MALOON, POWERS, PITRE, HIGGINS & DENNEHY, LLC

Part 2A of Form ADV: Firm Brochure Maloon, Powers, Pitre, Higgins & Dennehy, LLC 12657 Alcosta Blvd. Suite 470 San Ramon, CA 94583 Telephone: 925-275-1000 Email: chume@calfinad.com Web Address: www.calfinad.com 3/24/2025 This brochure provides information about the qualifications and business practices of California Financial Advisors. If you have any questions about the contents of this brochure, please contact us at 925-275-1000 or chume@calfinad.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. Registration with the SEC or with any state securities authority does not imply a certain level of skill or training. Additional information about California Financial Advisors also is available on the SEC's website at www.adviserinfo.sec.gov. You can search this site by a unique identifying number, known as a CRD number. Our firm's CRD number is 110152.  Item 2 Material Changes This Firm Brochure dated 3/15/2025 provides you with a summary of California Financial Advisors' advisory services and fees, professionals, certain business practices and policies, as well as actual or potential conflicts of interest, among other things. This Item is used to provide our clients with a summary of new and/or updated information; we will inform of the revision(s) based on the nature of the information as follows. 1. Annual Update: We are required to update certain information at least annually, within 90 days of our firm's fiscal year end (FYE) of December 31. We will provide you with either a summary of the revised information with an offer to deliver the full revised Brochure within 120 days of our FYE or we will provide you with our revised Brochure that will include a summary of those changes in this Item. The following summarizes new or revised disclosures based on information previously provided in our Firm Brochure dated 3/15/25. Page 2 of 20  Item 3 Table of Contents Item 1 Cover Page 1 Item 2 Material Changes 2 Item 3 Table of Contents 3 Item 4 Advisory Business 4 Item 5 Fees and Compensation 6 Item 6 Performance-Based Fees and Side-By-Side Management 9 Item 7 Types of Clients 9 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss 10 Item 9 Disciplinary Information 11 Item 10 Other Financial Industry Activities and Affiliations 11 Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading 13 Item 12 Brokerage Practices 14 Item 13 Review of Accounts 18 Item 14 Client Referrals and Other Compensation 19 Item 15 Custody 19 Item 16 Investment Discretion 20 Item 17 Item 18 Voting Client Securities Financial Information 20 21 Page 3 of 20  Item 4 Advisory Business Maloon, Powers, Pitre, Higgins & Dennehy, LLC is a SEC-registered investment adviser with its principal place of business located in California. Maloon, Powers, Pitre, Higgins & Dennehy, LLC began conducting business in 1998. Listed below are the firm's principal shareholders (i.e., those individuals and/or entities controlling 20% or more of this company). • Michael Francis Maloon, Member • Thomas James Powers, Member • Mark Anthony Pitre, Member • Michelle Perry Higgins, Member • Ryan Douglas Dennehy, Member California Financial Advisors offers the following advisory services to our clients: INVESTMENT SUPERVISORY SERVICES ("ISS") INDIVIDUAL PORTFOLIO MANAGEMENT Our firm provides continuous advice to a client regarding the investment of client funds based on the individual needs of the client. Through personal discussions in which goals and objectives based on a client's particular circumstances are established, we develop a client's personal investment policy and create and manage a portfolio based on that policy. During our data-gathering process, we determine the client's individual objectives, time horizons, risk tolerance, and liquidity needs. As appropriate, we also review and discuss a client's prior investment history, as well as family composition and background. We manage these advisory accounts on a discretionary or non-discretionary basis. Account supervision is guided by the client's stated objectives (i.e., maximum capital appreciation, growth, income, or growth and income), as well as tax considerations. Clients may impose reasonable restrictions on investing in certain securities, types of securities, or industry sectors. Our investment recommendations are not limited to any specific product or service offered by a broker- dealer or insurance company and will generally include advice regarding the following securities: • Exchange-listed securities • Securities traded over-the-counter • Corporate debt securities (other than commercial paper) • Commercial paper • Certificates of deposit • Municipal securities • Mutual fund shares • United States governmental securities Page 4 of 20  Because some types of investments involve certain additional degrees of risk, they will only be implemented/recommended when consistent with the client's stated investment objectives, tolerance for risk, liquidity, and suitability. FINANCIAL PLANNING We provide financial planning services. Financial planning is a comprehensive evaluation of a client's current and future financial state by using currently known variables to predict future cash flows, asset values and withdrawal plans. Through the financial planning process, all questions, information, and analysis are considered as they impact and are impacted by the entire financial and life situation of the client. Clients purchasing this service receive a written report which provides the client with a detailed financial plan designed to assist the client achieve his or her financial goals and objectives. In general, the financial plan can address any or all the following areas: • • • • • • • Personal: We review family records, budgeting, personal liability, estate information and financial goals. Tax & Cash Flow: We analyze the client's income tax and spending and planning for past, current, and future years; then illustrate the impact of various investments on the client's current income tax and future tax liability. Investments: We analyze investment alternatives and their effect on the client's portfolio. Insurance: We review existing policies to ensure proper coverage for life, health, disability, long-term care, liability, home, and automobile. Retirement: We analyze current strategies and investment plans to help the client achieve his or her retirement goals. Death & Disability: We review the client's cash needs at death, income needs of surviving dependents, estate planning and disability income. Estate: We assist the client in assessing and developing long-term strategies, including as appropriate, living trusts, wills, review estate tax, powers of attorney, asset protection plans, nursing homes, Medicaid, and elder law. We gather required information through in-depth personal interviews. Information gathered includes the client's current financial status, tax status, future goals, returns objectives and attitudes towards risk. We carefully review documents supplied by the client, including a questionnaire completed by the client, and prepare a written report. Should the client choose to implement the recommendations contained in the plan, we suggest the client work closely with his/her attorney, accountant, insurance agent, and/or stockbroker. Implementation of financial plan recommendations is entirely at the client's discretion. We also provide general non-securities advice on topics that may include tax and budgetary planning, estate planning and business planning. Typically, the financial plan is presented to the client within six months of the contract date, provided that all information needed to prepare the financial plan has been promptly provided. Financial Planning recommendations are not limited to any specific product or service offered by a broker-dealer or insurance company. All recommendations are of a generic nature. Page 5 of 20  CONSULTING SERVICES Clients can also receive investment advice on a more focused basis. This may include advice on only an isolated area(s) of concern such as estate planning, retirement planning, or any other specific topic. We also provide specific consultation and administrative services regarding investment and financial concerns of the client. Consulting recommendations are not limited to any specific product or service offered by a broker- dealer or insurance company. All recommendations are of a generic nature. AMOUNT OF MANAGED ASSETS As of 12/31/2024, we were actively managing $1,733,962,056 clients' assets on a discretionary basis plus $267,723,933 of clients' assets on a non-discretionary basis. Item 5 Fees and Compensation INVESTMENT SUPERVISORY SERVICES ("ISS") INDIVIDUAL PORTFOLIO MANAGEMENT FEES The annualized fee for Investment Supervisory Services are charged as a percentage of assets under management, according to the following schedule: Assets Under Management $100,000 - $299,999 Annual Fee 1.2% $300,000 - $749,999 1.0% $750,000 - $1,499,999 0.8% $1,500,000 - $2,999,999 0.7% $3,000,000 - $5,999,999 0.6% $6,000,000 - $9,999,999 Over $10,000,000 0.5% 0.4% A minimum of $100,000 of assets under management is required for this service. This account size may be negotiable under certain circumstances. California Financial Advisors may group certain related client accounts for the purposes of achieving the minimum account size and determining the annualized fee. Limited Negotiability of Advisory Fees: Although California Financial Advisors has established the aforementioned fee schedule(s), we retain the discretion to negotiate alternative fees on a client-by- client basis. Client facts, circumstances and needs are considered in determining the fee schedule. These include the complexity of the client, assets to be placed under management, anticipated future additional Page 6 of 20  assets; related accounts; portfolio style, account composition, reports, among other factors. The specific annual fee schedule is identified in the contract between the adviser and each client. We may group certain related client accounts for the purposes of achieving the minimum account size requirements and determining the annualized fee. Discounts, not generally available to our advisory clients, may be offered to family members and friends of associated persons of our firm. FINANCIAL PLANNING FEES California Financial Advisors' Financial Planning fee is determined based on the nature of the services being provided and the complexity of each client's circumstances. All fees are agreed upon prior to entering into a contract with any client. Our Financial Planning fees are calculated and charged on an hourly basis, ranging from $150 to $450 per hour. Although the length of time it will take to provide a Financial Plan will depend on each client's personal situation, we will provide an estimate for the total hours at the start of the advisory relationship. Financial Planning Fee Offset: California Financial Advisors reserves the discretion to reduce or waive the hourly fee and/or the minimum fixed fee if a financial planning client chooses to engage us for our Portfolio Management Services. CONSULTING SERVICES FEES California Financial Advisors' Consulting Services fee is determined based on the nature of the services being provided and the complexity of each client's circumstances. All fees are agreed upon prior to entering into a contract with any client. Our Consulting Services fees are calculated and charged on an hourly basis, ranging from $150 to $450 per hour. An estimate for the total hours is determined at the start of the advisory relationship. Fees are due and payable upon completion of the Consulting Service. Management personnel and other related persons of our firm are licensed as licensed as insurance agents. In their separate capacity(ies), these individuals are able to implement investment recommendations for advisory clients for separate and typical compensation (i.e., commissions, 12b-1 fees or other sales-related forms of compensation). This presents a conflict of interest to the extent that these individuals recommend that a client invest in a security which results in a commission being paid to the individuals. Clients are not under any obligation to engage these individuals when considering implementation of advisory recommendations. The implementation of any or all recommendations is solely at the discretion of the client. Page 7 of 20  GENERAL INFORMATION in Termination of the Advisory Relationship: A client agreement may be canceled at any time, by either party, for any reason upon receipt of written notice. As disclosed above, certain fees are paid advance of services provided. Upon termination of any account, any prepaid, unearned fees will be promptly refunded. In calculating a client's reimbursement of fees, we will pro rate the reimbursement according to the number of days remaining in the billing period. Mutual Fund Fees: All fees paid to California Financial Advisors for investment advisory services are separate and distinct from the fees and expenses charged by mutual funds and/or ETFs to their shareholders. These fees and expenses are described in each fund's prospectus. These fees will generally include a management fee, other fund expenses, and a possible distribution fee. If the fund also imposes sales charges, a client may pay an initial or deferred sales charge. A client could invest in a mutual fund directly, without our services. In that case, the client would not receive the services provided by our firm which are designed, among other things, to assist the client in determining which mutual fund or funds are most appropriate to each client's financial condition and objectives. Accordingly, the client should review both the fees charged by the funds and our fees to fully understand the total amount of fees to be paid by the client and to thereby evaluate the advisory services being provided. Separately Managed Account Fees: Clients participating in separately managed account programs may be charged various program fees in addition to the advisory fee charged by our firm. Such fees may include the investment advisory fees of the independent advisers, which may be charged as part of a wrap fee arrangement. In a wrap fee arrangement, clients pay a single fee for advisory, brokerage and custodial services. Client's portfolio transactions may be executed without commission charge in a wrap fee arrangement. In evaluating such an arrangement, the client should also consider that, depending upon the level of the wrap fee charged by the broker-dealer, the amount of portfolio activity in the client's account, and other factors, the wrap fee may or may not exceed the aggregate cost of such services if they were to be provided separately. We will review with clients any separate program fees that may be charged to clients. Additional Fees and Expenses: In addition to our advisory fees, clients are also responsible for the fees and expenses charged by custodians and imposed by broker dealers, including, but not limited to, any transaction charges imposed by a broker dealer with which an independent investment manager effects transactions for the client's account(s). Please refer to the "Brokerage Practices" section (Item 12) of this Form ADV for additional information. Grandfathering of Minimum Account Requirements: Pre-existing advisory clients are subject to California Financial Advisors' minimum account requirements and advisory fees in effect at the time the client entered into the advisory relationship. Therefore, our firm's minimum account requirements will differ among clients. ERISA Accounts: California Financial Advisors is deemed to be a fiduciary to advisory clients that are employee benefit plans or individual retirement accounts (IRAs) pursuant to the Employee Retirement Income Security Act ("ERISA"), and regulations under the Internal Revenue Code of 1986 (the "Code"), respectively. As such, our firm is subject to specific duties and obligations under ERISA and the Internal Revenue Code that include among other things, restrictions concerning certain forms of compensation. To avoid engaging in prohibited transactions, California Financial Advisors may only charge fees for Page 8 of 20  investment advice about products for which our firm and/or our related persons do not receive any commissions or 12b-1 fees, or conversely, investment advice about products for which our firm and/or our related persons receive commissions or 12b-1 fees, however, only when such fees are used to offset California Financial Advisors' advisory fees. Advisory Fees in General: Clients should note that similar advisory services may (or may not) be available from other registered (or unregistered) investment advisers for similar or lower fees. Limited Prepayment of Fees: Under no circumstances do we require or solicit payment of fees in excess of $1,200 more than six months in advance of services rendered Item 6 Performance-Based Fees and Side-By-Side Management California Financial Advisors does not charge performance-based fees. Item 7 Types of Clients California Financial Advisors provides advisory services to the following types of clients: Individuals (other than high net worth individuals) • • High net worth individuals • Charitable organizations • Corporations or other businesses not listed above As previously disclosed in Item 5, our firm has established certain initial minimum account requirements, based on the nature of the service(s) being provided. For a more detailed understanding of those requirements, please review the disclosures provided in each applicable service. Item 8 Methods of Analysis, Investment Strategies and Risk of Loss METHODS OF ANALYSIS We use the following methods of analysis in formulating our investment advice and/or managing client assets: Asset Allocation: Rather than focusing primarily on securities selection, we attempt to identify an appropriate ratio of securities, fixed income, and cash suitable to the client's investment goals and risk tolerance. A risk of asset allocation is that the client may not participate in sharp increases in a particular security, industry, or market sector. Another risk is that the ratio of securities, fixed income, and cash will change over time due to stock and market movements and, if not corrected, will no longer be appropriate for the client's goals. Page 9 of 20  Mutual Fund and/or ETF Analysis: We look at the experience and track record of the manager of the mutual fund or ETF in an attempt to determine if that manager has demonstrated an ability to invest over a period of time and in different economic conditions. We also look at the underlying assets in a mutual fund or ETF in an attempt to determine if there is significant overlap in the underlying investments held in other fund(s) in the client's portfolio. We also monitor the funds or ETFs in an attempt to determine if they are continuing to follow their stated investment strategy. A risk of mutual fund and/or ETF analysis is that, as in all securities investments, past performance does not guarantee future results. A manager who has been successful may not be able to replicate that success in the future. In addition, as we do not control the underlying investments in a fund or ETF, managers of different funds held by the client may purchase the same security, increasing the risk to the client if that security were to fall in value. There is also a risk that a manager may deviate from the stated investment mandate or strategy of the fund or ETF, which could make the holding(s) less suitable for the client's portfolio. Third-Party Money Manager Analysis: We examine the experience, expertise, 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. We monitor the manager's underlying holdings, strategies, concentrations, and leverage as part of our overall periodic risk assessment. Additionally, as part of our due-diligence process, we survey the manager's compliance and business enterprise risks. A risk of investing with a third-party manager who has been successful in the past is that he/she may not be able to replicate that success in the future. In addition, as we do 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 we do not control the manager's daily business and compliance operations, we may be unaware of the lack of internal controls necessary to prevent business, regulatory or reputational deficiencies. Risks For All Forms Of Analysis: Our securities analysis methods rely on the assumption that the companies whose securities we purchase and sell, the rating agencies that review these securities, and other publicly-available sources of information about these securities, are providing accurate and unbiased data. While we are alert to indications that data may be incorrect, there is always a risk that our analysis may be compromised by inaccurate or misleading information. INVESTMENT STRATEGIES We use the following strategy(ies) in managing client accounts, provided that such strategy(ies) is appropriate to the needs of the client and consistent with the client's investment objectives, risk tolerance, and time horizons, among other considerations: Long-Term Purchases: We purchase securities with the idea of holding them in the client's account for a year or longer. Typically, we employ this strategy when: • we believe the securities to be currently undervalued, and/or Page 10 of 20  • we want exposure to a particular asset class over time, regardless of the current projection for this class. A risk in a long-term purchase strategy is that by holding the security for this length of time, we may not take advantage of short-term gains that could be profitable to a client. Moreover, if our predictions are incorrect, a security may decline sharply in value before we make the decision to sell. Short-Term Purchases: When utilizing this strategy, we purchase securities with the idea of selling them within a relatively short time (typically a year or less). We do this in an attempt to take advantage of conditions that we believe will soon result in a price swing in the securities we purchase. Risk of Loss: Securities investments are not guaranteed, and you may lose money on your investments. We ask that you work with us to help us understand your tolerance for risk. Item 9 Disciplinary Information We are required to disclose any legal or disciplinary events that are material to a client's or prospective client's evaluation of our advisory business or the integrity of our management. Our firm and our management personnel have no reportable disciplinary events to disclose. Item 10 Other Financial Industry Activities and Affiliations these individuals when making advisory Clients should be aware that the receipt of additional compensation by California Financial Advisors and its management persons or employees creates a conflict of interest that may impair the objectivity of our firm and recommendations. California Financial Advisorendeavors at all times to put the interest of its client first, as part of our fiduciary duty as a registered investment advisor. We take the following steps to address this conflict: • we disclose to clients the existence of all material conflicts of interest, including the potential for our firm and our employees to earn compensation from advisory clients in addition to our firm's advisory fees • we disclose to clients that they are not obligated to purchase recommended investment products from our employees • we collect, maintain and document accurate, complete and relevant client background information, including the client's financial goals, objectives and risk tolerance • some representatives of our firm are licensed insurance agents. As a result of these transactions, they receive normal and customary commissions. A conflict of interest exists as these commissionable securities sales create an incentive to recommend products based on the compensation earner. To mitigate this potential conflict, our firm will act in the client's best interest • we require that our employees seek prior approval of any outside employment activity, so that we may ensure that any conflicts of interest in such activity are properly addressed. • we periodically monitor these outside employment activities to verify that any conflicts of interest continue to be properly addressed by our firm; and Page 11 of 20  • we educate our employees regarding the responsibilities of a fiduciary, including the need for having a reasonable and independent basis for the investment advice provided to clients We are aware of the special considerations required under Rule 206(4)-3 of the Investment Advisors Act of 1940. As such, all appropriate disclosure shall be made, and all applicable Federal and State laws will be observed. Clients should be aware that the receipt of additional compensation by California Financial Advisors and its management persons or employees creates a conflict of interest that may impair the objectivity of our firm and these individuals when making advisory recommendations. California Financial Advisors endeavors at all times to put the interest of its clients first as part of our fiduciary duty as a registered investment advisor; we take the following steps to address this conflict: 1. No principal or employee of our firm may put his or her own interest above the interest of an advisory client. 2. No principal or employee of our firm may buy or sell securities for their personal portfolio(s) where their decision is a result of information received as a result of his or her employment unless the information is also available to the investing public. 3. Our firm requires prior approval for any IPO or private placement investments by related persons of the firm. 4. We maintain a list of all reportable securities holdings for our firm and anyone associated with this advisory practice that has access to advisory recommendations ("access person"). These holdings are reviewed on a regular basis by our firm's Chief Compliance Officer or his/her designee. 5. We have established procedures for the maintenance of all required books and records. 6. All clients are fully informed that related persons may receive separate commission compensation when effecting transactions during the implementation process. 7. Clients can decline to implement any advice rendered, except in situations where our firm is granted discretionary authority. 8. All of our principals and employees must act in accordance with all applicable Federal and State regulations governing registered investment advisory practices. 9. We require delivery and acknowledgement of the Code of Ethics by each supervised person of our firm. 10. We have established policies requiring the reporting of Code of Ethics violations to our senior management. 11. Any individual who violates any of the above restrictions may be subject to termination. Code of Ethics, Participation or Interest in Client Transactions and Item 11 Personal Trading Our firm has adopted a Code of Ethics which sets forth high ethical standards of business conduct that we require of our employees, including compliance with applicable federal securities laws. California Financial Advisors and our personnel owe a duty of loyalty, fairness and good faith towards our clients, and have an obligation to adhere not only to the specific provisions of the Code of Ethics but to the general principles that guide the Code. Page 12 of 20  Our Code of Ethics includes policies and procedures for the review of quarterly securities transactions reports as well as initial and annual securities holdings reports that must be submitted by the firm's access persons. Among other things, our Code of Ethics also requires the prior approval of any acquisition of securities in a limited offering (e.g., private placement) or an initial public offering. Our code also provides for oversight, enforcement and recordkeeping provisions. California Financial Advisors' Code of Ethics further includes the firm's policy prohibiting the use of material non-public information. While we do not believe that we have any particular access to non- public information, all employees are reminded that such information may not be used in a personal or professional capacity. A copy of our Code of Ethics is available to our advisory clients and prospective clients. You may request a copy by email sent to chume@calfinad.com, or by calling us at 925-275-1000. California Financial Advisors and individuals associated with our firm are prohibited from engaging in principal transactions. California Financial Advisors and individuals associated with our firm are prohibited from engaging in agency cross transactions. Our Code of Ethics is designed to assure that the personal securities transactions, activities, and interests of our employees will not interfere with (i) making decisions in the best interest of advisory clients and (ii) implementing such decisions while, at the same time, allowing employees to invest for their own accounts. Our firm and/or individuals associated with our firm may buy or sell for their personal accounts securities identical to or different from those recommended to our clients. In addition, any related person(s) may have an interest or position in a certain security(ies) which may also be recommended to a client. It is the expressed policy of our firm that no person employed by us may purchase or sell any security prior to a transaction(s) being implemented for an advisory account, thereby preventing such employee(s) from benefiting from transactions placed on behalf of advisory accounts. As these situations represent actual or potential conflicts of interest to our clients, we have established the following policies and procedures for implementing our firm's Code of Ethics, to ensure our firm complies with its regulatory obligations and provides our clients and potential clients with full and fair disclosure of such conflicts of interest: 1. No principal or employee of our firm may put his or her own interest above the interest of an advisory client. 2. No principal or employee of our firm may buy or sell securities for their personal portfolio(s) where their decision is a result of information received as a result of his or her employment unless the information is also available to the investing public. 3. It is the expressed policy of our firm that no person employed by us may purchase or sell any security prior to a transaction(s) being implemented for an advisory account. This prevents such employees from benefiting from transactions placed on behalf of advisory accounts. 4. Our firm requires prior approval for any IPO or private placement investments by related persons of the firm. Page 13 of 20  5. We maintain a list of all reportable securities holdings for our firm and anyone associated with this advisory practice that has access to advisory recommendations ("access person"). These holdings are reviewed on a regular basis by our firm's Chief Compliance Officer or his/her designee. 6. We have established procedures for the maintenance of all required books and records. 7. Clients can decline to implement any advice rendered, except in situations where our firm is granted discretionary authority. 8. All of our principals and employees must act in accordance with all applicable Federal and State regulations governing registered investment advisory practices. 9. We require delivery and acknowledgement of the Code of Ethics by each supervised person of our firm. 10. We have established policies requiring the reporting of Code of Ethics violations to our senior management. 11. Any individual who violates any of the above restrictions may be subject to termination. Item 12 Brokerage Practices California Financial Advisors emphasizes the unrestricted right of the client to select and choose any broker or dealer and/or insurance company he or she wishes. However, due to the institutional services available through Charles Schwab & Co. and Fidelity, many of CFA’s standard services may not be available should a client choose a different Custodian California Financial Advisors will endeavor to select those brokers or dealers which will provide the best services at the lowest commission rates possible. The reasonableness of commissions is based on the broker's stability, reputation, ability to provide professional services, competitive commission rates and prices, research, trading platform, and other services which will help California Financial Advisors in providing investment management services to clients. California Financial Advisors may, therefore recommend (or use) the use of a broker who provides useful research and securities transaction services even though a lower commission may be charged by a broker who offers no research services and minimal securities transaction assistance. Research services may be useful in servicing all our clients, and not all of such research may be useful for the account for which the particular transaction was affected. Consistent with obtaining best execution for clients, California Financial Advisors may direct brokerage transactions for clients' portfolios to brokers who provide research and execution services to California Financial Advisors and, indirectly, to California Financial Advisors' clients. These services are of the type described in Section 28(e) of the Securities Exchange Act of 1934 and are designed to augment our own internal research and investment strategy capabilities. This may be done without prior agreement or understanding by the client (and done at our discretion). Research services obtained through the use of soft dollars may be developed by brokers to whom brokerage is directed or by third-parties which are compensated by the broker. California Financial Advisors does not attempt to put a specific dollar value on the services rendered or to allocate the relative costs or benefits of those services among clients, believing that the research we receive will help us to fulfill our overall duty to our clients. California Financial Advisors may not use each particular research service, however, to service each client. As a result, a client may pay brokerage commissions that are used, in part, to purchase research services that are not used to benefit that specific client. Broker-dealers we select may be paid commissions for Page 14 of 20  effecting transactions for our clients that exceed the amounts other broker-dealers would have charged for effecting these transactions if California Financial Advisors determines in good faith that such amounts are reasonable in relation to the value of the brokerage and/or research services provided by those broker-dealers, viewed either in terms of a particular transaction or our overall duty to its ('brokerage') discretionary client accounts. Certain items obtainable with soft dollars may not be used exclusively for either execution or research services. The cost of such "mixed-use" products or services will be fairly allocated and California Financial Advisors makes a good faith effort to determine the percentage of such products or services which may be considered as investment research. The portions of the costs attributable to non-research usage of such products or services are paid by our firm to the broker-dealer in accordance with the provisions of Section 28(e) of the Securities Exchange Act of 1934. When California Financial Advisors uses client brokerage commissions to obtain research or brokerage services, we receive a benefit to the extent that California Financial Advisors does not have to produce such products internally or compensate third-parties with our own money for the delivery of such services. Therefore, such use of client brokerage commissions results in a conflict of interest, because we have an incentive to direct client brokerage to those brokers who provide research and services we utilize, even if these brokers do not offer the best price or commission rates for our clients. California Financial Advisors does not maintain custody of your assets that we manage or on which we advise, although we may be deemed to have custody of your assets if you give us authority to withdraw assets from your account (see item 15 – Custody, below). Your assets must be maintained in an account at a “qualified custodian”, generally a broker-dealer or bank. We recommend that our clients use Charles Schwab & Co. Inc. (Schwab) a registered broker-dealer, member SIPC, or National Financial Services LLC and Fidelity Brokerage Services LLC (collectively, and together with all affiliates, “Fidelity”) as the qualified custodian. We are independently owned and operated and are not affiliated with Schwab or Fidelity. Schwab or Fidelity will hold your assets in a brokerage account and buy and sell securities when (we/you) instruct them to. While we recommend that you use Schwab or Fidelity as custodian/broker, you will decide whether to do so and will open your account with either Schwab or Fidelity by entering into an account agreement directly with them. Conflicts of interest associated with this arrangement are described below as well as in Item 14 (Client referrals and other compensation). You should consider these conflicts of interest when selecting your custodian. We do not open the account for you, although we may assist you in doing so. HOW WE SELECT BROKERS/CUSTODIANS We seek to recommend Schwab or Fidelity, custodians/Brokers that will hold your assets and execute transactions. When considering whether the terms that Schwab or Fidelity provides are, overall, most advantageous to you when compared with other available providers and their services, we take into account a wide range of factors, including: • Combination of transaction execution services and asset custody services (without a separate fee for custody) • Capability to execute, clear and settle trades (buy and sell securities for your account Page 15 of 20  • Capability to facilitate transfers and payments to and from accounts (wire transfers, check requests, etc.) • Breadth of available investment products (stocks, bonds, mutual funds, exchange-traded funds (ETFs), etc. • Availability of investment research and tools that assist us 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 the prices • Reputation, financial strength, security and stability • Prior service to us and our clients • Services delivered and paid for by Schwab/Fidelity • Availability of other products and services that benefit us, as discussed below (see “Products and services available to us from Schwab or Fidelity”) For our clients’ accounts maintained in its custody, Schwab or Fidelity generally do not charge separately for custody services but is compensated by account holders through commissions and other transaction- related or asset-based fees for securities trades that are executed through Schwab or Fidelity or that settle into Schwab or Fidelity accounts. Schwab or Fidelity are also compensated by earning interest on the uninvested cash in your account. Schwab’s and Fidelity’s commission rates applicable to our client accounts were negotiated based on the condition that our clients collectively maintain a total of at least $10 million of their assets in accounts at Schwab or Fidelity. (These commitments benefit you because the overall (commission rates and asset-based fees) you pay are lower than they would be otherwise. We are not required to select the broker or dealer that charges the lowest transaction cost, even if that broker provides execution quality comparable to other brokers or dealers. Although we are not required to execute all trades through Schwab or Fidelity, we have determined that having Schwab or Fidelity execute most trades are consistent with our duty to seek “best execution” of your trades. Best execution means the most favorable terms for a transaction based on all relevant factors, including those listed above (see “how we select brokers/custodian”). By using another broker or dealer you may pay lower transaction costs. PRODUCTS AND SERVICES AVAILABLE TO US FROM SCHWAB Schwab Advisor Services and Fidelity’s Advisor Services is Schwab’s or Fidelity’s business serving independent investment advisory firms like us. They provide us and our clients with access to their institutional brokerage services (trading, custody, reporting and related services), many of which are not typically available to Schwab or Fidelity retail customers. However, certain retail investors may be able to get institutional brokerage services from Schwab or Fidelity without going through us. Schwab and Fidelity also make available various support services. Some of those services help us manage or administer our clients’ accounts, while others help us manage and grow our business. Their support services are generally available on an unsolicited basis (we don’t have to request them) and a no charge to us. Following is a more detailed description of those support services. Page 16 of 20  SERVICES THAT BENEFIT YOU Schwab’s and Fidelity’s 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 or Fidelity include some to which we might not otherwise have access or that would required a significantly higher minimum initial investment by our clients. Schwab’s and Fidelity’s services described in this paragraph generally benefit you and your account. SERVICES THAT DO NOT DIRECTLY BENEFIT YOU Schwab and Fidelity also make available to us other products and services that benefit us but do not directly benefit you or your account. These products and services assist us in managing and administering our clients’ accounts and operating our firm. They include investment research, both Schwab or Fidelity’s own and that of third parties. We use this research to service all or a substantial number of clients’ accounts, including accounts not maintained at Schwab or Fidelity. In addition to investment research, Schwab and Fidelity makes available software and other technology that: • provide access to client account data (such as duplicate trade confirmations and account statements); facilitate trade execution and allocate aggregated trade orders for multiple client accounts; facilitate payment of our fees from our clients' accounts; and • • provide research, pricing and other market data; • • assist with back-office functions, recordkeeping and client reporting. SERVICES THAT GENERALLY BENEFIT ONLY US Schwab Institutional and Fidelity also offer other services intended to help us manage and further develop our business enterprise. These services may include: • Educational conferences and events • Consulting on technology and business needs • Consulting on legal and related compliance needs • Publications and conferences on practice management and business succession • Access to employee benefits providers, human capital consultants and insurance providers • Marketing consulting and support Schwab and Fidelity provide some of these services themselves. In other cases, it will arrange for third- party vendors to provide the services to us. Schwab and Fidelity also discounts or waives their fees for some of these services or pays all or a part of a third party’s fees. They provides us with other benefits, such as occasional business entertainment of our personnel. If you did not maintain your account with either Schwab or Fidelity, we would be required to pay for those services from our own resources. We examined this potential conflict of interest when we chose to enter into the relationship with Schwab and Fidelity and have determined that the relationship is in the best interests of California Financial Advisors' clients and satisfies our client obligations, including our duty to seek best execution. A client may pay a commission that is higher than another qualified broker-dealer might charge to effect the same transaction where we determine in good faith that the commission is reasonable in relation to the value of the brokerage and research services received. In seeking best execution, the determinative Page 17 of 20  factor is not the lowest possible cost, but whether the transaction represents the best qualitative execution, taking into consideration the full range of a broker-dealer's services, including the value of research provided, execution capability, commission rates, and responsiveness. Accordingly, while California Financial Advisors will seek competitive rates, to the benefit of all clients, we may not necessarily obtain the lowest possible commission rates for specific client account transactions. Although the investment research products and services that may be obtained by us will generally be used to service all of our clients, a brokerage commission paid by a specific client may be used to pay for research that is not used in managing that specific client's account. Item 13 Review of Accounts INVESTMENT SUPERVISORY SERVICES ("ISS") INDIVIDUAL PORTFOLIO MANAGEMENT Reviews: While the underlying securities within Individual Portfolio Management Services accounts are continually monitored, these accounts are reviewed at least quarterly. Accounts are reviewed in the context of each client’s stated investment objectives and guidelines. More frequent reviews may be triggered by material changes in variables such as the client’s individual circumstances, or the market, political or economic environment. These accounts are reviewed by the client’s advisor. Reports: In addition to the monthly statements and confirmations of transactions that clients receive from their broker/dealer/custodian, we provide quarterly reports summarizing account performance, balances, and holdings. FINANCIAL PLANNING SERVICES Reviews: While reviews may occur at different stages depending on the nature and terms of the specific engagement, typically no formal reviews will be conducted for Financial Planning clients unless otherwise contracted for. Reports: Financial Planning clients will receive a completed financial plan. Additional reports will not typically be provided unless otherwise contracted for. CONSULTING SERVICES Reviews: While reviews may occur at different stages depending on the nature and terms of the specific engagement, typically no formal reviews will be conducted for Consulting Services clients unless otherwise contracted for. Such reviews will be conducted by the client’s account advisor. Reports: Consulting Services clients will not typically receive reports due to the nature of the service. Page 18 of 20  Item 14 Client Referrals and Other Compensation It is California Financial Advisors' policy not to engage solicitors or to pay related or non-related persons for referring potential clients to our firm. Item 15 Custody We previously disclosed in the "Fees and Compensation" section (Item 5) of this Brochure that our firm directly debits advisory fees from client accounts. As part of this billing process, the client's custodian is advised of the amount of the fee to be deducted from that client's account. On at least a quarterly basis, the custodian is required to send to the client a statement showing all transactions within the account during the reporting period. Because the custodian does not calculate the amount of the fee to be deducted, it is important for clients to carefully review their custodial statements to verify the accuracy of the calculation, among other things. Clients should contact us directly if they believe that there may be an error in their statement. In addition to the periodic statements that clients receive directly from their custodians, we also send account statements directly to our clients on a quarterly basis. We urge our clients to carefully compare the information provided on these statements to ensure that all account transactions, holdings and values are correct and current. Item 16 Investment Discretion Clients may hire us to provide discretionary asset management services, in which case we place trades in a client's account without contacting the client prior to each trade to obtain the client's permission. Our discretionary authority includes the ability to do the following without contacting the client: • • determine the security to buy or sell; and/or determine the amount of the security to buy or sell Clients give us discretionary authority when they sign a discretionary agreement with our firm and may limit this authority by giving us written instructions. Clients may also change/amend such limitations by once again providing us with written instructions. Item 17 Voting Client Securities We vote proxies for all client accounts; however, you always have the right to vote proxies yourself. You can exercise this right by instructing us in writing to not vote proxies in your account. We will vote proxies in the best interests of its clients and in accordance with our established policies and procedures. Our firm will retain all proxy voting books and records for the requisite period of time, including a copy of each proxy statement received, a record of each vote cast, a copy of any document created by us that was material to making a decision how to vote proxies, and a copy of each written Page 19 of 20  client request for information on how the adviser voted proxies. If our firm has a conflict of interest in voting a particular action, we will notify the client of the conflict and retain an independent third-party to cast a vote. Clients may obtain a copy of our complete proxy voting policies and procedures by contacting Carrie Hume by telephone (925-275-1000), email (chume@calfinad.com), or in writing. Clients may request, in writing, information on how proxies for their shares were voted. If any client requests a copy of California Financial Advisors’ complete proxy policies and procedures or how we voted proxies or how California Financial Advisors voted proxies for their account(s), we will promptly provide such information to the client. We will neither advise nor act on behalf of the client in legal proceedings involving companies whose securities are held in the client's account(s), including, but not limited to, the filing of "Proofs of Claim" in class action settlements. If desired, clients may direct us to transmit copies of class action notices to the client or a third party. Upon such direction, we will make commercially reasonable efforts to forward such notices in a timely manner. With respect to ERISA accounts, we will vote proxies unless the plan documents specifically reserve the plan sponsor's right to vote proxies. To direct us to vote a proxy in a particular manner, clients should contact Carrie Hume, Office Manager by telephone, email, or in writing. You can instruct us to vote proxies according to particular criteria (for example, to always vote with management, or to vote for or against a proposal to allow a so-called "poison pill" defense against a possible takeover). These requests must be made in writing. You can also instruct us on how to cast your vote in a particular proxy contest by contacting us (925) 275-1000. Item 18 Financial Information As an advisory firm that maintains discretionary authority for client accounts, we are also required to disclose any financial condition that is reasonable likely to impair our ability to meet our contractual obligations. California Financial Advisors has no such financial circumstances to report. Under no circumstances do we require or solicit payment of fees in excess of $1,200 per client more than six months in advance of services rendered. Therefore, we are not required to include a financial statement. California Financial Advisors has not been the subject of a bankruptcy petition at any time during the past ten years. Page 20 of 20