Watchdog Planning LLC
2415 Linden Drive
Havertown, PA 19083
Date of Disclosure Brochure: March 2019
This disclosure brochure provides information about the qualifications and business practices of Watchdog Planning LLC (also referred to as we, us and Watchdog Planning throughout this disclosure brochure). If you have any questions about the contents of this disclosure brochure, please contact Nancy Nawn at 610-283-5720 or firstname.lastname@example.org. The information in this disclosure brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority.
Additional information about Watchdog Planning is also available on the Internet at www.adviserinfo.sec.gov. You can view our firm’s information on this website by searching for Watchdog Planning LLC or our firm’s CRD number 289978.
*Registration as an investment adviser does not imply a certain level of skill or training.
Watchdog Planning has made the following material changes since the previous annual filing of this brochure:
No Material Changes.
In the future, this item will discuss only specific material changes that are made to the disclosure brochure and provide readers with a summary of such changes. We will also reference the date of the last annual update of this disclosure brochure.
We will ensure that you receive a summary of any material changes to this and subsequent disclosure brochures within 120 days after our firm’s fiscal year ends. Our firm’s fiscal year ends on December 31, so you will receive the summary of material changes no later than April 30 each year. At that time, we will also offer or provide a copy of the most current disclosure brochure. We may also provide other ongoing disclosure information about material changes as necessary.
Watchdog Planning is an investment adviser registered with the State of Pennsylvania and is a limited liability company (LLC) formed under the laws of the State of Pennsylvania.
- Nancy Nawn is the Chief Compliance Officer (CCO) and Managing Member of Watchdog Planning. Nancy Nawn owns 100.00% of Watchdog Planning. Full details of the education and business background of Nancy Nawn are provided at Item 19 of this Disclosure Brochure.
- Watchdog Planning filed its initial application to become registered as an investment adviser in October 2017.
The investment advisory services of Watchdog Planning are provided to you through an appropriately licensed and qualified individual who is an investment adviser representative of Watchdog Planning (referred to as your investment adviser representative throughout this brochure).
The following are descriptions of the primary advisory services of Watchdog Planning. Please understand that a written agreement, which details the exact terms of the service, must be signed by you and Watchdog Planning before we can provide you the services described below.
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Financial Planning Services
Watchdog Planning offers financial planning services, which involves preparing a written financial plan covering specific or multiple topics. We provide full written financial plans, which typically address the following topics: Budgeting, Cash Flow Analysis, Investment Planning, Retirement Planning, College/Education Planning, Estate Planning, Risk Management, Debt Management and Asset Allocation. When providing financial planning services, the role of your investment adviser representative is to find ways to help you understand your overall financial situation and help you set financial objectives. We also provide modular written financial plans which only cover those specific areas of concern mutually agreed upon by you and us. A modular written financial plan is limited or segmented and does not involve the creation of a full written financial plan. You should be aware that there are important issues that may not be taken into consideration when your investment adviser representative develops his or her analysis and recommendations under a modular written financial plan. Written financial plans prepared by us may include specific recommendations of individual securities.
Our financial planning services do not involve implementing any transaction on your behalf or the active and ongoing monitoring or management of your investments or accounts. You have the sole responsibility for determining whether to implement our financial planning recommendations.
Watchdog Planning utilizes MoneyGuidePro, a collaborative, internet-based financial planning software that offers a unique client-centered approach.
Clients electing to use MoneyGuidePro can take advantage of a variety of tools, including:
- Streamlined Data Entry
- Social Security Analysis
- Healthcare Costs
- Recommended Scenario Options
If you elect to use MoneyGuidePro, you are required to provide us the information and documentation to be downloaded and/or input into the system. You will be provided with a unique username and password and will be able to view balances, run “what if’’ scenarios, and store/view important papers and documents.
Watchdog Planning provides investment advice on the following types of investments:
- Mutual Funds
- Exchange Traded Funds (ETFs)
- Exchange-listed Securities
- Securities Traded Over-the-Counter
- Foreign Issues
- Corporate Debt Securities
- Commercial Paper
- Certificates of Deposit
- Municipal Securities
- Variable Annuities
- Variable Life Insurance
- US Government Securities
- Hedge Funds
Although we generally provide advice only on the products previously listed, we reserve the right to offer advice on any investment product that may be suitable for each client’s specific circumstances, needs, goals and objectives.
It is not our typical investment strategy to attempt to time the market, but we may increase cash holdings modestly as deemed appropriate based on your risk tolerance and our expectations of market behavior. We may modify our investment strategy to accommodate special situations such as low basis stock, stock options, legacy holdings, inheritances, closely held businesses, collectibles, or special tax situations.
(Please refer to Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss for more information.)
Watchdog Planning’s advisory services are always provided based on your individual needs. When providing financial planning services, we work with you on a one-on-one basis through interviews and questionnaires to determine your investment objectives and suitability information.
We will not enter into an investment adviser relationship with a prospective client whose investment objectives may be considered incompatible with our investment philosophy or strategies or where the prospective client seeks to impose unduly restrictive investment guidelines.
As of December, 2018 Watchdog Planning has $0 discretionary or non-discretionary Assets Under Management.
In addition to the information provided in Item 4 – Advisory Business, this section provides additional details regarding our firm’s services along with descriptions of each service’s fees and compensation arrangements. It should be noted that lower fees for comparable service may be available from other sources. The exact fees and other terms will be outlined in the agreement between you and Watchdog Planning.
The following are the fee arrangements available for financial planning services offered by Watchdog Planning.
Fees for Financial Planning Services
Watchdog Planning provides financial planning services under an hourly fee arrangement. An hourly fee of $350 per hour is charged by Watchdog Planning for financial planning services provided under this arrangement. Before commencing financial planning services, Watchdog Planning provides an estimate of the approximate hours needed to complete the requested financial planning services. If Watchdog Planning anticipates exceeding the estimated amount of hours required, Watchdog Planning will contact you to receive authorization to provide additional services. You will pay in advance a mutually agreed upon retainer that will be available for Watchdog Planning to bill hourly fees against for our financial planning services; however, under no circumstances will Watchdog Planning require you to pay fees more than $500 more than six months in advance. The standard billing dates and events of Watchdog Planning are the following: (1) the first business day of each month; (2) the date when incurred hourly fees and expenses will cause the retainer balance to be depleted to zero; (3) the date or thereafter that Watchdog Planning substantially provides the agreed upon services; and (4) the date the engagement is terminated by either you or Watchdog Planning. Upon presentment of the invoice to you, Watchdog Planning will deduct the hourly fees due Watchdog Planning against your current retainer balance and you are required to pay immediately Watchdog Planning any outstanding balance of hourly fees due.
Watchdog Planning also provides financial planning services under a fixed fee arrangement. A mutually agreed upon fixed fee is charged for financial planning services under this arrangement. There is a range in the amount of the fixed fee charged by Watchdog Planning for financial planning services. The minimum fixed fee is generally $600, and the maximum fixed fee is generally no more than $3,000. The amount of the fixed fee for your engagement is specified in your financial planning agreement with Watchdog Planning. At our sole discretion, you may be required to pay in advance $600 to $1,000 at the time you execute an agreement with Watchdog Planning; however, at no time will Watchdog Planning require payment of more than $500 in fees more than six months in advance. Upon completion and delivery of the financial plan, the fixed fee is considered earned by Watchdog Planning and any unpaid amount is immediately due.
The financial planning services terminate upon either party providing notice of termination to the other party
You may terminate the financial planning services within five (5) business days of entering into an agreement with Watchdog Planning without penalty or fees due. If you terminate the financial planning services after five (3) business days of entering into an agreement, you will be responsible for immediate payment of any financial planning services performed by Watchdog Planning prior to the receipt by Watchdog Planning of your notice. For financial planning services performed by Watchdog Planning under an hourly arrangement, you will pay Watchdog Planning for any hourly fees incurred at the rates described above. For financial planning services performed by Watchdog Planning under a fixed fee arrangement, you will pay an early termination fee for the hours worked by Watchdog Planning multiplied by the hourly rate of $350. In the event there is a remaining balance of any fees paid in advance after the deduction of fees from the final invoice, those remaining proceeds will be refunded by Watchdog Planning to you. If you are not satisfied with the financial plan prepared by Watchdog Planning, we may waive our fee; however, in such a situation, Watchdog Planning retains intellectual property rights over any written financial plan prepared by Watchdog Planning, and the written financial plan must be returned to Watchdog Planning.
Other Fee Terms for Financial Planning Services
You may pay the investment advisory fees owed for the financial planning services by submitting payment directly to Watchdog Planning via check. In the future, we may offer other forms of payment.
You should notify Watchdog Planning within ten (10) days of receipt of an invoice if you have questions about or dispute any billing entry.
All fees paid to Watchdog Planning for financial planning services are separate and distinct from the commissions charged by a broker-dealer or asset management fees charged by an investment adviser to implement such recommendations.
It should be noted that lower fees for comparable services may be available from other sources.
There are no additional fees charged for using MoneyGuidePro. Only existing clients will have access to the financial planning software.
Performance-based fees are defined as fees based on a share of capital gains on or capital appreciation of the assets held in a client’s account. Item 6 is not applicable to this Disclosure Brochure because we do not charge or accept performance-based fees.
Watchdog Planning generally provides investment advice to the following types of clients:
- High net worth individuals
- Corporations or business entities other than those listed above
You are required to execute a written agreement with Watchdog Planning specifying the particular advisory services in order to establish a client arrangement with Watchdog Planning.
There are no minimum investment amounts or conditions required for establishing an account managed by Watchdog Planning. However, all clients are required to execute an agreement for services in order to establish a client arrangement with Watchdog Planning and/or the third-party money manager or the sponsor of third-party money manager platforms.
The minimum fee generally charged for financial planning services provided on an hourly basis is $700. The minimum fixed fee generally charged for financial planning services on a fixed fee basis is $600.
Because Watchdog Planning does not manage assets, we do not utilize specific methods of analysis to select individual investments or securities. We recommend investment strategies.
Watchdog Planning uses the following investment strategies when providing investment advice:
Long term purchases. Investments held at least a year.
Short term purchases. Investments sold within a year.
We primarily follow a value-investing strategy that attempts to acquire at reasonable valuations publicly traded businesses that can deliver sustainable excess returns. We focus on a long-only strategy. Long term strategies are designed to identify and select investments to be held for multiple years. We will also invest in value oriented special situations with shorter expected holding periods.
Value Investing can be described as a strategy of selecting stocks that trade for less than their intrinsic values. Value investors typically seek stocks of companies that they believe the market has undervalued. They believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond with the company’s long-term fundamentals. The result is an opportunity for value investors to profit by buying when the price is deflated. Often, value investors select stocks with lower-than-average price-to-book or price-to-earnings ratios and/or high dividend yields. The risks associated with value-investing include incorrectly analyzing and overestimating the intrinsic value of a business, concentration risk, under performance relative to major benchmarks, macro-economic risks, investing in value traps i.e. businesses that remain perpetually undervalued, and lost purchasing power on cash holdings in the case of inflation.
Tactical asset allocation. Allows for a range of percentages in each asset class (such as Stocks = 40-50%). The ranges establish minimum and maximum acceptable percentages that permit the investor to take advantage of market conditions within these parameters. Thus, a minor form of market timing is possible, since the investor can move to the higher end of the range when stocks are expected to do better and to the lower end when the economic outlook is bleak.
Strategic asset allocation. Calls for setting target allocations and then periodically rebalancing the portfolio back to those targets as investment returns skew the original asset allocation percentages. The concept is akin to a “buy and hold” strategy, rather than an active trading approach. Of course, the strategic asset allocation targets may change over time as the client’s goals and needs change and as the time horizon for major events such as retirement and college funding grow shorter.
Primarily Recommend One Type of Security
We do not primarily recommend one type of security to clients. Instead, we recommend a product that may be suitable for each client relative to that client’s specific circumstances and needs.
Past performance is not indicative of future results. Therefore, you should never assume that future performance of any specific investment or investment strategy will be profitable. Investing in securities (including stocks, mutual funds, and bonds, etc.) involves risk of loss. Further, depending on the different types of investments there may be varying degrees of risk. You should be prepared to bear investment loss including loss of original principal.
Because of the inherent risk of loss associated with investing, our firm is unable to represent, guarantee, or even imply that our services and methods of analysis can or will predict future results, successfully identify market tops or bottoms, or insulate you from losses due to market corrections or declines. There are certain additional risks associated with investing in securities through our investment management program, as described below:
- Market Risk – Either the stock market as a whole, or the value of an individual company, goes down resulting in a decrease in the value of client investments. This is also referred to as systemic risk.
- Equity (stock) market risk – Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence in and perceptions of their issuers change. If you held common stock, or common stock equivalents, of any given issuer, you would generally be exposed to greater risk than if you held preferred stocks and debt obligations of the issuer.
- Company Risk. When investing in stock positions, there is always a certain level of company or industry specific risk that is inherent in each investment. This is also referred to as unsystematic risk and can be reduced through appropriate diversification. There is the risk that the company will perform poorly or have its value reduced based on factors specific to the company or its industry. For example, if a company’s employees go on strike or the company receives unfavorable media attention for its actions, the value of the company may be reduced.
- Fixed Income Risk. When investing in bonds, there is the risk that the issuer will default on the bond and be unable to make payments. Further, individuals who depend on set amounts of periodically paid income face the risk that inflation will erode their spending power. Fixed-income investors receive set, regular payments that face the same inflation risk.
- Options Risk. Options on securities may be subject to greater fluctuations in value than an investment in the underlying securities. Purchasing and writing put and call options are highly specialized activities and entail greater than ordinary investment risks.
- ETF and Mutual Fund Risk – When investing in an ETF or mutual fund, you will bear additional expenses based on your pro rata share of the ETF’s or mutual fund’s operating expenses, including the potential duplication of management fees. The risk of owning an ETF or mutual fund generally reflects the risks of owning the underlying securities the ETF or mutual fund holds. You will also incur brokerage costs when purchasing ETFs.
- Management Risk – Your investment with our firm varies with the success and failure of our investment strategies, research, analysis and determination of portfolio securities. If our investment strategies do not produce the expected returns, the value of the investment will decrease.
Item 9 is not applicable to this Disclosure Brochure because there are no legal or disciplinary events that are material to a client’s or prospective client’s evaluation of our business or integrity.
Watchdog Planning is not and does not have a related person that is a broker/dealer, municipal securities dealer, government securities dealer or broker, an investment company or other pooled investment vehicle (including a mutual fund, closed-end investment company, unit investment trust, private investment company or “hedge fund,” and offshore fund), another investment adviser or financial planner, a futures commission merchant, commodity pool operator, or commodity trading advisor, a banking or thrift institution, an accountant or accounting firm, a lawyer or law firm, an insurance company or agency, a pension consultant, a real estate broker or dealer, and a sponsor or syndicator of limited partnerships.
We are an independent registered investment adviser and only provide investment advisory services. We are not engaged in any other business activities and offer no other services except those described in this Disclosure Brochure. However, while we do not sell products or services other than investment advice, our representatives may sell other products or provide services outside of their role as investment adviser representatives with us.
An investment adviser is considered a fiduciary and has a fiduciary duty to all clients. Watchdog Planning has established a Code of Ethics to comply with the requirements of the securities laws and regulations that reflects its fiduciary obligations and those of its supervised persons. The Code of Ethics also requires compliance with federal securities laws. Watchdog Planning’s Code of Ethics covers all individuals that are classified as “supervised persons”. All employees, officers, directors and investment adviser representatives are classified as supervised persons. Watchdog Planning requires its supervised persons to consistently act in your best interest in all advisory activities. Watchdog Planning imposes certain requirements on its affiliates and supervised persons to ensure that they meet the firm’s fiduciary responsibilities to you. The standard of conduct required is higher than ordinarily required and encountered in commercial business.
This section is intended to provide a summary description of the Code of Ethics of Watchdog Planning. If you wish to review the Code of Ethics in its entirety, you should send us a written request and upon receipt of your request, we will promptly provide a copy of the Code of Ethics to you.
Watchdog Planning or associated persons of the firm may not buy or sell for their personal accounts, investment products identical to those recommended to clients. It is the express policy of Watchdog Planning that all persons associated in any manner with our firm must place clients’ interests ahead of their own when implementing personal investments. Watchdog Planning and its associated persons will not buy or sell securities for their personal account(s) where their decision is derived, in whole or in part, by information obtained as a result of employment or association with our firm unless the information is also available to the investing public upon reasonable inquiry.
We are now and will continue to be in compliance with applicable state and federal rules and regulations. To prevent conflicts of interest, we have developed written supervisory procedures that include personal investment and trading policies for our representatives, employees and their immediate family members (collectively, associated persons):
- Associated persons cannot prefer their own interests to that of the client.
- Associated persons cannot purchase or sell any security for their personal accounts prior to implementing transactions for client accounts.
- Associated persons cannot buy or sell securities for their personal accounts when those decisions are based on information obtained as a result of their employment, unless that information is also available to the investing public upon reasonable inquiry.
- Associated persons are prohibited from purchasing or selling securities of companies in which any client is deemed an “insider”.
- Associated persons are discouraged from conducting frequent personal trading.
- Associated persons are generally prohibited from serving as board members of publicly traded companies unless an exception has been granted to the Chief Compliance Officer of Watchdog Planning.
Any associated person not observing our policies is subject to sanctions up to and including termination.
The advisory services provided by Watchdog Planning do not include the selection or recommendation of broker-dealers to be used for implementation of client securities transactions or the execution of securities transactions. All recommendations and other broker-dealer decisions are made by unaffiliated, third-party investment advisory firms chosen by the client.
Our financial planning services do not include monitoring the investments of your account, and therefore, there is no ongoing review of your account(s) under such services.
Financial planning clients do not receive any report other than the written plan originally contracted for and provided by Watchdog Planning.
When you have questions about your account statement, you should contact the qualified custodian preparing the statement.
Watchdog Planning does not directly or indirectly compensate any person for client referrals.
The only compensation received from advisory services is the fees charged for providing investment advisory services as described in Item 5 of this Disclosure Brochure. Watchdog Planning receives no other forms of compensation in connection with providing investment advice.
Please see Item 5, Fees and Compensation, Item 10, Other Financial Industry Activities and Affiliations and Item 12, Brokerage Practices, for additional discussion concerning other compensation.
Custody, as it applies to investment advisors, has been defined by regulators as having access or control over client funds and/or securities. In other words, custody is not limited to physically holding client funds and securities. If an investment adviser has the ability to access or control client funds or securities, the investment adviser is deemed to have custody and must ensure proper procedures are implemented. According to this definition, Watchdog Planning does not have custody of client funds or securities.
Watchdog Planning does not have discretionary authority over any client accounts.
Watchdog Planning does not vote proxies on behalf of Clients. We have determined that taking on the responsibilities for voting client securities does not add enough value to the services provided to you to justify the additional compliance and regulatory costs associated with voting client securities. Therefore, it is your responsibility to vote all proxies for securities held in Account.
You will receive proxies directly from the qualified custodian or transfer agent; we will not provide you with the proxies. You are encouraged to read through the information provided with the proxy-voting documents and make a determination based on the information provided. Although we do not vote client proxies, if you have a question about a particular proxy feel free to contact us. However, you will have the ultimate responsibility for making all proxy-voting decisions.
This Item 18 is not applicable to this brochure. Watchdog Planning does not require or solicit prepayment of more than $500 in fees per client, six months or more in advance. Therefore, we are not required to include a balance sheet for the most recent fiscal year. We are not subject to a financial condition that is reasonably likely to impair our ability to meet contractual commitments to clients. Finally, Watchdog Planning has not been the subject of a bankruptcy petition at any time.
Nancy A. Nawn
Rowan University, Bachelor’s degree in Business and Finance: 1996St. Joseph’s University, Master’s degree in Finance: 2000
Watchdog Planning LLC, Chief Compliance Officer and Investment Adviser Representative, 10/2017 to Present;
Watchdog Planning LLC, Managing Member, 03/2017 to Present;
Unemployed/Disability, 12/2016 to 02/2017;
Mercer Global Advisors, Client Advisor, Regional Operations Manager, 04/2013 to 11/2016;
Unemployed/Disability, 12/2009 to 04/2013;
Mercer Global Advisors, Financial Advisor, 08/2006 to 12/2009.
As previously disclosed in Item 6, Watchdog Planning does not charge or accept performance-based fees.
Watchdog Planning or any of its associated persons have not been the subject of any client arbitrations or similar legal disputes.
No Arrangement with Issuer of Securities
Watchdog Planning and its management do not have any relationship or arrangement with any issuer of securities.
Watchdog Planning has a business continuity and contingency plan in place designed to respond to significant business disruptions. These disruptions can be both internal and external. Internal disruptions will impact our ability to communicate and do business, such as a fire in the office building. External disruptions will prevent the operation of the securities markets or the operations of a number of firms, such as earthquakes, wildfires, hurricanes, terrorist attack or other wide-scale, regional disruptions.
Our continuity and contingency plan has been developed to safeguard employees’ lives and firm property, to allow a method of making financial and operational assessments, to quickly recover and resume business operations, to protect books and records, and to allow clients to continue transacting business.
The plan includes the following:
- Alternate locations to conduct business;
- Hard and electronic back-ups of records;
- Alternative means of communications with employees, clients, critical business constituents and regulators; and
- Details on the firms’ employee succession plan
Our business continuity and contingency plan is reviewed and updated on a regular basis to ensure that the policies in place are sufficient and operational.
Commitment to Your Private Information: Watchdog Planners has a long-standing policy of protecting the confidentiality and security information we collect about our clients. We do not, and will not, share nonpublic personal information about you (“Information”) with outside third parties without your consent, except for the specific purposes described below. This notice has been provided to you to describe the Information we may gather and the situations under which we may need to share it.
Why We Collect and How We Use Information. We limit the collection and use of Information within our firm to only those individuals associated or employed with us that must have Information to provide financial services to you. Such services include maintaining your accounts, processing transaction requests, providing financial planning, financial consultation, and other services described in our Form ADV.
How We Gather Information. We get most Information directly from you when you provide us with information from any of the following sources:
- Applications or forms (for example: name, address, social security number, birth date, assets, income, financial history)
- Transactional activity in your account (for example: trading history and account balances)
- Information services and consumer reporting sources (for example: to verify your identity or to assess your credit history)
- Other sources with your consent (for example: your insurance professional, attorney, or accountant)
Sharing Information with Other Companies Permitted Under Law. We do not disclose Information obtained in the course of our practice except as required or permitted under law. Permitted disclosures include, for instance, providing information to unrelated third parties who need to know such Information in order to assist us with providing services to you. Unrelated third parties may include broker/dealers, mutual fund companies, insurance companies, and the custodian with which your assets are held. In such situations, we stress the confidential nature of information being shared.
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