June 2020
Horan Securities, Inc. (referred to as “HSI” or “we”, “our”, “us”) is registered with the U. S . Securities and Exchange Commission (“SEC”) as an Investment Adviser and Broker-Dealer (member FINRA/S IPC). HSI conducts its investment advisory business under the business name Horan Wealth Management (“HWM”). Furthermore, HSI is affiliated with Horan Capital Advisors, LLC (“HCA”) through an associated person who has related ownership within the HORAN companies. HCA is an independently SEC registered Investment Adviser within the HORAN enterprise. All our financial professionals (“Professionals”) are dually licensed and registered with both HSI and HWM, allowing them to offer you brokerage and investment advisory services.
HSI additionally offers various types of life, long-term care, and disability insurance strategies for individual consumers. HSI also partners business-to-business with employers to select, implement and manage their retirement planning strategies. Brokerage and investment advisory services and fees differ and it’s important that you understand the differences. Free and simple tools are available to you to research firms and financial professionals at https://www.investor.gov/CRS, which also provides educational materials about broker-dealers and investment advisers and investing.
Our Professionals are qualified to offer both brokerage services and investment advisory services. Our Financial Professionals focus on utilizing a select limited investment lineup that includes mutual funds, variable & fixed annuities, 529 plans, exchange traded funds (“ETF”), life insurance, and brokered certificates of deposit (e. g. CDs). The range of investment options available to you may be limited depending on your investment size, ability to meet account minimum requirements, your personal suitability and other such qualifications. Additionally, the investments offered through our brokerage services and advisor do vary. We encourage you to ask your Professional whether any investment limitations or account requirements apply.
Furthermore, you should ask your Professional if the advice they are providing or the recommendations they offer are part of a brokerage service or advisory service. Some of the key differences between brokerage and investment advisory services are described below.
The investment advisory services we offer include asset management, pension consulting, publication of periodicals/newsletters, educational seminars and financial planning.
We manage accounts on either a discretionary basis or non-discretionary basis, as agreed to by you and your Professional. Discretionary means we will implement transactions without seeking your prior consent and Non-Discretionary means we will seek your prior consent for every transaction.
We will typically monitor accounts and specific investments within accounts, on an ongoing basis to align with your investment goals. However, in some cases, such as financial planning only engagements, we won’t provide ongoing monitoring unless agreed upon.
For more detailed information about our advisory services, you may request a free copy of our Form ADV and refer to Item 4 & 7 of ADV Part 2.
We are an introducing broker-dealer, meaning we have selling agreements with, and deal directly with product underwriters / sponsors who handle the execution and settlement of trade orders it receives from us and our clients. These product sponsors also hold your securities / funds for safekeeping (known as having “custody” of your securities / funds).
In most cases, we provide recommendations to you on specific investments, but you make the final investment decisions for your account.
We do not monitor brokerage accounts
For more detailed information about our brokerage services you can visit our website.
If applicable to your account, the third party service providers that we utilize, such as the respective mutual fund and insurance underwriters / sponsors, will directly charge you for other fees in addition to brokerage commissions and advisory fees, including: (1) account maintenance fees such as custody, trade confirmation processing, corporate actions and transfer fees; (2) cash management fees, such as cash sweep, checking and wire fees; and (3) investment-specific fees such as those for administration of alternatives investments or for foreign securities. You should understand that these fees are not charged by us if your investment is in an account that is held directly with the fund sponsor. Generally, advisory fees don’t include any brokerage commissions and other transactions costs, redemption fees, wire transfer fees, overnight check fees, account closing fees, or any other charges imposed by the administrator, custodian, or other service provider.
You will pay fees and incur 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.
For additional information, please request a copy of our Regulation Best Interest (“Reg BI”) Disclosure Brochure and review Item 5 of our ADV Part 2A. You may also refer to your account opening paperwork, consult with your financial professional, or contact our Chief Compliance Officer, Thomas Shoemake.
When we provide you with a recommendation as your broker-dealer or act as your investment adviser, we must act in your best interest and not put our interest ahead of yours. At the same time, the way we make money may create some conflicts with your interests. You should understand and ask us about potential conflicts because they can affect the recommendations and investment advice we provide you. Here are some examples to help you understand what this means:
We receive compensation from third parties related to investments you make in certain products, including mutual funds, and annuities. This compensation includes ongoing distribution charges, such as 12b-1 fees or commission trails, which an investment product charges you and then pays to us.
Horan Capital Advisors, LLC (referred to as “HCA”) is affiliated with HSI through an associated person who has related ownership interests within the HORAN companies. In some cases, HSI will utilize HCA as a sub-advisor for investment management purposes for our clientele, from which HSI and HCA may share the advisory fees assessed to sub-advised accounts. A controlling shareholder of HSI is an indirect owner and President of HCA, which creates an incentive for us to refer business between the two entities.
Horan Associates, Inc. (referred to as “HAI”) is an employee benefits / insurance brokerage firm offering corporate strategies for health, disability, dental, vision and miscellaneous other lines of benefit coverage. HAI is under common ownership and control as HSI. We encourage our Professionals to refer you to use companies within our network of organizations. If you elect to purchase a strategy / solution through HAI, your Professional may receive a discretionary form of compensation from that purchase, therefore creating an incentive to encourage you to buy these products with us.
HORAN is a conglomeration of related but independent companies. HORAN affiliated employees and Professionals are encouraged to positively promote the spectrum of our services and in doing so, are eligible for an annual discretionary bonus based upon their introduction of a potential business opportunity to another HORAN employee or Professional. This internal bonus eligibility incentivizes our Professionals and employees to encourage you to use additional services within our network of businesses.
For additional information, please request a copy of our Regulation Best Interest (“Reg BI”) Disclosure Brochure and see Items 4, 5, 10 and 14 of our ADV Part 2A. You may also refer to your account opening paperwork or consult with your financial professional.
All our Professionals are employees of HSI, or one of our affiliated companies. The offer letter or employment agreement between each Professional and HSI, sets out the payments we make to them. Those who provide investment advisory services receive a portion of the advisory fee you pay. Those who provide brokerage services receive a portion of the commissions or markups/markdowns from your trades. Employees that market retirement plans to businesses receive a commission based on the sale of a plan. Horan collects an ongoing management fee for administering the plan. Receiving a portion of the advisory or brokerage fees you pay to us creates an incentive for them to encourage you to increase your investment account size or trade more frequently. Our Professionals also receive different levels of compensation for selling different types of investments or services. This could include, for example, a share of the 12b-1 fees2, trail commission3, or sales loads4 paid to us by an investment product sponsor. Although your Professional is required to recommend investment products or manage your account in your best interest, these additional forms of compensation create an incentive for them to recommend specific financial products.
None of our Professionals have legal or disciplinary histories. Visit www.investor.gov/CRS for a free and simple search tool to research us and our financial professionals.
For additional information about our products and services, visit www.Investor.gov or BrokerCheck.Finra.org, or visit our website: https://www.horanassoc.com/ and review your account agreement.
For additional information on advisory services, see our Form ADV brochure on IAPD, which can be found on Investor.gov, or on our website and any brochure supplement your Professional provides.
To report a problem to the SEC, you can visit www.Investor.gov or call the SEC’s toll‐free investor assistance line at (800) 732‐0330. To report a problem to FINRA, you can visit www.finra.org or call their help line at (240) 386-4357.
If you have a problem with your investments, account or financial professional, please contact our Chief Compliance Officer, Thomas Shoemake, in writing at 4990 East Galbraith Road, Cincinnati, Ohio 45236.
1 Sponsor means the underwriting insurance company, mutual fund, or other investment company.
2 A 12b-1 fee is an annual marketing or distribution fee on a mutual fund. The 12b-1 fee is considered to be an operational expense and, as such, is included in a fund's expense ratio.
3 A trailing commission is a fee that you pay a financial professional each year that you own an investment. The purpose of a trailing commission is to give an advisor an incentive to review a client's holdings and provide advice.
4 A load is a sales charge paid by mutual fund investors to the brokers or agents who sell the fund to them.