Pearson Financial Services

Item 1 Cover Page Pearson and Associates, LLC d/b/a: Pearson Financial Services 586 Main Street PO Box 2041 Dennis, MA 02638 508-385-7925 508-385-6094 (fax) 871 Venetia Bay Blvd., Suite 300A-4 Venice, FL 34285 800-385-7925; 941-882-3038 508-385-6094 (fax) www.spearsonfinancial.com August 17, 2026 Form ADV Part 2A Brochure This brochure provides information about the qualifications and business practices of Pearson Financial Services. If you have any questions about the contents of this Brochure, please contact us at 508-385-7925 and/or coralsands@spearsonfinancial.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 Pearson Financial Services is available on the SEC's website at www.adviserinfo.sec.gov. The searchable IARD/CRD number for Pearson Financial Services is 130143. Any references to Pearson Financial Services as a registered investment adviser or its related persons as registered advisory representatives does not imply a certain level of skill or training. 1  Item 2 Material Changes At least annually, this section will discuss only specific material changes that are made to the Pearson Financial Services (hereinafter referred to as "Pearson Financial") Brochure and provide you with a summary of such changes. Additionally, reference to the date of the last annual update to this Brochure will be provided. Since our last annual updating amendment dated February 23, 2026, we have made the following material changes to our Form ADV: • We offer Portfolio Management services on a non-discretionary basis. In July 2026, Pearson Financial Services filed for registration with the Securities and Exchange Commission (SEC). A copy of our updated Brochure and Brochure Supplements may be requested by contacting us at 508-385-7925 and/or coralsands@spearsonfinancial.com. Our Brochure and Brochure Supplements are available to you free of charge. Additional information about Pearson Financial is also available via the SEC's website www.adviserinfo.sec.gov. The IARD number for Pearson Financial is 130143. The SEC's website also provides information about any persons affiliated with Pearson Financial who are registered, or are required to be registered, as Advisory Representatives of Pearson Financial. 2  Item 3 Table Of Contents Item 1 Cover Page Item 2 Material Changes Item 3 Table Of Contents Item 4 Advisory Business Item 5 Fees and Compensation Item 6 Performance-Based Fees and Side-By-Side Management Item 7 Types of Clients Item 8 Methods of Analysis, Investment Strategies and Risk of Loss Item 9 Disciplinary Information Item 10 Other Financial Industry Activities and Affiliations Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Item 12 Brokerage Practices Item 13 Review of Accounts Item 14 Client Referrals and Other Compensation Item 15 Custody Item 16 Investment Discretion Item 17 Voting Client Securities Item 18 Financial Information Item 19 Requirements for State Registered Advisers Page 1 Page 2 Page 3 Page 4 Page 8 Page 10 Page 10 Page 10 Page 13 Page 13 Page 14 Page 15 Page 18 Page 18 Page 19 Page 19 Page 19 Page 20 Page 20 3  Item 4 Advisory Business Pearson and Associates, LLC operates under the d/b/a of Pearson Financial Services (hereinafter referred to as "Pearson Financial"). Pearson Financial is an investment advisory firm that provides a comprehensive approach to financial planning. Our services are more fully described below. A. Pearson Financial Services was created in 1996 by Seth Pearson, CFP® as a sole proprietorship and filed for investment adviser registration with the State of Massachusetts in October 1996. In March 2009, Pearson and Associates, LLC was formed. In October 2015, three additional members were added: Coral Murphy, CRD #3145896, Bryan Bastoni, CRD #4457061, and Kathleen Fowler, CRD #5184846. After the death of Mr. Pearson in May 2016, these three members became equal owners and Members of the firm. In July 2026, the firm filed for registration with the U.S. Securities and Exchange Commission (SEC). Additional business information about the members is disclosed in Item 19 and/or in the Supplemental Brochure attached to this Brochure. B. Asset Allocation and Portfolio Management Services An initial free, no-obligation meeting is offered to introduce Pearson Financial's services and fees. Once there is mutual agreement on fit and desire to work together, we will request a number of documents to help understand your overall financial situation. Pearson Financial will gather financial information and history from you such as your retirement and financial goals, investment objectives, investment horizon, financial needs, cash flow analysis, cost of living needs, education needs, savings tendencies, and other applicable financial information to provide the investment advisory services requested. All information gathered from you is confidential. After evaluating the information, we customize a portfolio allocation taking into consideration your limitations or restrictions, the market and economy at the time and your financial situation, goals and objectives. We offer an integrated process with a team to meet investment, tax, and estate planning needs under one roof. The results are a fully integrated wealth management process. Your Advisory Representative will schedule a meeting with you and present the recommended portfolio. Upon your approval, we will implement the initial portfolio allocation. Pearson Financial offers asset allocation and portfolio management services on a non-discretionary basis. Our investment advice is tailored to meet our clients' needs and investment objectives.Your Advisory Representative will contact you to discuss our recommendations. No changes will be made to the allocation of your account without prior consultation with you. You have an unrestricted right to decline to implement any advice provided by our firm on a non-discretionary basis. If your financial situation or investment goals or objectives change, you must notify Pearson Financial promptly of the changes. Depending on your specific goals and objectives, we will generally hold positions in your account for a long term, even more than a year. Our Advisory Representatives primarily use open-ended mutual funds including no-load and load waived, or mutual funds purchased at net asset value (NAV). We generally use a broad spectrum of Vanguard Index and exchange traded funds (ETFs). However, advisory accounts are not exclusively limited to mutual funds and ETFs and may include stocks and bonds, certificates of deposits, government securities, money markets and annuities, as appropriate. Transactions in the account, account reallocations and rebalancing may trigger a taxable event, with the exception of IRA accounts, 403(b) accounts and other qualified retirement accounts. 4  As further described below, Pearson Financial recommends that you engage Charles Schwab & Co., Inc. ("Schwab"), a registered broker-dealer, member SIPC, as the qualified custodian. Additionally, some of the Advisory Representatives of Pearson Financial are dually registered as a Registered Representative of Purshe Kaplan Sterling Investments ("PKS"). PKS is a FINRA registered broker-dealer. As further described below, some of Pearson Financial's Advisory Representatives have entered into a relationship to offer you brokerage services as Registered Representatives of PKS. There is no affiliation between Pearson Financial, Schwab, or PKS. Our Advisory Representatives that are also Registered Representatives must adhere to FINRA rules and regulations and the policies and procedures of PKS. PKS's policies and procedures and FINRA rules prohibit them from conducting transactions at a broker/dealer for which approval has not been obtained from PKS. You may deposit assets on which a commission was previously paid, including mutual funds on which a sales charge was paid, to a fee-based account. If your Advisory Representative received the commission in the capacity as a Registered Representative of a broker-dealer, your advisory fee will be offset for any commissions earned. C. We tailor the advisory services we offer to your individual needs and to meet the financial advice your seek.You may impose restrictions on investing in certain securities or types of securities.Your specific information is obtained during our in-person interviews. The information gathered by Pearson Financial will assist the firm in providing you with the requested services and customize the services to your financial situation. Depending on the services you have requested, we will gather various financial information and history from you including, but not limited to: Investment objectives Investment horizon • Retirement and financial goals • • • Financial needs • Cash flow analysis • Cost of living needs • Education needs • Savings tendencies • Other applicable financial information required by our Advisory Representative to provide the investment advisory services you have requested. With most clients, there will be more than one meeting with possibly as many as four to five meetings, depending on the scope of the engagement and the number of iterations of a plan. Generally, all recommendations will be made and discussed with you during our meetings. D. Pearson Financial sponsors the PFS Wrap Fee Program. Clients participating in the PFS Wrap Fee Program will receive asset allocation and portfolio management services along with brokerage and custodial services for an all-inclusive fee. Under a wrap fee program, you will not pay separate transaction charges or account maintenance fees on accounts held in custody with Schwab. All such fees and expenses will be borne by Pearson Financial. Pearson Financial and its Advisory Representatives will receive a portion of the wrap fee for providing advisory services. 5  There is no difference in the asset allocation/portfolio monitoring service we offer for wrap fee accounts and other accounts (i.e., non-wrap fee accounts). The only significant difference is the way in which transaction charges are paid. Clients should read the wrap fee program disclosure brochure (Part 2A Appendix 1) for more complete information. E. As of June 10, 2026, we provide investment management services for $885,000,000 in client assets on a non-discretionary basis. We also service $75,000,000 in client assets on a non-continuous basis. General Information The investment recommendations and advice offered by Pearson Financial and your Advisory Representative are not legal advice or accounting advice. You should coordinate and discuss the impact of financial advice with your attorney and/or accountant. Our primary goal is to help our clients identify and pursue their financial goals, thereby enhancing the overall quality of their lives. IRA Rollover Recommendations Effective December 20, 2021 (or such later date as the US Department of Labor ("DOL") Field Assistance Bulletin 2018-02 ceases to be in effect), for purposes of complying with the DOL's Prohibited Transaction Exemption 2020-02 ("PTE 2020-02") where applicable, we are providing the following acknowledgment to you. When we provide investment advice to you regarding your retirement plan account or individual retirement account, we are fiduciaries within the meaning of Title I of the Employee Retirement Income Security Act and/or the Internal Revenue Code, as applicable, which are laws governing retirement accounts. The way we make money creates some conflicts with your interests, so we operate under a special rule that requires us to act in your best interest and not put our interest ahead of yours. Under this special rule's provisions, we must: • Meet a professional standard of care when making investment recommendations (give prudent advice); • Never put our financial interests ahead of yours when making recommendations (give loyal advice); • Avoid misleading statements about conflicts of interest, fees, and investments; • Follow policies and procedures designed to ensure that we give advice that is in your best interest; • Charge no more than is reasonable for our services; and • Give you basic information about conflicts of interest. We benefit financially from the rollover of your assets from a retirement account to an account that we manage or provide investment advice, because the assets increase our assets under management and, in turn, our advisory fees. As a fiduciary, we only recommend a rollover when we believe it is in your best interest. IRA Rollover Considerations As part of our consulting and advisory services, we may provide you with recommendations and advice concerning your employer retirement plan or other qualified retirement account. We may recommend that you withdraw the assets from your employer's retirement plan or other qualified retirement account and roll the assets over to an individual retirement account ("IRA") which we will provide asset allocation/portfolio monitoring services. If you elect to roll the assets to an IRA under our portfolio monitoring services, we will charge you an asset-based fee as described in Item 5. This practice presents a conflict of interest because our investment advisory representatives have an incentive to recommend a rollover to you for the purpose of generating fee based compensation rather than solely based on your needs. You are under no obligation, contractually or otherwise, to complete the rollover. 6  Furthermore, if you do complete the rollover, you are under no obligation to have your IRA assets monitored by us. You have the right to decide whether or not to complete the rollover and the right to consult with other financial professionals. Employers may permit former employees to keep their retirement assets in their company plan. Also, current employees can sometimes move assets out of their company plan before they retire or change jobs. In determining whether to complete the rollover to an IRA, and to the extent the following options are available, you should consider the costs and benefits of each. An employee will typically have four options: 1. Leave the funds in your employer's (former employer's) plan. 2. Roll over the funds to a new employer's retirement plan. 3. Cash out and take a taxable distribution from the plan. 4. Roll the funds into an IRA rollover account. Each of these options has advantages and disadvantages. Before making a change, we encourage you to speak with your financial advisor, CPA and/or tax attorney. Before rolling over your retirement funds to an IRA for us to monitor, carefully consider the following. NOTE: This list is not exhaustive. 1. Determine whether the investment options in your employer's retirement plan address your needs or whether other types of investments are needed. a. Employer retirement plans generally have a more limited investment menu than IRAs. b. Employer retirement plans may have unique investment options not available to the public such as employer securities or previously closed funds. 2. Your current plan may have lower fees than our fees. a. If you are interested in investing only in mutual funds, you should understand the cost structure of the share classes available in your employer's retirement plan and how the costs of those share classes compare with those available in an IRA. b. You should understand the various products and services available through an IRA provider and their potential costs. c. It is likely you will not be charged a management fee and will not receive ongoing asset management services unless you elect to have such services. If your plan offers management services, there may be a fee associated with the service that is more or less than our asset allocation/portfolio monitoring fee. 3. Our strategy may have higher risk than the option(s) provided to you in your plan. 4. Your current plan may offer financial advice, guidance, management, and/or portfolio options at no additional cost. 5. If you keep your assets titled in a 401k or retirement account and you are still working, you could potentially delay your required minimum distribution beyond age 73. 6. Your 401k may offer more liability protection than a rollover IRA; each state may vary. Generally, federal law protects assets in qualified plans from creditors. Since 2005, IRA assets have been generally protected from creditors in bankruptcies; however, there can be exceptions. Consult an attorney if you are concerned about protecting your retirement plan assets from creditors. 7. You may be able to take out a loan on your 401k, but not from an IRA. 8. IRA assets can be accessed any time; however, prior to age 59 ½, distributions are subject to ordinary income tax and may also be subject to a 10% early distribution penalty unless they qualify for an exception such as disability, higher education expenses, or a home purchase. 9. If you own company stock in your plan, you may be able to liquidate those shares at a lower capital gains tax rate. 7  10.Your plan may allow you to hire us as the investment adviser and keep the assets titled in the plan name. It is important that you understand your options, their features and differences and decide whether a rollover is best for you. If you have questions, contact us at our main number listed on the cover page of this brochure. Item 5 Fees and Compensation Asset Allocation and Portfolio Management Services A. Pearson Financial offers asset allocation and portfolio management services as a wrap fee account or non-wrap fee account. In a wrap fee account, you pay one inclusive fee that covers advisory, brokerage and execution services. Under a non-wrap fee account, you pay an advisory fee plus separate fees for execution of transactions. Our fees are negotiable and are not based on a share of capital gains or capital appreciation of the funds or any portion of the funds in your account. Generally, the minimum total advisory fee, per household, is $1,000 per year. We will deduct our fees for asset allocation and portfolio management directly from your account, pursuant to authorization included in our investment management agreement. Some clients may elect to receive an invoice and pay by check. Generally, the Fee Schedule is as follows: Account Size Maximum Annual Fee $0 to $2,500,000 1.00% $2,500,001 - $5,000,000 0.50% $5,000,001 and greater 0.25% *Note: Annual asset allocation/portfolio management fee is based on an aggregate value of all accounts within the established household. We sometimes make exceptions to our general fee schedule under certain circumstances (e.g., all bond portfolios; responsibilities involved; accounts or groups of accounts which are expected to have significant capital additions in the future; anticipated future earning capacity; related accounts; account composition; pre-existing client; account retention; pro bono activities, etc.). In such cases, lower or higher fees or different payment arrangements can be negotiated with each client separately and will be described in the client's advisory agreement. As stated above, the minimum total advisory fee is generally $1,000 per year per household. Oftentimes, these are extended households (i.e., family members not living under the same roof). The minimum account size to obtain asset allocation/portfolio management services is generally $100,000. Accounts below these minimums may be accepted on an individual basis at our discretion. At no time will we charge an asset allocation/portfolio management services fee in excess of 2% of the value of the portfolio. Any household with assets less than $50,000 would be subject to a minimum fee less than $1,000 but not to exceed 2% of the value of the portfolio. You may make additions to the account or withdrawals from the account, provided the account continues to meet minimum account size requirements. No fee adjustments will be made during a period for additional deposits, partial withdrawals or for account appreciation or depreciation. 8  As a part of our comprehensive service to clients receiving asset allocation and portfolio management services, Pearson Financial offers general financial planning advice/consultation, such as: retirement planning, estate planning, tax planning, college planning and real estate analysis, at no additional charge. B. If your account is established or closed during the middle of a month, you will pay a pro-rated portion of the advisory fee based upon the number of days the account was under Pearson Financial's management. You may either elect to have us bill you each quarter for your Asset Allocation/Portfolio Management fees or you may authorize us to instruct the custodian to deduct the advisory fee directly from your account. You will need to grant Pearson Financial the authorization to instruct the custodian to debit your fee. If the fees are deducted directly from an account, Schwab will provide you with a quarterly statement that lists the total fees deducted from the account as well as all transactions that were conducted in the account that quarter. C. In addition to the advisory fees above, you may pay transaction fees for securities transactions executed in your account in accordance with the custodian's transaction fee schedule. You may also pay fees for custodial services, account maintenance fees, and other fees associated with maintaining the account. These fees are not charged by Pearson Financial and are charged by the mutual fund company or account custodian. Pearson Financial does not share in any portion of these fees. These separate fees are factored into our single, inclusive fee for the PFS Wrap Fee Program. Your fee may be higher or lower if you were to obtain these services separately. If you participate in our wrap fee program, you will not pay separate ticket charges and execution fees or account maintenance fees on those assets held at Schwab. You should read the wrap fee program disclosure brochure (Part 2A Appendix 1) for additional disclosures. Additionally, you may pay your proportionate share of the fund's management and administrative fees and sales charges as well as the mutual fund adviser's fee of any mutual fund they purchase. These advisory fees are not shared with Pearson Financial and are compensation to the fund manager. More information is available in the mutual fund prospectus. D. The advisory fee is billed in arrears (i.e., at the end of the billing period) quarterly. Fees will be based on the value of the account on the last business day of the calendar quarter. If your account does not contain sufficient funds to pay the advisory fees, we have the limited authority to sell or redeem securities in sufficient amounts to pay advisory fees. Except for ERISA and IRA accounts, you may reimburse your account for advisory fees paid to Pearson Financial. Fee calculation example for a $650,000 dollar account: • Quarterly Fee is $1,625: $650,000 x 1.00% = $6,500 divided by 4. Termination Provisions You may terminate investment advisory services obtained from Pearson Financial, without fee or penalty, upon written notice within five (5) business days after entering into the advisory agreement with Pearson Financial. You will, however, be responsible for any fees and charges incurred from third parties as a result of maintaining the account, such as transaction fees for any securities transactions executed and account maintenance or custodial fees. Thereafter, you may terminate investment advisory services with written notice to Pearson Financial. If you terminate investment advisory services during a quarter, you may be charged a pro-rata portion of the advisory fee for the quarter up to the date of termination. 9  E. Some products such as load and no-load mutual funds may pay annual distribution charges, sometimes referred to as 12b-1 fees. 12b-1 fees come from fund assets, therefore, indirectly from investor assets. Where applicable and for those accounts under its custody, Schwab will retain the 12b-1 fees. Pearson Financial will not receive these fees. Advisory fees will always be offset for commissions earned on securities transactions executed in pension, profit-sharing, 401k, IRA or other client accounts where to do otherwise would constitute a prohibited transaction under the provisions of ERISA or the Internal Revenue Code. Pearson Financial will attempt to mitigate conflicts of interest by: Informing you of conflicts of interest in our disclosure document and agreement; • • Maintaining and abiding by our Code of Ethics which requires us to place your interests first and foremost; • Advising you of the right to decline to implement our recommendations and the right to choose other financial professionals for implementation. In addition, in their capacity as Registered Representatives of PKS our Advisory Representatives are subject to PKS's supervision. Item 6 Performance-Based Fees and Side-By-Side Management Pearson Financial does not charge performance-based fees and therefore does not engage in side-by- side management. Item 7 Types of Clients The advisory services offered by Pearson Financial are geared toward individuals and their families including high-net-worth clients, trusts and estates. The minimum account size to obtain asset allocation/portfolio management services is generally $100,000. Accounts below these minimums may be accepted on an individual basis at our discretion. Such circumstances may include, but not be limited to, (1) additional assets will soon be deposited or (2) the client has other accounts with Pearson Financial. You should be aware that performance may suffer due to difficulties with diversifying smaller accounts and that a lack of diversification can lead to greater portfolio risk. Performance of smaller accounts may vary from the performance of accounts with more dollars invested since fluctuations in the market may affect smaller accounts more. Generally, Pearson Financial Services' minimum total advisory fee, per household, is $1,000 per year. At no time will we charge an asset allocation/portfolio management services fee in excess of 2%. Any household with assets less than $50,000 would be subject to a minimum fee less than $1,000 but not to exceed 2% of the value of the portfolio. Item 8 Methods of Analysis, Investment Strategies and Risk of Loss A. Pearson Financial conducts economic analysis and attempts to analyze and determine the economic trends. B. Investing in securities involves risk of loss, including the potential loss of the principal money you are investing. Therefore, your participation in any of the asset allocation/portfolio management 10  programs offered by Pearson Financial requires you to be prepared to bear the risk of loss as well as the fluctuating performance of your accounts. Market values of investments will always fluctuate based on market conditions. We do not represent, warrantee or imply that the services or methods of analysis we use can or will predict future results, successfully identify market tops or bottoms or insulate you from losses due to major market corrections or crashes. Past performance is no indication of future performance. No guarantees can be offered that your goals or objectives will be achieved. Further, no promises or assumptions can be made that the advisory services offered by Pearson Financial or our Advisory Representatives will provide a better return than other investment strategies. Our Methods of Analysis and Investment Strategies We use one or more of the following methods of analysis or investment strategies when providing investment advice to you: Modern Portfolio Theory - a theory of investment which attempts to maximize portfolio expected return for a given amount of portfolio risk, or equivalently minimize risk for a given level of expected return, by carefully diversifying the proportions of various assets. Risk: Market risk is that part of a security's risk that is common to all securities of the same general class (stocks and bonds) and thus cannot be eliminated by diversification. Long-Term Purchases - securities purchased with the expectation that the value of those securities will grow over a relatively long period of time, generally greater than one year. Risk: Using a long-term purchase strategy generally assumes the financial markets will go up in the long-term which may not be the case. There is also the risk that the segment of the market that you are invested in or perhaps just your particular investment will go down over time even if the overall financial markets advance. Purchasing investments long-term may create an opportunity cost - "locking-up" assets that may be better utilized in the short-term in other investments. The primary risk factors applicable to our investment program generally include: • Market risk-The price of a security, bond, mutual fund and/or exchange-traded fund may drop in reaction to tangible and intangible events and conditions. This type of risk is caused by external factors independent of a security's particular circumstances. For example, economic, political and social conditions may trigger market-related events. • Interest rate risk-The chance that investment prices will change based on a move in interest rates (bond prices decline as interest rates rise). Relative to fixed income securities with near- term maturities, longer maturity bonds will have a larger change in price with a move in interest rates. • Inflation risk-The risk that investment returns will be below the general increase in prices due to inflation. • Category or style risk-The chance that one investment category or style may underperform or outperform other categories and styles. • Credit risk-The chance that a bond issuer will fail to pay interest and principal in a timely 11  manner. • Reinvestment risk-The potential exposure that future proceeds from investments may have to be reinvested at a potentially lower rate of return (i.e. interest rate). This primarily relates to fixed income securities. • Early redemption risk-Some bonds have features that allow the bond issuer to repurchase or redeem the bond before maturity at a specific price. This risk is the chance that the borrower will do so; thus, expose the investor to a lower than expected return on that bond investment. • Systematic risk-Also known as "market risk," this is the chance of a severe drop of an entire financial market (e.g., political or social upheaval, natural disaster, etc.). • Unsystematic risk-Also known as "specific risk," this is the chance of a decline in the value of a particular asset (i.e., an individual stock declines while the overall stock market is not impacted). • Currency risk-Also known as "exchange rate risk," this is the chance that foreign investments will be subject to fluctuations in the value of the dollar against the currency of the investment's country of origin. • Tax risk-This is the chance that the taxing authority changes its tax rates or policies (e.g., rescind tax-exempt status of particular bonds). • Liquidity risk-This is the risk whereby the ability to buy or sell a security becomes more difficult and, therefore, negatively impacts the price at which one is able to transact in the security. • Financial risk-Excessive borrowing to finance the ongoing operations of a business increases the risk of profitability, because the company must meet the terms of its obligations in good times and bad. During periods of financial stress, the inability to meet loan obligations may result in bankruptcy and/or declining market value. • Sector risk-This is the chance that major problems may impact a specific sector, or that returns from that sector may trail the returns of the overall equity market. Daily fluctuations in individual sectors can often be more extreme than fluctuations in in the overall market. • Price volatility-The price of a security, mutual fund and/or exchange-traded fund may fluctuate, even significantly, in a short period of time. • Exchange-traded fund pricing risk-Exchange-traded fund shares may trade in the market at a premium or discount to their net asset (NAV) because of market supply and demand. The premiums and discounts for specific exchange-traded funds can vary, depending on the type of exchange-traded fund and time period. C. Our advice may include the recommendation of mutual funds to meet a client's planning objectives for diversification. The risks with mutual funds include the costs and expenses within the fund that can impact performance, change of managers and/or the fund straying from its stated investment objective. Open-ended mutual funds do not typically have a liquidity issue and the price does not fluctuate throughout the trading day. Mutual fund fees are described in the fund's prospectus, which the custodian mails directly to the client following any purchase of a mutual fund that is new to the client's 12  account. In addition, a prospectus is available online at each mutual fund company's website. At the client's request, Pearson Financial will direct the client to the appropriate web page to access the prospectus. Pearson Financial may also use ETFs in our portfolios. The risks with ETFs include the fact that actively traded ETFs can create increased trading expenses and fees and the intraday trading opportunities created by ETFs may not fit into a long-term investor's strategy. ETFs are usually easy to buy and sell. In managing the cash maintained in your account, we utilize the sole exclusive cash vehicle (money market) made available by the custodian. There may be other cash management options away from the custodian available to you with higher yields or safer underlying investments. When managing your portfolio, Pearson Financial considers cash and cash equivalents to be an asset class. At times, your fee will exceed the money market yield. Your cash position is included in our fee calculation. Item 9 Disciplinary Information Registered Investment Advisers must disclose any legal or disciplinary events that would be material to your evaluation of Pearson Financial or the integrity of our management. There is no reportable disciplinary information required for Pearson Financial or its management persons. Item 10 Other Financial Industry Activities and Affiliations A., B, Pearson Financial does not have a related person who is a: broker/dealer or other similar type of broker or dealer; investment company or other pooled investment vehicle, other investment adviser or financial planner; futures commission merchant or commodity pool operator; banking or thrift institution; insurance company or agency; pension consultant; real estate broker or dealer; or sponsor or syndicator of a limited partnership. C. As previously stated, some of our Advisory Representatives are dually registered Advisory Representatives of Pearson Financial and as Registered Representatives of Purshe Kaplan Sterling Investments ("PKS"). You are under no obligation to purchase or sell securities through them. Commissions and/or advisory fees may be earned in addition to any fees paid for our advisory services. Commissions may be higher or lower at PKS than at other broker/dealers. Advisory Representatives who are Registered Representatives and insurance licensed have an inherent conflict of interest in having you purchase securities and/or insurance related products through PKS in that the higher their production with PKS the greater potential for obtaining a higher pay-out on commissions earned. NOTE: No commissions will be charged on assets in our Asset Allocation/Portfolio Monitoring program. Under the rules and regulations of the Financial Industry Regulatory Authority ("FINRA"), PKS has an obligation to perform certain supervisory functions regarding certain activities engaged in by Advisory Representatives who are also Registered Representatives of PKS. PKS and Pearson Financial are not affiliated. Bryan Bastoni is a licensed insurance agent, but the license is maintained for educational purposes only. However, he will earn trailing commissions if you purchased insurance products through him in his role as an insurance agent. This creates a conflict of interest. You are under no obligation to continue your insurance products or services through him. 13  Christopher Dupee, an Advisory Representative of Pearson Financial, is a CPA at Sanders Walsh & Eaton, CPA, LLC. As such, he spends approximately 80% of his time providing accounting, tax review, and compiled financial statement services for a fee. Fees for accounting services are in addition to fees paid for advisory services. Clients have the right to decide whether or not to engage his services. Kathleen Fowler, JD, is a member of Pearson Financial and owner of Law Offices of Kathleen Fowler, LLC. Debra Coccoro, JD, is the owner of Law Office of Debra Coccoro, LLC. Ms. Fowler and Ms. Coccoro are lawyers and offer various legal services for a fee. Fees for legal services are in addition to fees paid for advisory services. Both lawyers serve as solicitors for Pearson Financial in the State of Massachusetts, referring clients in need of advisory services to Pearson Financial in exchange for a referral fee. William Lord, an Advisory Representative of Pearson Financial, is an Estate Administrator with the Law Office of Kathleen Fowler. Mr. Lord may recommend the services of the law firm to advisory clients of Pearson Financial Services. Clients have the right to decide whether or not to engage these services. Clients in need of the law firm services are under no obligation to use the services of Mr. Lord, as an Estate Administrator, or the law firm. However, if you decide to use those services, you will be assessed fees, which are in addition to the fees for advisory services. Pearson Financial attempts to mitigate the conflicts of interest by notifying you of these conflicts. We inform you that you have the right to decide whether or not to engage services and purchase products and which professionals to use. You are free to consult other financial professionals and you may implement recommendations through these professionals. We are bound by our Code of Ethics to act in an ethical manner. Furthermore, Registered Representatives with PKS are subject to a supervisory structure at PKS for their securities business. Pearson Financial and its Advisory Representative are not actively engaged in any other financial industry entity. D. Pearson Financial does not recommend the services of a Third Party Manager. Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Code of Ethics A. Pearson Financial has a fiduciary duty to you to act in your best interest and always place your interests first and foremost. Pearson Financial takes seriously its compliance and regulatory obligations and requires all staff to comply with such rules and regulations as well as our policies and procedures. Further, we strive to handle your non-public information in such a way to protect information from falling into the hands of anyone who has no business reason to know such information. We provide you with our Privacy Policy, which details our procedures for handling your personal information. Pearson Financial maintains a Code of Ethics for its Advisory Representatives, supervised persons and office staff. The Code of Ethics contains provisions for standards of business conduct to comply with federal securities laws, personal securities reporting requirements, pre- approval procedures for certain transactions, code violations reporting requirements, and safeguarding of material non-public information about your transactions. Further, our Code of Ethics establishes our firm's expectation for business conduct. A copy of our Code of Ethics will be provided to you upon request. B. Neither Pearson Financial nor its associated persons recommends to clients or buys or sells for client accounts any securities in which we have a material financial interest. 14  C. Pearson Financial and its associated persons may buy or sell securities identical to those securities recommended to you. Therefore, Pearson Financial and/or its associated persons may have an interest or position in certain securities that are also recommended and bought or sold to you. They will not put their interests before your interest. Neither Pearson Financial nor any associated person may trade ahead of you or trade in such a way to obtain a better price for themselves than for you or other clients. No affiliated person may trade in a client's account in such a way as to disadvantage any client. D. Pearson Financial is required to maintain a list of all securities holdings for its associated persons and develop procedures to supervise the trading activities of associated persons who have knowledge of your transactions and their related family accounts at least quarterly. Further, associated persons are prohibited from trading on non-public information or sharing such information. You have the right to decline to implement any investment recommendation. Pearson Financial and its associated persons are required to conduct their securities and investment advisory business in accordance with all applicable Federal securities regulations. Item 12 Brokerage Practices A. As previously stated, Bryan Bastoni is insurance licensed. He maintains his insurance license for educational purposes. See Item 10 for more information regarding the conflicts of interest these affiliations create. Not all investment advisers require you to maintain accounts at a specific broker/dealer. You may maintain accounts at another broker/dealer. If you choose to do so, the services provided by Pearson Financial will be limited to investment advice only and will not include implementation. We recommend Charles Schwab & Co., Inc (Schwab), member FINRA/SIPC, for custody and brokerage services. Schwab are independent and unaffiliated SEC-registered broker-dealers. Schwab offer to independently registered investment advisers services that include custody of securities, trade execution, and clearance and settlement of transactions. Pearson Financial receives some benefits from Schwab through its participation in their programs. In initially Schwab, Pearson Financial conducted due diligence. We examined the ability to service you, staying power as a company, industry reputation, reporting ability, trading platform, products and services available, technology resources, and educational resources. We consider Schwab's commissions to be reasonable in comparison to the value provided although they may be higher or lower as compared to online or other discount broker-dealers. Additionally, product sponsors such as variable annuity and investment companies may provide support to Pearson Financial's Advisory Representatives who are Registered Representatives and insurance agents. Such support includes research, educational information, and monetary support for due diligence trips and client events. We receive a benefit because we do not have to pay for the research, products, or services. Schwab makes available to Pearson Financial other products and services that benefit us but may not directly benefit you. Some of these other products and services assist us with managing and administering your accounts. These include software and other technology that provide access to your account data (such as trade confirmation and account statements); facilitate trade execution; provide research, pricing information, and other market data; facilitate payment of our advisory fees from your accounts; and assist with back-office functions; recordkeeping and client reporting. Many of these services generally may be used to service all or a substantial number of Pearson Financial clients, including clients who do not maintain accounts at Schwab. 15  Schwab We are independently owned and operated and are not affiliated with Schwab. Schwab will hold your assets in a brokerage account and buy and sell securities when you instruct them to. While we recommend that you use Schwab as custodian/broker, you will decide whether to do so and will open your account with Schwab 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. If you do not wish to place your assets with Schwab, then we cannot provide your account with asset allocation/portfolio monitoring services. Not all advisers require their clients to use a particular broker- dealer or other custodian selected by the adviser. Even though your account is maintained at Schwab, and we anticipate that most trades will be executed through Schwab, we can still use other brokers to execute trades for your account as described below (see "Your brokerage and custody costs"). How we select brokers/custodians • We seek to use Schwab, a custodian/broker that will hold your assets and execute transactions. When considering whether the terms that Schwab 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 (generally without a separate fee for custody) • Capability to execute, clear, and settle trades (buy and sell securities for your account) • Capability to facilitate transfers and payments to and from accounts (wire transfers, check requests, bill payment, 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 or paid for by Schwab • Availability of other products and services that benefit us, as discussed below (see "Products and services available to us from Schwab"). Your brokerage and custody costs For our clients' accounts that Schwab maintains, Schwab generally does not charge you separately for custody services but is compensated by charging you commissions or other fees on trades that it executes or that settle into your Schwab account. Certain trades (for example, many mutual funds and ETFs) may not incur Schwab commissions or transaction fees. Schwab is also compensated by earning interest on the uninvested cash in your account in Schwab's Cash Features Program. Schwab charges you a flat dollar amount as a "prime broker" or "trade away" fee for each trade that we have executed by a different broker-dealer but where the securities bought or the funds from the securities sold are deposited (settled) into your Schwab account. These fees are in addition to the commissions or other compensation you pay the executing broker-dealer. Because of this, in order to minimize your trading costs, we have Schwab execute most trades for your account. 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, we have determined that having Schwab execute most trades is consistent with our 16  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/custodians"). By using another broker or dealer you may pay lower transaction costs. Products and services available to us from Schwab Schwab Advisor Services™ is Schwab'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 retail customers. However, certain retail investors may be able to get institutional brokerage services from Schwab without going through us. Schwab also makes 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. Schwab's support services are generally available on an unsolicited basis (we don't have to request them) and at no charge to us. Following is a more detailed description of Schwab's support services. Services that benefit you. 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 we might not otherwise have access or that would require a significantly higher minimum initial investment by our clients. Schwab's services described in this paragraph generally benefit you and your account. Services that do not directly benefit you. Schwab also makes 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's own and that of third parties. We use this research to service all or a substantial number of our clients' accounts, including accounts not maintained at Schwab. In addition to investment research, Schwab also 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 • Provide pricing and other market data • Facilitate payment of our fees from our clients' accounts • Assist with back-office functions, recordkeeping, and client reporting Services that generally benefit only us. Schwab also offers other services intended to help us manage and further develop our business enterprise. These services 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 provides some of these services itself. In other cases, it will arrange for third-party vendors to provide the services to us. Schwab also discounts or waives its fees for some of these services or pays all or a part of a third party's fees. Schwab also provides us with other benefits, such as occasional business entertainment of our personnel. If you did not maintain your account with Schwab, we would be required to pay for these services from our own resources. 17  Our interest in Schwab's services The availability of these services from Schwab benefits us because we do not have to produce or purchase them. We don't have to pay for Schwab's services. These services are not contingent upon us committing any specific amount of business to Schwab in trading commissions or assets in custody. The fact that we receive these benefits from Schwab is an incentive for us to recommend the use of Schwab rather than making such a decision based exclusively on your interest in receiving the best value in custody services and the most favorable execution of your transactions. This is a conflict of interest. We believe, however, that taken in the aggregate, our recommendation of Schwab as custodian and broker is in the best interests of our clients. Our selection is primarily supported by the scope, quality, and price of Schwab's services (see "How we select brokers/ custodians") and not Schwab's services that benefit only us. We believe our recommendation of Schwab is appropriate based on the level of service provided and the appropriate fees charged. As stated previously, certain products that we recommend may pay 12b-1 fees. Where applicable and for those accounts under its custody, Schwab will retain the 12b-1 fees. Pearson Financial will not receive these fees. B. Due to the individual management of client accounts, we do not aggregate the purchase or sale of securities for various client accounts. Item 13 Review of Accounts A. While money market balances within Asset Allocation/Portfolio Management Services accounts are reviewed quarterly, individual client accounts are typically reviewed annually. We will attempt to contact you at least annually or as agreed by you and your Advisory Representative. You may request more frequent reviews and may set thresholds for triggering events that would cause a review to take place. You are advised that you must notify your Advisory Representative promptly of any changes to your financial goals, objectives or financial situation as such changes may require him to review the portfolio allocation and make recommendations for changes. B. Your Advisory Representative will monitor for changes or shifts in the economy, changes to the management and structure of a fund or company in which your assets are invested, and market shifts and corrections. C. You will be provided statements at least quarterly direct from the account custodian. Additionally, you will receive confirmations of all transactions occurring direct from the account custodian. Other than the initial plan or analysis, there will be no other reports issued. Generally, all recommendations will be made and discussed with you during our meetings. Item 14 Client Referrals and Other Compensation A. Product vendors recommended by Pearson Financial's Advisory Representatives may provide monetary and non-monetary assistance with client events, provide educational tools and resources. We do not select products as a result of any monetary or non-monetary assistance. The selection of product that is most appropriate for the client is first and foremost. Pearson Financial's due diligence of a product does not take into consideration any assistance it may receive. Although the receipt of products or services is a benefit for you and us, it also presents a conflict of interest. Pearson Financial attempts to mitigate the conflict of interest by notifying you of the conflict. We inform you that you are free to consult other financial professionals. We are bound by our Code of Ethics to act in an ethical manner. 18  We receive an economic benefit from Schwab in the form of the support products and services it makes available to us and other independent investment advisers whose clients maintain their accounts at Schwab. You do not pay more for assets maintained at Schwab as a result of these arrangements. However, we benefit from the referral arrangement because the cost of these services would otherwise be borne directly by us. You should consider these conflicts of interest when selecting a custodian.These products and services, how they benefit us, and the related conflicts of interest are described above (see Item 12 - Brokerage Practices). The availability to us of Schwab's products and services is not based on us giving particular investment advice, such as buying particular securities for our clients. B. We may directly or indirectly compensate any person who is not a supervised person of our firm for referrals. Pearson Financial and our Advisory Representatives may enter into arrangements with individuals ("Solicitor") whereby the Solicitor will refer clients who may be a candidate for our investment advisory services. In return, we will compensate the Solicitor for the referral. Compensation to the Solicitor is dependent on the client entering into an advisory agreement with us for advisory services. Compensation to Solicitor will be a percentage of Pearson Financial's advisory fee or a flat fee as agreed upon between us and the Solicitor. Our referral program is in compliance with state regulations. The solicitation/referral fee is paid according to a written agreement entered into between Pearson Financial and the Solicitor. The Solicitor will be required to provide the client with a copy of our Form ADV as well as a Solicitor Disclosure brochure at the time the referral is made. The Solicitor is not permitted to offer clients any investment advice on our behalf. Advisory fees will not be increased as a result of compensation being shared with the Solicitor. Item 15 Custody Pearson Financial does not have physical custody of any client funds or securities. However, under government regulations, we are deemed to have constructive custody of your assets if you authorize us to instruct your custodian to deduct our advisory fees directly from your account. Your custodian, Schwab, maintains the actual custody of your assets. You will receive account statements directly from Schwab at least quarterly. They will be sent to the email or postal mailing address you provided to them. You should carefully review those statements promptly when you receive them. You should compare the quarterly account statements received from Schwab with the quarterly explanatory invoice you receive from Pearson Financial. Please see Item 5 for more information regarding the deduction of advisory fees from client accounts. Item 16 Investment Discretion Pearson Financial does not accept discretionary authority to manage securities accounts on behalf of clients. We provide non-discretionary asset allocation/portfolio management services. We will contact you prior to making any proposed change to your account. Item 17 Voting Client Securities Pearson Financial does not vote your securities. Unless you suppress proxies, securities proxies will be sent directly to you by the account custodian or transfer agent. You may contact your Advisory Representative about questions you may have and opinions on how to vote the proxies. However, the decision to vote and how you vote the proxies is solely up to you. 19  Item 18 Financial Information A. Pearson Financial will not require you to prepay more than $1,200 and 6 or more months in advance of receiving the advisory service; therefore, a balance sheet is not required to be attached. B. Pearson Financial does not have discretionary authority over client accounts. We are financially stable. There is no financial condition that is likely to impair our ability to meet our contract actual commitment to you or any other client. C. Neither Pearson Financial nor its Advisory Representative has ever been the subject of a bankruptcy petition. Item 19 Requirements for State Registered Advisers We are a federally registered investment adviser; therefore, we are not required to respond to this item. 20