Advisory Business

Aurea Investments LLC is an investment adviser registered in Wisconsin and Illinois. Aurea provides discretionary and non-discretionary portfolio management for individuals. Financial planning is included for portfolio management clients at no additional fee; Aurea does not provide tax or legal advice. Aurea also offers investment advice to sponsors of retirement plans such as 401(k) plans.

Investment Discretion

Aurea manages an account on a discretionary basis when authorized in the advisory agreement or Investment Policy Statement, including authority to select securities and determine the amount and timing of transactions. Clients may impose reasonable restrictions in writing, and non-discretionary services are available at the client's request. For 401(k) plans, the service depends on the fiduciary role selected: ERISA 3(38) discretionary investment management or ERISA 3(21) non-discretionary investment advice.

Fees and Compensation

Portfolio management is charged as an annual fee on assets under management using a blended (tiered) schedule: 1.25% on the first $250,000, 1.00% on the next $250,000, 0.75% on the next $500,000, and 0.50% on assets of $1,000,000 and above. Only the assets within a tier are billed at that tier's rate, and if multiple accounts are householded, the tiers apply to the combined household value. Fees are negotiable based on account size, scope, and complexity, and there is no minimum account size. Interactive Brokers calculates daily fee accruals and deducts the accumulated fee monthly in arrears; Aurea does not bill in advance. Financial planning is included in this fee. Third-party charges, such as brokerage commissions and transaction fees, custodian fees, and mutual fund and ETF expense ratios, are separate from and in addition to the advisory fee and are paid by the client.

401(k) advisory fees depend on the fiduciary role selected: ERISA 3(38) discretionary investment management ranges from 1.00% to 0.35% of plan assets, and ERISA 3(21) non-discretionary investment advice ranges from 0.65% to 0.25%, with lower rates at higher asset levels (see Item 5 of the brochure for each schedule). These fees are negotiable based on plan size and complexity. When a plan engages Aurea, fees are billed quarterly in arrears based on quarter-end plan assets and paid as provided in a written agreement with the plan. Aurea does not currently charge any 401(k) plan an advisory fee; see Conflicts of Interest below regarding Mr. Thayer's part-time role advising a 401(k) plan.

Neither the firm nor any supervised person accepts compensation, including commissions, 12b-1 fees, trails, or revenue sharing, for the sale of securities or investment products.

Material Risks

Investing in securities involves risk of loss that clients should be prepared to bear. Long-term diversified portfolios of ETFs, mutual funds, equities, and fixed income carry market, equity, interest-rate, credit, inflation, liquidity, style, and concentration risks. ETFs and mutual funds also carry fund-level expenses and may not track their benchmarks, and ETFs can trade at a premium or discount to their net asset value. Income and defensive allocations carry duration, reinvestment, credit-quality deterioration, and call risks, and dividend strategies may underperform growth styles. Higher turnover can increase costs. Aurea does not currently use options or margin in client accounts and would obtain the client's written authorization and update the brochure before doing so.

Conflicts of Interest

Jack Thayer, the firm's sole owner, has outside business activities: he is a Business Analyst at Brookdale Senior Living Inc., a publicly traded company; the founder and owner of VeriSight Analytics, LLC, a software company that serves skilled nursing facilities; and a part-time W-2 employee of Senior Management Inc., where he makes investment recommendations regarding the company's 401(k) plan. Those recommendations require approval by the plan's authorized decision-maker, he does not have independent investment discretion for the plan, and Aurea does not charge the plan a fee. He spends approximately 15–20 hours per week at Brookdale and 10–20 hours per week at VeriSight Analytics (for each, 5–10 of those hours may occur during securities trading hours), and less than 5 hours per week on the Senior Management Inc. role, some of which may occur during trading hours. Because he divides his time among these activities, the time he has available for advisory clients is limited.

Senior Management Inc. is owned by members of Mr. Thayer's immediate family, who are also advisory clients of the firm, and is a customer of VeriSight Analytics, LLC. These relationships give him financial and personal incentives to keep those business and family relationships in good standing, which could influence the advice he gives the 401(k) plan, including support that affects plan participants, and the advice he gives family members who are clients. When acting for the plan, he must act in the interests of the plan and its participants, and when advising clients he must act in each client's best interest. Aurea generally recommends that clients open accounts at Interactive Brokers LLC, which is not affiliated with Aurea; because Aurea generally trades client accounts through Interactive Brokers, clients may not receive the lowest available commission or the best execution in every case. The brochure also describes conflicts related to personal trading (Item 11) and brokerage practices (Item 12).