Firm Brochure

PART 2A OF FORM ADV

RON DENK INVESTMENT ADVISORY, LTD

DBA DENK STRATEGIC WEALTH PARTNERS

10000 N 31st AVE, SUITE C262

PHOENIX, AZ 85051

602-252-8700

FAX 602-252-8701

March 20, 2017

This Brochure provides information about the qualifications and business practices of Ron Denk Investment Advisory Services, Ltd. (dba Denk Strategic Wealth Partners). If you have any questions about the contents of this brochure please contact us at 602-252-8700, toll free at 1-877-THE-DENK and/or ron@denkinvest.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.

Denk Strategic Wealth Partners is a registered investment advisor. Registration of an Investment Advisor does not imply any level of skill or training. The oral and written communications of an Advisor provide you with information about which you determine to hire or retain an Advisor. Additional information about specific Advisors is also available on the SEC’s website at www.adviserinfo.sec.gov.

Item 2 – Material Changes

On July 28, 2010, the United State Securities and Exchange Commission published “Amendments to Form ADV” which amends the disclosure document that we provide to clients as required by SEC Rules. This brochure dated March 20, 2017, is a new document prepared according to the SEC’s new requirements and rules. As such this Document is materially different in structure and requires certain new information that our previous brochure did not require.

In the future, this Item will discuss only specific material changes that are made to the brochure and provide clients with a summary of such changes. We will also reference the date of our last annual update of our brochure.

In the past, we have offered or delivered information about our qualifications and business practices to clients on at least an annual basis. Pursuant to new SEC Rules we will ensure that you receive a summary of any material changes to this and subsequent brochures within 120 days of the close of our business’ fiscal year. We may further provide other ongoing disclosure information about material changes as necessary. We will further provide you with a new brochure as necessary based on changes or new information at any time without charge.

Currently our brochure may be requested by contacting Linda Walrad, Operations Assistant, at toll free 1-877-THE-DENK or by email at LindaW@denkinvest.com. Our brochure is also available free of charge on our website at www.denkinvest.com. Additional information about DSWP is also available via the SEC’s website www.adviserinfo.sec.gov. The SEC’s website also provides information about any persons affiliated with DSWP who are registered or are required to be registered as investment advisor representatives of DSWP.

Form ADV Part 2 requires registered investment advisors to amend their brochure when information becomes materially inaccurate. If there are any material changes to an advisor’s disclosure brochure, the advisor is required to notify you and provide you with a description of the material changes.

Since our firm’s last annual updating amendment, we have not made material changes to this disclosure brochure.

Item 3–Table of Contents 

Item 1 – Cover Page i
Item 2 – Material Changes ii
Item 3 – Table of Contents iii
Item 4 – Advisory Business 4
Item 5 – Fees and Compensation 5
Item 6 – Performance-Based Fees and Side-By-Side Management 7
Item 7 – Types of Clients 7
Item 8 – Methods of Analysis, Investment Strategies and Risk Loss 8
Item 9 – Disciplinary Information 10
Item 10 – Other Financial Industry Activities and Affiliations 10
Item 11 – Code of Ethics 11
Item 12 – Brokerage Practices 12
Item 13 – Review of Accounts 15
Item 14 – Client Referrals and Other Compensation 15
Item 15 – Custody 15
Item 16– Investment Discretion 15
Item 17 – Voting Client Securities 16
Item 18 – Financial Information 16
Item 18B – Financial Planning Conflict of Interest 16
Item 19 – Requirements for State-Registered Advisers 17

 

Item 4 – ADVISORY BUSINESS

Ron Denk Investment Advisory Services, Ltd. (dba Denk Strategic Wealth Partners) is an Arizona corporation (referred to herein as DSWP) founded in 1991 by principal owners Ronald P. Denk and Patricia L. Denk to provide specialized investment management and consulting services to individuals, trusts, estates, corporations and other business entities as well as pensions and profit sharing plans. As active asset managers, our methods are based on the concepts originally used by Charles Dow to measure supply and demand for assets. We also use Relative Strength to measure which assets are “stronger” than other assets and work to include stronger assets and reduce or eliminate “weaker” assets from client’s holdings. DSWP provides advice related to stocks, bonds, ETF’s mutual funds and options. Our system positions assets into these groups: cash, fixed income, US stocks, international stocks, commodities (held through mutual funds and ETFs) and currencies (held through mutual funds and ETFs).

In addition to managing various types of securities for clients (such as common and preferred stocks, ETFs, mutual funds, warrants, rights, bonds, municipal securities, options on securities, and government bonds) a portion of the securities may be held in cash or cash equivalents including money market mutual funds.

There are occasions when DSWP will provide advice on matters not involving securities. This advice covers, but is not restricted to, the following areas: insurance, debt position, refinancing loans, goal setting, tax issues and employer benefits. No fee is charged to existing clients for these services. Compensation, if any, may be earned as a result of client purchasing products not involving securities on advice from DSWP as insurance agents or broker-dealer agents. Larger, more detailed plans are available for a fee.

In no event, will DSWP provide tax or legal advice. Clients should contact their tax or legal professionals for such advice.

DSWP provides advice to clients and some of the persons associated with DSWP are also registered as securities representatives with Lincoln Financial Securities Corporation, a FINRA securities broker-dealer (“LFS”). DSWP also maintains a relationship with various life and health insurance companies. A description of our advisory services follows:

INVESTMENT MANAGEMENT SERVICES PROVIDED

DSWP provides investment management services to clients wishing to have their investments managed continuously on a discretionary basis. We will also provide account management on a non-discretionary basis.

Investment management services begin by assisting each new client in determining the client’s investment objectives. All clients have a “risk preference” or an amount of volatility with which they are comfortable. We use an initial risk assessment questionnaire to assess the initial percentages of equities and fixed income. These percentages are updated as the economy changes and as we get to know the clients better. DSWP then manages each client’s investments in a manner consistent with the client’s objectives and risk tolerance. We also assist the client in establishing a securities account at a brokerage firm which maintains custody of client securities either directly or with the assistance of its transaction clearing firm. DSWP generally recommends that each client establish a brokerage account with TD Ameritrade, and most clients do so.

Each client is requested to set any restrictions on their holdings. For example, some clients prefer to hold “environmentally friendly” companies in their stock holdings, and others wish to avoid “sin” companies. Their portfolios are managed to include areas they wish to emphasize and exclude areas they wish to ignore. Legacy positions are allowed. In other words, sometimes people prefer to hold a particular stock because it holds sentimental value. We can work those holdings into our allocations.

DSWP does not participate in wrap fee programs.

The methods for computing “assets under management” and “client assets you manage” are the same. The amount of clients’ assets managed, as of March 17, 2017, totaled $37,982,692 of which $1,048,957 is managed on a non-discretionary basis. The remaining amount is managed with discretion.

Item 5 – FEES AND COMPENSATION

Fees charged by DSWP for its Investment Management Services are negotiable and are based upon the value of assets being managed.

Although all fees may be negotiated, fees generally conform to the following fee schedule:

Method of fee calculation:
Your Assets under Management Maximum Annual Fees
$249,999 or less 1.75{e86644c38f4128c2323a12cf6de2f906259a13873d497f746d33f196f216535e}
$250,000 to $749,999 1.50{e86644c38f4128c2323a12cf6de2f906259a13873d497f746d33f196f216535e}
$750,000 to $1,499,999 1.25{e86644c38f4128c2323a12cf6de2f906259a13873d497f746d33f196f216535e}
$1,500,000 to $4,999,999 1.00{e86644c38f4128c2323a12cf6de2f906259a13873d497f746d33f196f216535e}
$5,000,000 to $9,999,999 0.55{e86644c38f4128c2323a12cf6de2f906259a13873d497f746d33f196f216535e}
$10,000,000 + 0.50{e86644c38f4128c2323a12cf6de2f906259a13873d497f746d33f196f216535e}
$1,000 Minimum annual Fee

The above chart of investment fees charged to clients of DSWP are reasonable in light of the extensive investment advisory experience of the principals of DSWP and the typical depth of study required to manage the accounts appropriately in a continually changing economic climate. While these fees are similar to the fees charged in the investment advisory industry today, it is possible that lower fees for comparable services may be available from other sources.

Fees are billed quarterly in advance and are customarily deducted directly from the assets under management. Upon termination of DSWP’s representation of a client, which requires thirty (30) days advance written notice from one party to the other, fees are prorated to the date of termination. The fees shown above are for Investment Management Services only. Fees do not cover any transaction, custodial or other service costs.

FINANCIAL PLANNING SERVICES

We provide financial planning and consulting services that are tailored to the client’s individual needs, which may be broad-based in nature or may only focus on certain areas. Investment Advisor Representatives may provide advice on general issues relating to such topics as financial management, risk management, asset allocation, estate planning, retirement planning, educational funding, or other needs identified by the client.  The financial planning process will involve a review of the client’s current financial condition, investment objectives, risk tolerance, and other relevant financial suitability information.

Financial planning recommendations are based on your financial situation at the time we present our recommendations and/or plan to you, and on the financial information you provide to us. You must promptly notify our firm if your financial situation, goals, objectives, or needs change. You are under no obligation to act on our financial planning recommendations. Should you choose to act on any of our recommendations you are not obligated to implement our financial planning recommendations through any of our other investment advisory services and you may place securities transactions with any brokerage firm.

DSWP may charge a start-up fee ranging from $50 to $250 which is negotiable and payable at the end of the initial consultation.

After the initial analysis of the client’s investment situation is completed and initial advice is provided to a client, DSWP makes available ongoing consulting services. These services are on an hourly or flat fee basis which is designed to continue the advisory relationship to implement, update and modify the initial advice provided.

The hourly fee for investment consulting services varies from $125 to $250 per hour depending on the following factors: the nature and scope of the advice requested by the client, nature and number of investments in a client’s portfolio, amount and nature of research required to complete the project, the scope and number of reports requested by a client, and the experience of DSWP and/or our staff used to provide services. Prior to engagement each client signs an agreement which provides an estimate of the total fee for services.

The agreement between DSWP and a client for consulting services may be terminated by either party at any time by providing thirty (30) days advance written notice to the other. Any fee due, but not yet paid by a client, is due promptly after termination of the agreement. All unearned prepaid fees are returned to the client by DSWP only when the client has given thirty (30) days advance written notice. Without a thirty (30) day advance written notice the client will forfeit one (1) months fees.

DSWP typically recommends that clients utilize the execution services of TD Ameritrade which we believe charges competitive transaction fees. Although DSWP believes its advisory fees and the transaction execution fees of TD Amertitrade are competitive, clients may be able to obtain similar services at higher or lower costs if acquired elsewhere.

Clients may incur certain charges imposed by the custodian, third party investment and other third parties such as fees charged by managers, odd-lot differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions. Mutual funds and exchange traded funds also charge internal management fees which are disclosed in a fund’s prospectus. Such charges, fees and commissions are exclusive of and in addition to our fees. DSWP shall not receive any portion of these commissions, fees and costs.

Item 12 further describes the factors that DSWP considers in selecting or recommending broker-dealers for client transactions and determining the reasonableness of their compensation.

Item 6 – PERFORMANCE BASED FEES and SIDE BY SIDE MANAGEMENT

DSWP does not charge any performance-based fees; that is, fees based on a share of capital gains or capital appreciation of the assets of a client.

 Item 7 – TYPES OF CLIENTS

New accounts require a minimum of $250,000 of investable assets, although DSWP will consider entering into an agreement to manage accounts of lesser value depending on individual circumstances.

Item 8 – METHODS of ANALYSIS, INVESTMENT STRATEGIES, and RISK of LOSS

METHODS OF ANALYSIS

Our securities analysis methods include charting, fundamental, technical and cyclical analysis. We evaluate client’s investments to determine whether they are in harmony with the client’s financial objectives. We design portfolios to help clients maintain their financial goals. We may also use Monte Carlo modeling. The main sources of information we use includes financial newspapers and magazines, research materials prepared by others, corporate rating services, timing services, annual reports, prospectuses, filings with the SEC, company press releases and internet research. We subscribe to the DorseyWright Point and Figure software which tracks the majority of all traded stocks (domestic and international), exchange traded funds and mutual funds on a daily basis.

More specifically we use a system that was originally developed by Charles Dow in the late 1800s. He developed a system of charting the price of stocks on a daily basis and then tracking the future gains and losses of those stocks. A modern-day version of this same system is known as ‘Point and Figure’ analysis and even today this system (using computers) follows the price action of securities including stocks and other types of securities. We use this point and figure system to track equities and the trends of various investments because:

Formations, patterns and signals are easy to recognize and interpret and tend to repeat themselves.

  • Trends are readily identified and trend lines can be drawn with amazing ease.
  • Valid targets can be established based on past experience.
  • It is one of the easiest kinds of charts to maintain and therefore allows us to follow more stocks.
  • It generally enables an investor to hold onto a winner while it is winning and get off a loser quickly.
  • The method is dynamic because it changes along with the economy.

In addition to charting the individual equities against their prior history we also use charts of ‘Relative Strength’ which are developed by dividing the price of an equity by its relevant index and then multiplying by 1000 to eliminate decimals. These ‘relative strength’ charts can then be tracked with point and figure charts (PNF) the same way that we use PNF charts to track individual securities. This allows us to see whether an individual holding is stronger or weaker than its representative index and rationally decide whether to consider investing in the index or the narrower holding. Although this is somewhat simplified, the combination of the PNF charts and relative strength charts make up the basic building blocks with which we determine investor portfolios and holdings.

We compare multiple investments at the same time and use their relative strength numbers to determine the stronger vs. weaker investments and then work to include stronger areas and avoid weaker ones.

INVESTMENT STRATEGIES

The Investment strategies used to implement any investment advice given to clients include long term purchases, short term purchases, trading and margin transactions. By its nature financial planning looks to the long-term. After evaluating the client’s short-term cash needs and emergency fund, investment and insurance strategies are designed to help the client achieve their financial goals.

RISK OF LOSS

While use of our system of PNF charts and relative strength holdings aids us in selecting stronger holdings for our clients DSWP does not guarantee the results of its recommendations and losses can occur from receiving our services. Even relative strength investing (which we feel gives us the best chance of holding profitable securities) cannot guarantee a positive return in all markets.

LENGTH OF HOLDING PERIODS

We find that historically equities tend to hold their strength for periods of between six months and two years although this does not always happen. The result of holding equities for longer periods of time tends to be somewhat tax-efficient. In very volatile time periods, however, equities tend to move in and out of stronger periods and this creates a more active management style which can increase trading costs and decrease the total returns the clients can receive. Because we change our holdings based on the changing relative strengths of the investments this system is quite different from the typical concept of ‘buying and holding’ investments. Whereas investors and advisors who tend to buy and then keep investments for a very long time must experience severe negative swings during market corrections our system of holding only the stronger investments may allow us to avoid some of the drawdowns experienced by the more traditional ‘buy and hold’ systems.

SPECIFIC TYPES OF SECURITIES

The investment industry has developed a great number of ‘Exchange Traded Funds’ (ETFs) over the past several years. An exchange traded fund is a type of index which allows more diversification than an individual stock. We prefer to hold exchange traded funds as they allow more flexibility in trading than the broader mutual funds and also permit more diversification than single stocks, thus reducing the single stock risk. Investing in ETFs involves certain risks including, in all or some cases, leverage, liquidity, concentration, non-diversification, foreign investment, foreign currency, high yield, interest rate, credit, market, correlation, aggressive investment techniques and repurchase agreement risks. Moreover, there is no guarantee that any specific ETF will achieve its investment objective. These risks can increase volatility and decrease performance. All ETFs permit active investment strategies which can decrease performance and increase expenses. All ETFs are subject to active investor risk. There are no restrictions on the size and frequency of trades. The frequent exchanges ETFs permit can decrease performance, increase expenses and incur tax consequences.

 Item 9 – DISCIPLINARY INFORMATION

(No disclosures are required here.)

Item 10 – OTHER FINANCIAL INDUSTRY ACTIVITIES and AFFILIATIONS

DSWP suggests brokers to clients but does not exercise discretion to secure any broker. DSWP participates in the TD Ameritrade Institutional Services program, a division of TD AMERITRADE, Inc. TD Ameritrade is an unaffiliated FINRA broker-dealer. TD Ameritrade offers independent investment advisors services which include custody of securities, trade execution, clearance and settlement of transactions.

DSWP receives some benefits such as research information and use of the website from TD Ameritrade through it’s participation in the program. These benefits are offered to every Investment Advisor and DSWP is not getting any special or preferential treatment.

Although DSWP is available to provide Investment Management Services, employees may also be Registered Representatives of LFS (Lincoln Financial Securities Corporation) and registered as insurance agents. Operating a branch office for LFS provides us opportunities to provide additional services and financial products to our clients. For example, on occasion we may sell a mutual fund or a stock to people who just want to buy a security and hold it, typically a particular stock or bond. When that occurs, we receive an upfront commission. These individual client-requested purchases may result in us collecting upfront commissions ranging in amounts from zero to several thousand dollars per year. Mutual funds and some annuity products will also provide compensation in the form of ‘trailing fees’. Because we have been fortunate to serve many clients going back nearly two decades the mutual fund part of our advisory firm is significant. Accordingly, altogether our trailing fee income may be in the range of several thousand dollars per month.  The commissions we earn on this type of income may be as small as one eighth of one percent (per year) or, in some cases, as much as one percent.  The majority of our time, however, is spent on Client Relations and related Investment Management Services. The balance of our time is spent on processing and supervising securities transactions, offering and selling insurance products, including fixed annuities, life insurance and long-term care policies.

Because DSWP offers investment advice and employees may also be registered representatives for LFS we have conflicts of interest when we (1) recommend LFS’s brokerage services and (2) recommend on a non-discretionary basis the number, kind and amount of securities trades to process through LFS because such determinations influence the amount of revenue earned by representatives of DSWP.

At times the investment interests of DSWP and other employees of DSWP correspond with a client’s interest. We may invest in or want to sell the same securities that are recommended to clients. While this may represent a potential conflict of interest we will give priority to client trades and be “last in” and “last out” for the trading day.

DSWP may conduct a variety of seminars in various settings such as credit unions, business organizations and non-profits. For the seminars, basic financial information will be offered to the public. Topics are designed to increase conceptual under-standing of personal financial issues but in no event, will DSWP provide legal or tax advice.

Business and Other Organization Seminars: A fee may or may not be charged to the business or organization. If a fee is charged to the business or organization, it is negotiable and paid following completion of the seminar. A fee of typically $25 to $75 per family unit may or may not be charged to the seminar attendees. If a fee is charged to seminar attendees, it is set on a seminar-to-seminar basis payable in advance and refunded if the registrant cancels no fewer than five (5) business days before the beginning of the seminar.

DSWP Sponsored Seminars: Seminars offered and sponsored by DSWP will be held in-house or at another facility. These seminars may cover a variety of financial topics.

No fee will be charged for these sponsored seminars.

Item 11 – CODE OF ETHICS

Description of Our Code of Ethics

We strive to comply with applicable laws and regulations governing our practices. Therefore, our Code of Ethics includes guidelines for professional standards of conduct for persons associated with our firm. Our goal is to protect your interests at all times and to demonstrate our commitment to our fiduciary duties of honesty, good faith, and fair dealing with you. All persons associated with our firm are expected to adhere strictly to these guidelines. Persons associated with our firm are also required to report any violations of our Code of Ethics. Additionally, we maintain and enforce written policies reasonably designed to prevent the misuse or dissemination of material, non-public information about you or your account holdings by persons associated with our firm.

Clients or prospective clients may obtain a copy of our Code of Ethics by contacting us at the telephone number on the cover page of this brochure.

Participation or Interest in Client Transactions

 Neither our firm nor any persons associated with our firm has any material financial interest in client transactions.

Personal Trading Practices

Our firm or persons associated with our firm may buy or sell the same securities that we recommend to you or securities in which you are already invested. A conflict of interest exists in such cases because we may have the ability to trade ahead of you and potentially receive more favorable prices than you will receive. In efforts to mitigate this conflict of interest, it is our policy that neither our firm nor persons associated with our firm shall have priority over your account in the purchase or sale of securities.  As a fiduciary, it is our firm’s obligation to act in our client’s best interest.

Item 12 – BROKERAGE PRACTICES

DSWP uses TD Ameritrade as our custodian which provides client account executions (trades). Among the three largest custodians we believe that currently we receive the best executions from this custodian. We regularly compare against the other two large custodians (Schwab and Fidelity) and would need to consider recommending a change if execution or overall costs change. TD Ameritrade furnishes us a website to track client accounts and access on their website to general research. The other custodians also provide this information therefore we don’t feel this is an inducement to use this custodian.

TD Ameritrade also provides advisors with access to their Research webpages which gives information on markets generally, as well as specific research on individual mutual funds, bonds, and ETF’s. This data is provided without charge to all advisors who use Ameritrade to custody their accounts.

Block Trades

We may combine multiple orders for shares of the same securities purchased for advisory accounts we manage (this practice is commonly referred to as “block trading”). We will then distribute a portion of the shares to participating accounts in a fair and equitable manner. The distribution of the shares purchased is typically proportionate to the size of the account, but it is not based on account performance or the amount or structure of management fees. Subject to our discretion regarding factual and market conditions, when we combine orders, each participating account pays an average price per share for all transactions and pays a proportionate share of all transaction costs.

Where we block trade accounts, we do so only for discretionary accounts. We do not combine orders for non-discretionary accounts. Accordingly, non-discretionary accounts may pay different costs than discretionary accounts pay. If you enter into non-discretionary arrangements with our firm, we may not be able to buy and sell the same quantities of securities for you and you may pay higher commissions, fees, and/or transaction costs than clients who enter into discretionary arrangements with our firm.

 Trade Errors

In the event a trading error occurs in your account; our policy is to restore your account to the position it should have been in had the trading error not occurred. Depending on the circumstances, corrective actions may include canceling the trade, adjusting an allocation, and/or reimbursing the account.

Additional Information Regarding Trade Error Corrections  

 This section is intended to educate employees and clients in our policy regarding correcting trade errors and to provide guidelines to follow when a trade error occurs.

A.  Definition of a Trade Error

Although no formal definition exists, trading errors generally include the following situations:

  • Buying or selling the wrong security;
  • Failing to buy or sell securities as intended;
  • Buying, selling or allocating the incorrect number of shares;
  • Buying or selling a security in the wrong account;
  • Delays in trading within a client’s account as a result of DSWP actions (or inactions);
  • Allocating securities to the wrong account;
  • Buying or selling securities not authorized by the investment management agreement or account investment objectives; and
  • Failing to follow specific client instructions to purchase, sell or hold securities.

Trade errors do not include administrative errors that are generally immediately correctable through communications with the broker (such as a clerical error made by the broker in allocating shares of a block trade).  In no instance, will such administrative errors result in a financial loss to a client.

All trade errors should be corrected within a reasonable period of time following discovery of the error.  We will not use commissions from other client accounts to correct trade errors.

  1. DSWP Policy Regarding Gains and Losses incurred as a Result of Trade Errors

It is the intent of DSWP to move any positive gains from errors that occur into error accounts.

As we have done in the past with an ‘error account’, gains and losses will be treated in the following manner:

DSWP holds and operates a sundry account which is also used as an ‘error account’. If we (DSWP) make an error that creates a positive gain, this gain will be moved to the sundry account. If we make an error that creates a loss for a client, the client will be reimbursed with a charge against the positive balance in the same sundry account. If, for any reason, DSWP should elect to cease operation we will, at that time, transfer any existing positive balance to one or more of our favored charities. At no time, will any employee of DSWP personally benefit from a gain in the error account.

  1. Oversight and Documentation of Trade Errors
  • The CEO is responsible for documenting the trade error, including a description of the error, financial impact (if any), the client(s) involved and the resolution.
  • The CEO is responsible for overseeing the appropriate resolution of the trade error, which includes analyzing how the error occurred and whether a pattern exists which needs to be addressed.
  • Payments made to clients as a result of trade error correction are to be recorded in the firm’s accounting records.

Item 13 – REVIEWS OF ACCOUNTS

DSWP has two Representatives who review client accounts. Each is in contact with his or her clients no less frequently than semi-annually (contact triggering factors are described below). Ronald Denk is responsible for approximately 108 accounts and Anton Denk is responsible for approximately 46 accounts.

The factors that trigger client contact are as follows: (1) Clients are contacted no less frequently than semi-annually; (2) clients are contacted at such time as the client’s personal, financial or business status changes so as to indicate or necessitate a review, or upon special request of the client; and (3) Clients are contacted at times of unusual market conditions as determined by DSWP.

DSWP issues quarterly reports for clients with managed assets. Clients who receive consulting services receive reports within the scope and as frequently as DSWP and the client agree.

 Item 14 – CLIENT REFERRALS and OTHER COMPENSATION

DSWP does not compensate firms and individuals who refer clients.

Item 15 – CUSTODY

DSWP does not have physical custody of client funds.

Item 16 – INVESTMENT DISCRETION

DSWP usually receives discretionary authority from the client at the outset of an advisory relationship to determine which securities and in what amount are to be bought or sold. In all cases, however, such discretion is to be exercised in a manner consistent with the stated investment objectives for the particular client account.

When selecting securities, and determining amounts DSWP observes the investment policies, limitations and restrictions of the clients for which it advises. Investment guidelines and restrictions must be provided to us in writing. When discretion is exercised DSWP is granted authority from a client to select the securities to buy and sell the amount of securities to buy and sell and when to buy and sell them. Therefore, DSWP will place orders for client accounts without contacting the client on a trade-by-trade basis for permission. DSWP will also exercise discretion to liquidate securities in amounts sufficient to cover its fees.

When exercising discretion DSWP may combine orders for more than one client’s account to from a “block” order for the purpose of obtaining a better price and execution. When a block order is executed the broker-dealer executing the order typically allocates an average execution price to each customer’s position within the block on a pro rata basis. DSWP does not have authority to withdraw funds or take custody of client funds or securities except for payment of advisory fees due DSWP.

If you enter into non-discretionary arrangements with our firm, we will obtain your approval prior to the execution of any transactions for your account(s). You have an unrestricted right to decline to implement any advice provided by our firm on a non-discretionary basis.

Item 17 – VOTING CLIENT SECURITIES

Without exception DSWP does not vote proxies on behalf of clients. All proxy materials received on behalf of a client account are sent directly to our client or a designated representative of the client who is responsible for voting the proxy. DSWP personnel may answer client questions regarding proxy voting matters in an effort to assist the client in determining how to vote the proxy. However, the final decision of how to vote the proxy rests with the client.

Item 18 – FINANCIAL INFORMATION

Registered investment advisors are required to provide you with certain financial information or disclosures about their financial condition. DSWP has no financial commitment that impairs its ability to meet contractual and fiduciary commitments to clients and has never been the subject of a bankruptcy proceeding.

 Item 18A – FINANCIAL PLANNING CONFLICT OF INTEREST DISCLOSURE

Because DSWP performs financial plans as well as manages client investment accounts, the Investment Advisory Representatives of DSWP have a conflict of interest in that the financial plans may suggest the use of managed investment accounts. In that situation, the Investment Advisory Representatives could potentially be compensated for both the financial plan and the management of the investment account. A client who has contracted the preparation of a financial plan from DSWP is under no obligation to utilize DWSP as a manager of his/her investment accounts or effect any investment transactions through DSWP.   Note that although we occasionally create full financial plans, our primary business is portfolio management.  In addition, DWSP wishes to disclose that its employees will not under any circumstances participate in any client transactions.

Our firm does not have any financial condition or impairment that would prevent us from meeting our contractual commitments to you. We (i) do not take physical custody of client funds or securities; (ii) do not serve as trustee or signatory for client accounts; (iii) do not require the prepayment of more than $500 in fees six or more months in advance; and (iv) have not filed a bankruptcy petition at any time in the past ten years. Therefore, we are not required to include a financial statement with this brochure.

Item 19 – REQUIREMENTS FOR STATE-REGISTERED ADVISERS 

  1. Our executive/management persons include Ronald P. Denk and Anton W. Denk 

Ronald P. Denk’s educational background:

BA, Lawrence University, 1967 – 1971 History Major

University of Wisconsin, 1971 -1972 Classes from the Masters Program in Business

CFP Certification, December 1989

Ronald Denk has been in the financial services industry since 1971 when he received his first life and health insurance license in Wisconsin. His background includes the following:

1991 – Present, President Denk Investment Advisory Services, LTD. Note also dba filed as Denk Strategic Wealth Partners, March, 2004.

1973 – Present, Licensed Securities Representative

1972 – Present, Licensed Insurance Agent

Anton W. Denk’s educational background:

University of Wisconsin, 1985- 1986

CFP Certification, 1999

ChFC Designation, American College, Bryn Mawr, PA, 2003

Anton Denk has been in the financial services industry since 1993. His background includes the following:

September 2004 – Present, Investment Advisor Representative, Denk Strategic Wealth Partners, providing investment and advisory services.

  1. Additional business activities.

Each of the Denk’s is president of a corporation which manages the investment activities of his clients. Also, each is a registered representative of Lincoln Financial Services of One Granite Place, Concord, NH 03301. The time spent as a registered representative is less than five hours per week for each.

  1. No one in Denk Strategic Wealth Partners is compensated with performance-based fees.

D.1.  No one in Denk Strategic Wealth Partners has been found liable in an arbitration claim alleging damages in excess of $2,500.

D.2.  No one in Denk Strategic Wealth Partners has been found liable in a civil, self-regulatory organization or administrative proceeding involving any financial-related business or activity or has been found liable in any unethical practices.

  1. No one at Denk Strategic Wealth Partners has any relationship or arrangement with any issuer of securities that is not listed in this document.

Please refer to the Part(s) 2B for background information about management personnel and those giving advice on behalf of our firm.

Our firm is not actively engaged in any business other than giving investment advice.

Neither our firm, nor any persons associated with our firm are compensated for advisory services with performance-based fees. Please refer to the “Performance-Based Fees and Side-By-Side Management” section above for additional information on this topic.

Neither our firm, nor any of our management persons have any reportable arbitration claims, civil, self-regulatory organization proceedings or administrative proceedings.

Neither our firm, nor any of our management persons have a material relationship or arrangement with any issuer of securities.

For additional information regarding our privacy policy, please contact

Denk Strategic Wealth Partners

10000 N 31st Ave., Suite C262

Phoenix, AZ 85051

(602) 252-8700