firm provides retirement plan consulting services to employer plan sponsors on an ongoing basis. Generally, such consulting services consist of assisting employer plan sponsors in establishing, monitoring and reviewing their company's participant-directed retirement plan. As the needs of the plan sponsor dictate, areas of advising may include: • • Establishing an Investment Policy Statement – Our firm will assist in the development of a statement that summarizes the investment goals and objectives along with the broad strategies to be employed to meet the objectives. Investment Options – Our firm will work with the Plan Sponsor to evaluate existing investment options and make recommendations for appropriate changes. ADV Part 2A – Firm Brochure Page 5 Fonte Financial Advisors, LLC  • • • Asset Allocation and Portfolio Construction – Our firm will develop strategic asset allocation models to aid Participants in developing strategies to meet their investment objectives, time horizon, financial situation and tolerance for risk. Investment Monitoring – Our firm will monitor the performance of the investments and notify the client in the event of over/underperformance and in times of market volatility. Participant Education – Our firm will provide opportunities to educate plan participants about their retirement plan offerings, different investment options, and general guidance on allocation strategies. In providing services for retirement plan consulting, our firm does not provide any advisory services with respect to the following types of assets: employer securities, real estate (excluding real estate funds and publicly traded REITS), participant loans, non-publicly traded securities or assets, other illiquid investments, or brokerage window programs (collectively, “Excluded Assets”). All retirement plan consulting services shall be in compliance with the applicable state laws regulating retirement consulting services. This applies to client accounts that are retirement or other employee benefit plans (“Plan”) governed by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). If the client accounts are part of a Plan, and our firm accepts appointment to provide services to such accounts, our firm acknowledges its fiduciary standard within the meaning of Section 3(21) or 3(38) of ERISA as designated by the Retirement Plan Consulting Agreement with respect to the provision of services described therein. Tailoring of Advisory Services Our firm offers individualized investment advice to our Asset Management and Comprehensive Portfolio Management clients. General investment advice will be offered to our Financial Planning & Consulting and Retirement Plan Consulting clients. Each Asset Management and Comprehensive Portfolio Management client has the opportunity to place reasonable restrictions on the types of investments to be held in the portfolio. Restrictions on investments in certain securities or types of securities may not be possible due to the level of difficulty this would entail in managing the account. Participation in Wrap Fee Programs Our firm does not offer or sponsor a wrap fee program. Regulatory Assets Under Management As of December 31, 2025, our firm manages $157,498,285 in assets on a discretionary basis and $562,179 on a non-discretionary basis. ADV Part 2A – Firm Brochure Page 6 Fonte Financial Advisors, LLC  Item 5: Fees & Compensation Compensation for Our Advisory Services Asset Management: Assets Under Management Annual Percentage of Assets Charge First $500,000 1.5% Next $1,500,000 (up to $2,000,000) 1.0% Next $3,000,000 (up to $5,000,000) 0.9% Over $5,000,000 0.7% Fees to be assessed will be outlined in the advisory agreement to be signed by the Client. Our firm bills on cash unless indicated otherwise in writing. Annualized fees are billed on a pro-rata basis quarterly in advance based on the value of the account(s) on the last day of the previous quarter. Fees are negotiable and will be deducted from client account(s). Adjustments will be made for deposits and withdrawals during the quarter. Our firm does not offer direct invoicing. As part of this process, Our firm may recommend the services of separately managed accounts, sub-advisors, and or third- party money managers (“Third-Party Manager(s)”). The Third-Party Manager(s) fees are separate from and in addition to our firm’s fees. The maximum fee charged by Third-Party Manager(s) will not exceed 0.50%. Therefore, the combined maximum fee for clients utilizing Third-Party Manager(s) and our firm’s fees will not exceed 2.00%. Exact fees and fee-paying arrangements charged by Third- Party Manager(s) will be disclosed either in the Third-Party Manager(s) advisory agreement (if separate from our firm’s), Firm Brochure, or other disclosure document(s). The Third-Party Manager(s) fees will be deducted directly from the clients’ account. Clients understand the following: a) b) c) The client’s independent custodian sends statements at least quarterly showing the market values for each security included in the Assets and all account disbursements, including the amount of the advisory fees paid to our firm; Clients will provide authorization permitting our firm to be directly paid by these terms. Our firm will send an invoice directly to the custodian; and If our firm sends a copy of our invoice to the client, a legend urging the comparison of information provided in our statement with those from the qualified custodian will be included. Comprehensive Portfolio Management: Assets Under Management Annual Percentage of Assets Charge First $500,000 Next $1,500,000 (up to $2,000,000) Next $3,000,000 (up to $5,000,000) Over $5,000,000 1.5% 1.0% 0.9% 0.7% ADV Part 2A – Firm Brochure Page 7 Fonte Financial Advisors, LLC  Fees to be assessed will be outlined in the advisory agreement to be signed by the Client. Our firm bills on cash unless indicated otherwise in writing. Annualized fees are billed on a pro-rata basis quarterly in advance based on the value of the account(s) on the last day of the previous quarter. Fees are negotiable and will be deducted from client account(s). Adjustments will be made for deposits and withdrawals during the quarter. Our firm requires a minimum account balance of $250,000 to open and maintain an account for our Comprehensive Portfolio Management service. Please note we reserve the right to waive the minimum AUM at our firm’s sole discretion. Our firm does not offer direct invoicing. As part of this process, Clients understand the following: Our firm may recommend the services of separately managed accounts, sub-advisors, and or third- party money managers (“Third-Party Manager(s)”). The Third-Party Manager(s) fees are separate from and in addition to our firm’s fees. The maximum fee charged by Third-Party Manager(s) will not exceed 0.50%. Therefore, the combined maximum fee for clients utilizing Third-Party Manager(s) and our firm’s fees will not exceed 2.00%. Exact fees and fee-paying arrangements charged by Third- Party Manager(s) will be disclosed in either the Third-Party Manager(s) advisory agreement (if separate from our firm’s), Firm Brochure, or other disclosure document(s). The Third-Party Manager(s) fees will be deducted directly from the clients’ account. Our firm does not receive a portion of these fees and the Third-Party Manager(s) fees do not have any bearing on the fee our firm charges for our services. a) b) c) The client’s independent custodian sends statements at least quarterly showing the market values for each security included in the Assets and all account disbursements, including the amount of the advisory fees paid to our firm; Clients will provide authorization permitting our firm to be directly paid by these terms. Our firm will send an invoice directly to the custodian; and If our firm sends a copy of our invoice to the client, a legend urging the comparison of information provided in our statement with those from the qualified custodian will be included. Financial Planning & Consulting: Our firm charges on an hourly or flat fee basis for financial planning and consulting services. The total estimated fee, as well as the ultimate fee charged, is based on the scope and complexity of our engagement with the client. The maximum hourly fee to be charged will not exceed $325. Flat fees will not exceed $10,000. There are several fee-paying options for clients: payment in full upon execution of the agreement, payment of a retainer of 50% of the ultimate planning or consulting fee at the time of signing, or payment in advance of fees assessed hourly. The remainder of the fee will be directly billed to the client and due within 30 days of a financial plan being delivered or consultation rendered. Our firm will not require a retainer exceeding $500 when services cannot be rendered within 6 months. Retirement Plan Consulting: Our Retirement Plan Consulting services are billed on a fee based on the percentage of Plan assets under management. The total estimated fee, as well as the ultimate fee charged, is based on the scope and complexity of our engagement with the client. These fees will not exceed 1%. The fee-paying arrangements will be determined on a case-by-case basis and will be detailed in the signed consulting agreement. ADV Part 2A – Firm Brochure Page 8 Fonte Financial Advisors, LLC  Other Types of Fees & Expenses Clients will incur transaction fees for trades executed by their chosen custodian, either based on a percentage of the dollar amount of assets in the account(s) or via individual transaction charges. These transaction fees are separate from our firm’s advisory fees and will be disclosed by the chosen custodian. Charles Schwab & Co., Inc. (“Schwab”) does not charge transaction fees for U.S. listed equities and exchange traded funds. Clients may also pay holdings charges imposed by the chosen custodian for certain investments, charges imposed directly by a mutual fund, index fund, or exchange traded fund, which shall be disclosed in the fund’s prospectus (e.g., fund management fees, distribution fees, surrender charges, variable annuity fees, IRA and qualified retirement plan fees, mark-ups and mark-downs, spreads paid to market makers, fees for trades executed away from custodian, wire transfer fees and other fees and taxes on brokerage accounts and securities transactions). Our firm does not receive a portion of these fees. Vise AI Advisors, LLC: For clients within our Asset Management and Comprehensive Portfolio Management services that utilize Vise AI Advisors, LLC (“Vise”), clients may pay an additional fee for Vise’s services. Vise charges quarterly in arrears, and now charges based on a tiered fee schedule. Please see the tier schedule below as well as within the signed advisory agreement. For additional information or questions regarding Vise’s services & fees, please reach out to our firm or advisors. Platform AUM $0 - $9,999,999.99 $10,000,000 - $24,999,999.99 $25,000,000 - $49,999,999.99 $50,000,000 - $74,999,999.99 $75,000,000 - $99,999,999.99 $100,000,000 - $149,999,999.99 $150,000,000 and above Flat Fee Applied 0.35% 0.33% 0.31% 0.29% 0.27% 0.25% Negotiable Termination & Refunds Either party may terminate the advisory agreement signed with our firm for Asset Management and Comprehensive Portfolio Management services in writing at any time. Upon notice of termination our firm will process a pro-rata refund of the unearned portion of the advisory fees charged in advance. Financial Planning & Consulting clients may terminate their agreement at any time before the delivery of a financial plan by providing written notice. For purposes of calculating refunds, all work performed by us up to the point of termination shall be calculated at the hourly fee currently in effect. Clients will receive a pro-rata refund of unearned fees based on the time and effort expended by our firm. ADV Part 2A – Firm Brochure Page 9 Fonte Financial Advisors, LLC  Either party to a Retirement Plan Consulting Agreement may terminate at any time by providing written notice to the other party. Full refunds will only be made in cases where cancellation occurs within 5 business days of signing an agreement. After 5 business days from initial signing, either party must provide the other party 30 days written notice to terminate billing. Billing will terminate 30 days after receipt of termination notice. Clients will be charged on a pro-rata basis, which takes into account work completed by our firm on behalf of the client. Clients will incur charges for bona fide advisory services rendered up to the point of termination (determined as 30 days from receipt of said written notice) and such fees will be due and payable. Commissionable Securities Sales Our firm and representatives do not sell securities for a commission in advisory accounts. Item 6: Performance-Based Fees & Side-By-Side Management Our firm does not charge performance-based fees. Item 7: Types of Clients & Account Requirements Our firm has the following types of clients: • • • Individuals and High Net Worth Individuals; Trusts, Estates or Charitable Organizations; Pension and Profit-Sharing Plans; Our firm requires a minimum account balance of $250,000 to open and maintain an account for our Comprehensive Portfolio Management service. We reserve the right to waive the minimum AUM at our firm’s sole discretion. Item 8: Methods of Analysis, Investment Strategies & Risk of Loss Methods of Analysis We use the following methods of analysis in formulating our investment advice and/or managing client assets: Charting: In this type of technical analysis, our firm reviews charts of market and security activity in an attempt to identify when the market is moving up or down and to predict how long the trend may last and when that trend might reverse. Cyclical Analysis: Statistical analysis of specific events occurring at a sufficient number of relatively predictable intervals that they can be forecasted into the future. Cyclical analysis asserts that cyclical forces drive price movements in the financial markets. Risks include that cycles may invert or disappear and there is no expectation that this type of analysis will pinpoint turning points, instead be used in conjunction with other methods of analysis. Fundamental Analysis: The analysis of a business's financial statements (usually to analyze the business's assets, liabilities, and earnings), health, and its competitors and markets. When analyzing a stock, futures contract, or currency using fundamental analysis there are two basic approaches one ADV Part 2A – Firm Brochure Page 10 Fonte Financial Advisors, LLC  can use: bottom up analysis and top down analysis. The terms are used to distinguish such analysis from other types of investment analysis, such as quantitative and technical. Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts. There are several possible objectives: (a) to conduct a company stock valuation and predict its probable price evolution; (b) to make a projection on its business performance; (c) to evaluate its management and make internal business decisions; (d) and/or to calculate its credit risk.; and (e) to find out the intrinsic value of the share. When the objective of the analysis is to determine what stock to buy and at what price, there are two basic methodologies investors rely upon: (a) Fundamental analysis maintains that markets may misprice a security in the short run but that the "correct" price will eventually be reached. Profits can be made by purchasing the mispriced security and then waiting for the market to recognize its "mistake" and reprice the security.; and (b) Technical analysis maintains that all information is reflected already in the price of a security. Technical analysts analyze trends and believe that sentiment changes predate and predict trend changes. Investors' emotional responses to price movements lead to recognizable price chart patterns. Technical analysts also analyze historical trends to predict future price movement. Investors can use one or both of these different but complementary methods for stock picking. This presents a potential risk, as the price of a security can move up or down along with the overall market regardless of the economic and financial factors considered in evaluating the stock. Third-Party Money Manager Analysis: The analysis of the experience, investment philosophies, and past performance of independent third-party investment managers in an attempt to determine if that manager has demonstrated an ability to invest over a period of time and in different economic conditions. Analysis is completed by monitoring the manager’s underlying holdings, strategies, concentrations and leverage as part of our overall periodic risk assessment. Additionally, as part of the due-diligence process, the manager’s compliance and business enterprise risks are surveyed and reviewed. A risk of investing with a third-party manager who has been successful in the past is that they may not be able to replicate that success in the future. In addition, as our firm does not control the underlying investments in a third-party manager’s portfolio, there is also a risk that a manager may deviate from the stated investment mandate or strategy of the portfolio, making it a less suitable investment for our clients. Moreover, as our firm does not control the manager’s daily business and compliance operations, our firm may be unaware of the lack of internal controls necessary to prevent business, regulatory or reputational deficiencies. Quantitative Analysis: The use of models, or algorithms, to evaluate assets for investment. The process usually consists of searching vast databases for patterns, such as correlations among liquid assets or price-movement patterns (trend following or mean reversion). The resulting strategies may involve high-frequency trading. The results of the analysis are taken into consideration in the decision to buy or sell securities and in the management of portfolio characteristics. A risk in using quantitative analysis is that the methods or models used may be based on assumptions that prove to be incorrect. Qualitative Analysis: A securities analysis that uses subjective judgment based on unquantifiable information, such as management expertise, industry cycles, strength of research and development, and labor relations. Qualitative analysis contrasts with quantitative analysis, which focuses on numbers that can be found on reports such as balance sheets. The two techniques, however, will often be used together in order to examine a company's operations and evaluate its potential as an investment opportunity. Qualitative analysis deals with intangible, inexact concerns that belong to the social and experiential realm rather than the mathematical one. This approach depends on the ADV Part 2A – Firm Brochure Page 11 Fonte Financial Advisors, LLC  kind of intelligence that machines (currently) lack, since things like positive associations with a brand, management trustworthiness, customer satisfaction, competitive advantage and cultural shifts are difficult, arguably impossible, to capture with numerical inputs. A risk in using qualitative Sector Analysis analysis is that subjective judgment may prove incorrect. : Sector analysis involves identification and analysis of various industries or economic sectors that are likely to exhibit superior performance. Academic studies indicate that the health of a stock's sector is as important as the performance of the individual stock itself. In other words, even the best stock located in a weak sector will often perform poorly because that sector is out of favor. Each industry has differences in terms of its customer base, market share among firms, industry growth, competition, regulation and business cycles. Learning how the industry operates provides a deeper understanding of a company's financial health. One method of analyzing a company's growth potential is examining whether the amount of customers in the overall market is expected to grow. In some markets, there is zero or negative growth, a factor demanding careful consideration. Additionally, market analysts recommend that investors should monitor sectors that are nearing the bottom of performance rankings for possible signs of an impending turnaround. Technical Analysis: A security analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume. A fundamental principle of technical analysis is that a market's price reflects all relevant information, so their analysis looks at the history of a security's trading pattern rather than external drivers such as economic, fundamental and news events. Therefore, price action tends to repeat itself due to investors collectively tending toward patterned behavior – hence technical analysis focuses on identifiable trends and conditions. Technical analysts also widely use market indicators of many sorts, some of which are mathematical transformations of price, often including up and down volume, advance/decline data and other inputs. These indicators are used to help assess whether an asset is trending, and if it is, the probability of its direction and of continuation. Technicians also look for relationships between price/volume indices and market indicators. Technical analysis employs models and trading rules based on price and volume transformations, such as the relative strength index, moving averages, regressions, inter-market and intra-market price correlations, business cycles, stock market cycles or, classically, through recognition of chart patterns. Technical analysis is widely used among traders and financial professionals and is very often used by active day traders, market makers and pit traders. The risk associated with this type of analysis is that analysts use subjective judgment to decide which pattern(s) a particular instrument reflects at a given time and what the interpretation of that pattern should be. Investment Strategies We Use We use the following strategies in managing client accounts, provided that such strategies are appropriate to the needs of the client and consistent with the client's investment objectives, risk tolerance, and time horizons, among other considerations: Asset Allocation : The implementation of an investment strategy that attempts to balance risk versus reward by adjusting the percentage of each asset in an investment portfolio according to the investor's risk tolerance, goals and investment time frame. Asset allocation is based on the principle that different assets perform differently in different market and economic conditions. A fundamental justification for asset allocation is the notion that different asset classes offer returns that are not perfectly correlated, hence diversification reduces the overall risk in terms of the variability of returns for a given level of expected return. Although risk is reduced as long as correlations are not perfect, it is typically forecast (wholly or in part) based on statistical relationships (like correlation ADV Part 2A – Firm Brochure Page 12 Fonte Financial Advisors, LLC  and variance) that existed over some past period. Expectations for return are often derived in the same way. An asset class is a group of economic resources sharing similar characteristics, such as riskiness and return. There are many types of assets that may or may not be included in an asset allocation strategy. The "traditional" asset classes are stocks (value, dividend, growth, or sector-specific [or a "blend" of any two or more of the preceding]; large-cap versus mid-cap, small-cap or micro-cap; domestic, foreign [developed], emerging or frontier markets), bonds (fixed income securities more generally: investment-grade or junk [high-yield]; government or corporate; short-term, intermediate, long- term; domestic, foreign, emerging markets), and cash or cash equivalents. Allocation among these three provides a starting point. Usually included are hybrid instruments such as convertible bonds and preferred stocks, counting as a mixture of bonds and stocks. Other alternative assets that may be considered include: commodities: precious metals, nonferrous metals, agriculture, energy, others.; Commercial or residential real estate (also REITs); Collectibles such as art, coins, or stamps; insurance products (annuity, life settlements, catastrophe bonds, personal life insurance products, etc.); derivatives such as long-short or market neutral strategies, options, collateralized debt, and futures; foreign currency; venture capital; private equity; and/or distressed securities. There are several types of asset allocation strategies based on investment goals, risk tolerance, time frames and diversification. The most common forms of asset allocation are: strategic, dynamic, tactical, and core-satellite. • • • • Strategic Asset Allocation: The primary goal of a strategic asset allocation is to create an asset mix that seeks to provide the optimal balance between expected risk and return for a long- term investment horizon. Generally speaking, strategic asset allocation strategies are agnostic to economic environments, i.e., they do not change their allocation postures relative to changing market or economic conditions. Dynamic Asset Allocation: Dynamic asset allocation is similar to strategic asset allocation in that portfolios are built by allocating to an asset mix that seeks to provide the optimal balance between expected risk and return for a long-term investment horizon. Like strategic allocation strategies, dynamic strategies largely retain exposure to their original asset classes; however, unlike strategic strategies, dynamic asset allocation portfolios will adjust their postures over time relative to changes in the economic environment. Tactical Asset Allocation: Tactical asset allocation is a strategy in which an investor takes a more active approach that tries to position a portfolio into those assets, sectors, or individual stocks that show the most potential for perceived gains. While an original asset mix is formulated much like strategic and dynamic portfolio, tactical strategies are often traded more actively and are free to move entirely in and out of their core asset classes Core-Satellite Asset Allocation: Core-Satellite allocation strategies generally contain a 'core' strategic element making up the most significant portion of the portfolio, while applying a dynamic or tactical 'satellite' strategy that makes up a smaller part of the portfolio. In this way, core-satellite allocation strategies are a hybrid of the strategic and dynamic/tactical allocation strategies mentioned above. Fixed Income: Fixed income is a type of investing or budgeting style for which real return rates or periodic income is received at regular intervals and at reasonably predictable levels. Fixed-income investors are typically retired individuals who rely on their investments to provide a regular, stable income stream. This demographic tends to invest heavily in fixed-income investments because of the reliable returns they offer. Fixed-income investors who live on set amounts of periodically paid income face the risk of inflation eroding their spending power. ADV Part 2A – Firm Brochure Page 13 Fonte Financial Advisors, LLC  Some examples of fixed-income investments include treasuries, money market instruments, corporate bonds, asset-backed securities, municipal bonds and international bonds. The primary risk associated with fixed-income investments is the borrower defaulting on his payment. Other considerations include exchange rate risk for international bonds and interest rate risk for longer- dated securities. The most common type of fixed-income security is a bond. Bonds are issued by federal governments, local municipalities and major corporations. Fixed-income securities are recommended for investors seeking a diverse portfolio; however, the percentage of the portfolio dedicated to fixed income depends on your own personal investment style. There is also an opportunity to diversify the fixed-income component of a portfolio. Riskier fixed-income products, such as junk bonds and longer-dated products, should comprise a lower percentage of your overall portfolio. The interest payment on fixed-income securities is considered regular income and is determined based on the creditworthiness of the borrower and current market rates. In general, bonds and fixed- income securities with longer-dated maturities pay a higher rate, also referred to as the coupon rate, because they are considered riskier. The longer the security is on the market, the more time it has to lose its value and/or default. At the end of the bond term, or at bond maturity, the borrower returns the amount borrowed, also referred to as the principal or par value. Long-Term Purchases: Our firm may buy securities for your account and hold them for a relatively long time (more than a year) in anticipation that the security’s value will appreciate over a long horizon. The risk of this strategy is that our firm could miss out on potential short-term gains that could have been profitable to your account, or it’s possible that the security’s value may decline sharply before our firm makes a decision to sell. Risk of Loss Investing in securities involves risk of loss that clients should be prepared to bear. While the stock market may increase and the account(s) could enjoy a gain, it is also possible that the stock market may decrease, and the account(s) could suffer a loss. It is important that clients understand the risks associated with investing in the stock market, and that their assets are appropriately diversified in investments. Clients are encouraged to ask our firm any questions regarding their risk tolerance. Capital Risk: Capital risk is one of the most basic, fundamental risks of investing; it is the risk that you may lose 100% of your money. All investments carry some form of risk and the loss of capital is generally a risk for any investment instrument. Company Risk: When investing in stock positions, there is always a certain level of company or industry specific risk that is inherent in each investment. This is also referred to as unsystematic risk and can be reduced through appropriate diversification. There is the risk that the company will perform poorly or have its value reduced based on factors specific to the company or its industry. For example, if a company’s employees go on strike or the company receives unfavorable media attention for its actions, the value of the company may be reduced. Fixed Income Securities Risk: Typically, the values of fixed-income securities change inversely with prevailing interest rates. Therefore, a fundamental risk of fixed-income securities is interest rate risk, which is the risk that their value will generally decline as prevailing interest rates rise, which may cause your account value to likewise decrease, and vice versa. How specific fixed income securities may react to changes in interest rates will depend on the specific characteristics of each security. Fixed-income securities are also subject to credit risk, prepayment risk, valuation risk, and liquidity ADV Part 2A – Firm Brochure Page 14 Fonte Financial Advisors, LLC  risk. Credit risk is the chance that a bond issuer will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of a bond to decline. Economic Risk: The prevailing economic environment is important to the health of all businesses. Some companies, however, are more sensitive to changes in the domestic or global economy than others. These types of companies are often referred to as cyclical businesses. Countries in which a large portion of businesses are in cyclical industries are thus also very economically sensitive and carry a higher amount of economic risk. If an investment is issued by a party located in a country that experiences wide swings from an economic standpoint or in situations where certain elements of an investment instrument are hinged on dealings in such countries, the investment instrument will generally be subject to a higher level of economic risk. Inflation Risk : Inflation risk involves the concern that in the future, your investment or proceeds from your investment will not be worth what they are today. Throughout time, the prices of resources and end-user products generally increase and thus, the same general goods and products today will likely be more expensive in the future. The longer an investment is held, the greater the chance that the proceeds from that investment will be worth less in the future than what they are today. Said another way, a dollar tomorrow will likely get you less than what it can today. Market Risk: The value of your portfolio may decrease if the value of an individual company or multiple companies in the portfolio decreases or if our belief about a company’s intrinsic worth is incorrect. Further, regardless of how well individual companies perform, the value of your portfolio could also decrease if there are deteriorating economic or market conditions. It is important to understand that the value of your investment may fall, sometimes sharply, in response to changes in the market, and you could lose money. Investment risks include price risk as may be observed by a drop in a security’s price due to company specific events (e.g. earnings disappointment or downgrade in the rating of a bond) or general market risk (e.g. such as a “bear” market when stock values fall in general). For fixed-income securities, a period of rising interest rates could erode the value of a bond since bond values generally fall as bond yields go up. Past performance is not a guarantee of future returns. Past Performance: Charting and technical analysis are often used interchangeably. Technical analysis generally attempts to forecast an investment’s future potential by analyzing its past performance and other related statistics. In particular, technical analysis often times involves an evaluation of historical pricing and volume of a particular security for the purpose of forecasting where future price and volume figures may go. As with any investment analysis method, technical analysis runs the risk of not knowing the future and thus, investors should realize that even the most diligent and thorough technical analysis cannot predict or guarantee the future performance of any particular investment instrument or issuer thereof. Description of Material, Significant or Unusual Risks Our firm generally invests client cash balances in money market funds, FDIC Insured Certificates of Deposit, high-grade commercial paper and/or government backed debt instruments. Ultimately, our firm tries to achieve the highest return on client cash balances through relatively low-risk conservative investments. In most cases, at least a partial cash balance will be maintained in a money market account so that our firm may debit advisory fees for our services related to our Asset Management and Comprehensive Portfolio Management as applicable. ADV Part 2A – Firm Brochure Page 15 Fonte Financial Advisors, LLC  Item 9: Disciplinary Information There are no legal or disciplinary events that are material to the evaluation of our advisory business or the integrity of our management. Item 10: Other Financial Industry Activities & Affiliations Our firm is not registered, nor does it have an application pending to register, as a broker-dealer, registered representative of a broker dealer, investment company or pooled investment vehicle, other investment adviser or financial planner, futures commission merchant, commodity pool operator, commodity trading advisor, banking or thrift institution, accountant or accounting firm, lawyer or law firm, insurance company or agency, pension consultant, real estate broker or dealer or a sponsor or syndicator of limited partnership, or an associated person of the foregoing entities. Our firm’s Representatives are also owners and proprietors of PKS Enterprises and Reckers Group, LLC separate entities both d/b/a Wellspring Divorce Advisors and Pac Divorce Inc., respectively. Services provided to clients of these entities are separate from services provided by Fonte Financial. These entities specialize in Divorce Financial Planning and forensic accounting regarding divorce proceedings. Clients of Fonte Financial may be solicited to receive services from the aforementioned entities, but are under no obligation to engage, nor receive these services. To mitigate this conflict of interest, our firm’s representatives will always act in the client’s best interest. We have entered into a Platform and Subadvisory Agreement with Vise AI Advisors, LLC (“Vise”) and have received promotional pricing as part of that agreement. Vise agreed to waive its Platform Fee if we appoint Vise to manage our clients’ accounts exceeding $10 million in the aggregate within 120 days of the Effective Date of the agreement we entered into with Vise. After the promotional period or in the event we do not meet the $10 million threshold within the 120 day period, the fees that we agreed to pay Vise will become payable. This arrangement creates a conflict of interest because we have an incentive to recommend Vise to you for their subadvisory services or engage Vise using our investment discretion in order to receive the promotional pricing for us and our clients. This conflict is potentially greater if we appoint Vise to manage any of the following client accounts—our firm’s accounts, the accounts of our owners, employees, or any of their family members (“Affiliated Accounts”). We do not plan on recommending or using Affiliated Accounts to reach the promotional pricing threshold. There is no limitation on the number of accounts or amount of assets that we can appoint Vise to manage. We address these conflicts of interest by disclosing them to clients and providing clients with the ability to opt out of our ability to engage Vise to manage their account. Although clients will be not automatically opted in, clients wishing to expressively opt out should contact us at 858-800-4176 ext. 101. Item 11: Code of Ethics, Participation or Interest in Client Transactions & Personal Trading As a fiduciary, it is an investment adviser’s responsibility to provide fair and full disclosure of all material facts and to act solely in the best interest of each of our clients at all times. Our fiduciary duty is the underlying principle for our firm’s Code of Ethics, which includes procedures for personal securities transaction and insider trading. Our firm requires all representatives to conduct business with the highest level of ethical standards and to comply with all federal and state securities laws at all times. Upon employment with our firm, and at least annually thereafter, all representatives of our firm will ADV Part 2A – Firm Brochure Page 16 Fonte Financial Advisors, LLC  acknowledge receipt, understanding and compliance with our firm’s Code of Ethics. Our firm and representatives must conduct business in an honest, ethical, and fair manner and avoid all circumstances that might negatively affect or appear to affect our duty of complete loyalty to all clients. This disclosure is provided to give all clients a summary of our Code of Ethics. If a client or a potential client wishes to review our Code of Ethics in its entirety, a copy will be provided promptly upon request. Our firm recognizes that the personal investment transactions of our representatives demands the application of a Code of Ethics with high standards and requires that all such transactions be carried out in a way that does not endanger the interest of any client. At the same time, our firm also believes that if investment goals are similar for clients and for our representatives, it is logical, and even desirable, that there be common ownership of some securities. 1 In order to prevent conflicts of interest, our firm has established procedures for transactions effected by . In order to monitor compliance with our personal our representatives for their personal accounts trading policy, our firm has pre-clearance requirements and a quarterly securities transaction reporting system for all of our representatives. Neither our firm nor a related person recommends, buys or sells for client accounts, securities in which our firm or a related person has a material financial interest without prior disclosure to the client. Related persons of our firm may buy or sell securities and other investments that are also recommended to clients. In order to minimize this conflict of interest, our related persons will place client interests ahead of their own interests and adhere to our firm’s Code of Ethics, a copy of which is available upon request. Likewise, related persons of our firm buy or sell securities for themselves at or about the same time they buy or sell the same securities for client accounts. In order to minimize this conflict of interest, our related persons will place client interests ahead of their own interests and adhere to our firm’s Code of Ethics, a copy of which is available upon request. Further, our related persons will refrain from buying or selling the same securities prior to buying or selling for our clients in the same day unless included in a block trade. Item 12: Brokerage Practices Custodian & Brokers Used Item 15 Our firm does not maintain custody of client assets (although our firm may be deemed to have Custody custody of client assets if give the authority to withdraw assets from client accounts. See , below). Client assets must be maintained in an account at a “qualified custodian,” generally a broker-dealer or bank. Our firm recommends that clients use the Schwab Advisor Services division of Charles Schwab & Co. Inc. (“Schwab”) and Nationwide Securities, LLC (“Nationwide”), also referred to as “the custodians”, a FINRA-registered broker-dealer, member SIPC, as the qualified custodians. Our firm is independently owned and operated, and not affiliated with the custodians. The custodians will hold client assets in a brokerage account and buy and sell securities when instructed. While our 1 For purposes of the policy, our associate’s personal account generally includes any account (a) in the name of our associate, his/her spouse, his/her minor children or other dependents residing in the same household, (b) for which our associate is a trustee or executor, or (c) which our associate controls, including our client accounts which our associate controls and/or a member of his/her household has a direct or indirect beneficial interest in. ADV Part 2A – Firm Brochure Page 17 Fonte Financial Advisors, LLC  firm recommends that clients use the custodians as custodian/broker, clients will decide whether to do so and open an account with the custodians by entering into an account agreement directly with them. Our firm does not open the account. Even though the account is maintained at the custodians, our firm can still use other brokers to execute trades, as described in the next paragraph. How Brokers/Custodians Are Selected Our firm seeks to recommend a custodian/broker who will hold client assets and execute transactions on terms that are overall most advantageous when compared to other available providers and their services. A wide range of factors are considered, including, but not limited to: • • • • • • • • • combination of transaction execution services along with asset custody services (generally without a separate fee for custody) capability to execute, clear and settle trades (buy and sell securities for client accounts) capabilities to facilitate transfers and payments to and from accounts (wire transfers, check requests, bill payment, etc.) breadth of investment products made available (stocks, bonds, mutual funds, exchange traded funds (ETFs), etc.) availability of investment research and tools that assist in making investment decisions quality of services competitiveness of the price of those services (commission rates, margin interest rates, other fees, etc.) and willingness to negotiate them reputation, financial strength and stability of the provider prior service to our firm and our other clients Products & Services Available from Schwab availability of other products and services that benefit our firm, as discussed below (see “ ”) Custody & Brokerage Costs Schwab generally does not charge a separate for custody services, but is compensated by charging commissions or other fees to clients on trades that are executed or that settle into the Schwab account. In addition to commissions, Schwab charges a flat dollar amount as a “prime broker” or “trade away” fee for each trade that our firm has executed by a different broker-dealer but where the securities bought or the funds from the securities sold are deposited (settled) into a Schwab account. These fees are in addition to the commissions or other compensation paid to the executing broker- dealer. Because of this, in order to minimize client trading costs, our firm has Schwab execute most trades for the accounts. Products & Services Available from Schwab Schwab Advisor Services is Schwab’s business serving independent investment advisory firms like our firm. They provide our firm and clients with access to its institutional brokerage – trading, custody, reporting and related services – many of which are not typically available to Schwab retail customers. Schwab also makes available various support services. Some of those services help manage or administer our client accounts while others help manage and grow our business. Schwab’s support services are generally available on an unsolicited basis (our firm does not have to request them) and at no charge to our firm. The availability of Schwab’s products and services is not based on the provision of particular investment advice, such as purchasing particular securities for clients. Here is a more detailed description of Schwab’s support services: ADV Part 2A – Firm Brochure Page 18 Fonte Financial Advisors, LLC  Services that Benefit Clients Schwab’s institutional brokerage services include access to a broad range of investment products, execution of securities transactions, and custody of client assets. The investment products available through Schwab include some to which our firm might not otherwise have access or that would require a significantly higher minimum initial investment by firm clients. Schwab’s services described in this paragraph generally benefit clients and their accounts. Services that May Not Directly Benefit Clients Schwab also makes available other products and services that benefit our firm but may not directly benefit clients or their accounts. These products and services assist in managing and administering our client accounts. They include investment research, both Schwab’s and that of third parties. This research may be used to service all or some substantial number of client accounts, including accounts not maintained at Schwab. In addition to investment research, Schwab also makes available software and other technology that: • • • • • provides access to client account data (such as duplicate trade confirmations and account statements); facilitates trade execution and allocate aggregated trade orders for multiple client accounts; provides pricing and other market data; facilitates payment of our fees from our clients’ accounts; and assists with back-office functions, recordkeeping and client reporting. Services that Generally Benefit Only Our Firm Schwab also offers other services intended to help manage and further develop our business enterprise. These services include: • • • • educational conferences and events technology, compliance, legal, and business consulting; publications and conferences on practice management and business succession; and access to employee benefits providers, human capital consultants and insurance providers. Schwab may provide some of these services itself. In other cases, Schwab will arrange for third-party vendors to provide the services to our firm. Schwab may also discount or waive fees for some of these services or pay all or a part of a third party’s fees. Schwab may also provide our firm with other benefits, such as occasional business entertainment for our personnel. Irrespective of direct or indirect benefits to our client through Schwab, our firm strives to enhance the client experience, help clients reach their goals and put client interests before that of our firm or associated persons. Our Interest in Schwab’s Services. ADV Part 2A – Firm Brochure Page 19 Fonte Financial Advisors, LLC  The availability of these services from Schwab benefits our firm because our firm does not have to produce or purchase them. Our firm does not have to pay for these services, and they are not contingent upon committing any specific amount of business to Schwab in trading commissions or assets in custody. In light of our arrangements with Schwab, a conflict of interest exists as our firm may have incentive to require that clients maintain their accounts with Schwab based on our interest in receiving Schwab’s services that benefit our firm rather than based on client interest in receiving the best value in custody services and the most favorable execution of transactions. As part of our fiduciary duty to our clients, our firm will endeavor at all times to put the interests of our clients first. Clients should be aware, however, that the receipt of economic benefits by our firm or our related persons creates a potential conflict of interest and may indirectly influence our firm’s choice of Schwab as a custodial recommendation. Our firm examined this potential conflict of interest when our firm chose to recommend Schwab and have determined that the recommendation is in the best interest of our firm’s clients and satisfies our fiduciary obligations, including our duty to seek best execution. In seeking best execution, the determinative factor is not the lowest possible cost, but whether the transaction represents the best qualitative execution, taking into consideration the full range of a broker-dealer’s services, including the value of research provided, execution capability, commission rates, and responsiveness. Although our firm will seek competitive rates, to the benefit of all clients, our firm may not necessarily obtain the lowest possible commission rates for specific client account transactions. Our firm believes that the selection of Schwab as a custodian and broker is the best interest of our clients. It is primarily supported by the scope, quality and price of Schwab’s services, and not Schwab’s services that only benefit our firm. Client Brokerage Commissions Schwab does not make client brokerage commissions generated by client transactions available for our firm’s use. Client Transactions in Return for Soft Dollars Our firm does not direct client transactions to a particular broker-dealer in return for soft dollar benefits. Brokerage for Client Referrals Our firm does not receive client referrals from a broker dealer or third party in exchange for utilizing their brokerage services. Directed Brokerage Our firm routinely recommends that clients direct us to execute through a specified broker-dealer. Our firm recommends the use of Schwab. Each client will be asked to establish their account(s) with Schwab if not already done. Please note that not all advisers have this requirement. Special Considerations for ERISA Clients ADV Part 2A – Firm Brochure Page 20 Fonte Financial Advisors, LLC  A retirement or ERISA plan client may direct all or part of portfolio transactions for its account through a specific broker or dealer in order to obtain goods or services on behalf of the plan. Such direction is permitted provided that the goods and services provided are reasonable expenses of the plan incurred in the ordinary course of its business for which it otherwise would be obligated and empowered to pay. ERISA prohibits directed brokerage arrangements when the goods or services purchased are not for the exclusive benefit of the plan. Consequently, our firm will request that plan sponsors who direct plan brokerage provide us with a letter documenting that this arrangement will be for the exclusive benefit of the plan. Client-Directed Brokerage Our firm does not allow client-directed brokerage outside our recommendations. Aggregation of Purchase or Sale Our firm provides investment management services for various clients. There are occasions on which portfolio transactions may be executed as part of concurrent authorizations to purchase or sell the same security for numerous accounts served by our firm, which involve accounts with similar investment objectives. Although such concurrent authorizations potentially could be either advantageous or disadvantageous to any one or more particular accounts, they are affected only when our firm believes that to do so will be in the best interest of the effected accounts. When such concurrent authorizations occur, the objective is to allocate the executions in a manner which is deemed equitable to the accounts involved. In any given situation, our firm attempts to allocate trade executions in the most equitable manner possible, taking into consideration client objectives, current asset allocation and availability of funds using price averaging, proration and consistently non-arbitrary methods of allocation. Item 13: Review of Accounts or Financial Plans Justin Reckers, CCO review accounts on at least an annual basis for our Asset Management and Comprehensive Portfolio Management clients. The nature of these reviews is to learn whether client accounts are in line with their investment objectives, appropriately positioned based on market conditions, and investment policies, if applicable. Verbal reports take place at least annually for our Asset Management or Comprehensive Portfolio Management clients. Our firm may review client accounts more frequently than described above. Among the factors which may trigger an off-cycle review are major market or economic events, the client’s life events, requests by the client, etc. Financial Planning clients do not receive reviews of their written plans unless they take action to schedule a financial consultation with us. Our firm does not provide ongoing services to financial planning clients, but are willing to meet with such clients upon their request to discuss updates to their plans, changes in their circumstances, etc. Financial Planning clients do not receive written or verbal updated reports regarding their financial plans unless they separately engage our firm for a post-financial plan meeting or update to their initial written financial plan. Retirement Plan Consulting clients receive reviews of their retirement plans for the duration of the service. Our firm also provides ongoing services where clients are met with upon their request to discuss updates to their plans, changes in their circumstances, etc. Retirement Plan Consulting clients ADV Part 2A – Firm Brochure Page 21 Fonte Financial Advisors, LLC  do not receive written or verbal updated reports regarding their plans unless they choose to engage our firm for ongoing services. Item 14: Client Referrals & Other Compensation Schwab (see Item 12 – Brokerage Practices) Our firm receives economic benefit from Schwab in the form of the support products and services made available to our firm and other independent investment advisors that have their clients maintain accounts at Schwab. These products and services, how they benefit our firm, and the related conflicts of interest are described above . The availability of Schwab’s products and services is not based on our firm giving particular investment advice, such as buying particular securities for our clients. Client Referrals Our firm provides cash or non-cash compensation directly or indirectly to unaffiliated persons for the referral of prospective clients to our firm in accordance with Rule 206 (4)-1 of the Investment Advisers Act of 1940. Such compensation arrangements will not result in higher costs to the referred client. In this regard, our firm maintains a written agreement with each unaffiliated person that is compensated for testimonials or endorsements (which include client referrals) in an aggregate amount of $1,000 or more (or the equivalent value in non-cash compensation) over a trailing 12- month period in compliance with Rule 206 (4)-1 of the Investment Advisers Act of 1940 and applicable state and federal laws. The following information will be disclosed clearly and prominently to referred prospective clients at the time of each referral: • • • Whether the unaffiliated person is a current client of our firm, A description of the cash or non-cash compensation provided directly or indirectly by our firm to the unaffiliated person in exchange for the referral, if applicable, and A brief statement of any material conflicts of interest on the part of the unaffiliated person giving the referral resulting from our firm’s relationship with such unaffiliated person. In cases where state law requires licensure of solicitors, our firm ensures that no solicitation fees are paid unless the solicitor is registered as an investment adviser representative of our firm. If our firm is paying solicitation fees to another registered investment adviser, the licensure of individuals is the other firm’s responsibility. Item 15: Custody Deduction of Advisory Fees: While our firm does not maintain physical custody of client assets (which are maintained by a qualified custodian, as discussed above), we are deemed to have custody of certain client assets if given the authority to withdraw assets from client accounts, as further described below under “Third Party Money Movement.” All our clients receive account statements directly from their qualified custodian(s) at least quarterly upon opening of an account. We urge our clients to carefully review these statements. Additionally, if our firm decides to send its own account statements to clients, such statements will include a legend that recommends the client compare the account statements received from the qualified custodian with those received from our firm. Clients are encouraged to ADV Part 2A – Firm Brochure Page 22 Fonte Financial Advisors, LLC  raise any questions with us about the custody, safety or security of their assets and our custodial recommendations. Third Party Money Movement: On February 21, 2017, the SEC issued a no-action letter (“Letter”) with respect to Rule 206(4)-2 (“Custody Rule”) under the Investment Advisers Act of 1940 (“Advisers Act”). The letter provided guidance on the Custody Rule as well as clarified that an adviser who has the power to disburse client funds to a third party under a standing letter of authorization (“SLOA”) is deemed to have custody. As such, our firm has adopted the following safeguards in conjunction with our custodian: • • • • • • • The client provides an instruction to the qualified custodian, in writing, that includes the client’s signature, the third party’s name, and either the third party’s address or the third party’s account number at a custodian to which the transfer should be directed. The client authorizes the investment adviser, in writing, either on the qualified custodian’s form or separately, to direct transfers to the third party either on a specified schedule or from time to time. The client’s qualified custodian performs appropriate verification of the instruction, such as a signature review or other method to verify the client’s authorization, and provides a transfer of funds notice to the client promptly after each transfer. The client has the ability to terminate or change the instruction to the client’s qualified custodian. The investment adviser has no authority or ability to designate or change the identity of the third party, the address, or any other information about the third party contained in the client’s instruction. The investment adviser maintains records showing that the third party is not a related party of the investment adviser or located at the same address as the investment adviser. The client’s qualified custodian sends the client, in writing, an initial notice confirming the instruction and an annual notice reconfirming the instruction. Item 16: Investment Discretion Clients must provide our firm with investment discretion on their behalf, pursuant to an executed investment advisory client agreement. By granting investment discretion, our firm is authorized to execute securities transactions, determine which securities are bought and sold, and the total amount to be bought and sold. Limitations may be imposed by the client in the form of specific constraints on any of these areas of discretion with our firm’s written acknowledgement. Item 17: Voting Client Securities Our firm does not accept the proxy authority to vote client securities. Clients will receive proxies or other solicitations directly from their custodian or a transfer agent. In the event that proxies are sent to our firm, our firm will forward them to the appropriate client and ask the party who sent them to mail them directly to the client in the future. Clients may call, write or email us to discuss questions they may have about particular proxy votes or other solicitations. ADV Part 2A – Firm Brochure Page 23 Fonte Financial Advisors, LLC  Item 18: Financial Information Our firm is not required to provide financial information in this Brochure because: • • • • Our firm does not require the prepayment of more than $1,200 in fees when services cannot be rendered within 6 months. Our firm does not take custody of client funds or securities. Our firm does not have a financial condition or commitment that impairs our ability to meet contractual and fiduciary obligations to clients. Our firm has never been the subject of a bankruptcy proceeding. ADV Part 2A – Firm Brochure Page 24 Fonte Financial Advisors, LLC