Ridgewood Investments – Form CRS
Ridgewood Investments LLC is registered with the Securities and Exchange Commission as an investment adviser and, as such, we provide advisory services rather than brokerage services. Brokerage and investment advisory services and fees differ and it is important for you, our client, to understand the differences. Additionally, free and simple tools are available to research firms and financial professionals at Investor.gov/CRS, which also provides educational materials about broker-dealers, investment advisers, and investing. This document is a summary of the services and fees we offer to “retail” investors, which are natural persons who seek or receive services primarily for personal, family, or household purposes. What investment services and advice can you provide me? We offer the following investment advisory services to retail investors: Financial Planning Services; Portfolio Management Services; Pension Consulting Services; and Selection of Other Advisers. Detailed information regarding our services, fees, and other disclosures can be found in our Form ADV Part 2A Items 4, 7, and 8 Brochure to include the full URL at https://adviserinfo.sec.gov/firm/brochure/121220.
Account Monitoring: If you open an investment account with our firm, as part of our standard service we will monitor your investments on an ongoing basis with regular account reviews conducted at least quarterly.
Investment Authority: We manage investment accounts on a discretionary basis whereby we will decide which investments to buy or sell for your account. We have the discretion to select, retain or replace third-party managers to manage your accounts. You may limit our discretionary authority (for example, limiting the types of securities that can be purchased or sold for your account) by providing our firm with your restrictions and guidelines in writing. For our non-discretionary investment management services, we will provide advice, but you will ultimately decide which investments to buy and sell for your account. You have an unrestricted right to decline to implement any advice provided by our firm on a non-discretionary basis.
Investment Offerings: We provide advice on various types of investments. Our services are not limited to a specific type of investment or product. Account Minimums and Requirements: In general, we require a minimum account size of $500,000 to open and maintain an advisory relationship, which may be waived at our discretion.
Key Questions to Ask Your Financial Professional
- Given my financial situation, should I choose an investment advisory service? Why or Why Not?
- How will you choose investments to recommend to me?
- What is your relevant experience, including your licenses, education, and other qualifications?
- What do these qualifications mean?
What fees will I pay? The following summarizes the principal fees and costs associated with engaging our firm for investment advisory services. For detailed information, refer to our Form ADV Part 2A, Items 5 and 6 Brochure to include the full URL at https://adviserinfo.sec.gov/firm/brochure/121220
- Asset Based Fees – Payable Quarterly in Arrears. Since the fees we receive are asset-based (i.e. based on the value of your account), we have an incentive to increase your account value which may create a conflict of interest, especially for accounts holding illiquid or hard-to-value assets.
- Hourly Fees – Hourly rates will range from a low of $450 per hour to a high of $1,000 per hour and are payable in advance or arrears depending on the arrangement and the scope of work to be performed.
- Fixed Fees – Fixed fees are customized to the scope of the project to be performed and are payable in advance or arrears depending on the arrangement and the scope of work to be performed.
- Performance-based Fees– Payable Quarterly in Arrears. Performance-based fees may create an incentive for our firm to make investments that could be riskier or more speculative than would be the case absent a performance fee arrangement or to favor recommending our performance-based investment options. Since we manage accounts that charge performance-based fees and accounts that are charged other types of fees, we could have a conflict of interest when recommending performance-based investment options.
Examples of the most common other fees and costs applicable to our clients are:
- Custodian fees; account maintenance fees; such as third-party management fees related to mutual funds and exchange-traded funds;
- Transaction charges when purchasing or selling securities; and other product-level fees associated with your investments.
You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying.
Key Questions to Ask Your Financial Professional
- Help me understand how these fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?
What are your legal obligations to me when acting as my investment adviser? How else does your firm make money and what conflicts of interest do you have? When we act as your investment adviser, we have to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the investment advice we provide you. Here are some examples to help you understand what this means.
- Private Fund Affiliation: We serve as the general partner or are affiliated with one or more private funds (private pooled investment vehicles) in which you may be solicited to invest. Our Company, its affiliates, certain members of its management, and other knowledgeable employees may acquire, directly or indirectly, investment interests in our fund or have other financial interests (e.g. Partners, Officers, Board Members, Advisors, Consultants, Investors, etc.) in the funds and/or one or more of the funds investments. This could present a potential conflict of interest by virtue of these other interests and investments. You should carefully review any fund disclosures and risk factors in view of potential conflicts of interest before deciding whether or not to proceed or not proceed with any private fund investment for which we solicit you to invest.
- Proprietary Trading: We recommend investments that are issued, sponsored, managed, or co-owned by our firm or our one of more of our affiliates. This may present a conflict of interest because we have a financial incentive to recommend such proprietary investments.
Refer to our Form ADV Part 2A Brochure to include the full URL at https://adviserinfo.sec.gov/firm/brochure/121220 to help you understand what conflicts exist.
Key Questions to Ask Your Financial Professional
- How might your conflicts of interest affect me, and how will you address them?
How do your financial professionals make money? The financial professionals servicing your account(s) are compensated with salary and bonus. Financial professionals’ compensation is based on the amount of client assets they service and/or the revenue the firm earns from the person’s services or recommendations.
- The bonus compensation paid to our financial professionals may involve a conflict of interest because they have a financial incentive to refer clients to our firm.
- Because our revenue is derived from asset-based fees, we have an incentive to grow your account as much as possible. This may cause us to take overly aggressive positions in conflict with your interests in an attempt to grow your account, or could incentivize us to inflate the valuations of illiquid investments held in your account.
Do you or your financial professionals have a legal or disciplinary history? No, our firm and our financial professionals currently do not have any legal or disciplinary history to disclose. Visit Investor.gov/CRS for a free and simple research tool.
Key Questions to Ask Your Financial Professional
- As a financial professional, do you have any disciplinary history? For what type of conduct?
You can find additional information about your investment advisory services and request a copy of the relationship summary at 973-544-6970 or refer to Form ADV Part 2A Brochure to include the full URL at https://adviserinfo.sec.gov/firm/brochure/121220.
Key Questions to Ask Your Financial Professional
- Who is my primary contact person?
- Is he or she a representative of an investment adviser or a broker-dealer?
- Who can I talk to if I have concerns about how this person is treating me?