PFS Fund Eyes 34% Fee Cut, New Adviser in Strategic Shift

TL;DR

**PFS Funds is slashing fees by 34% and consolidating management under Tandem, making it a clear 'buy' signal for cost-conscious investors.**

AI Summary

PFS Funds' Castle Tandem Fund is proposing a significant change in its investment advisory structure, transitioning from Castle Investment Management, LLC as adviser and Tandem Investment Advisors, Inc. as sub-adviser, to Tandem Investment Advisors, Inc. serving as the sole investment adviser. This strategic shift, driven by Castle's desire to discontinue its long-term advisory role, is expected to result in substantial cost savings for shareholders. The proposed new investment management fee with Tandem is 0.75% of average daily net assets, a 25% reduction from Castle's current 1.00%. Furthermore, the overall net fee is projected to decrease from 1.01% to 0.66%, representing a 34.65% reduction. The fund's day-to-day investment decisions and portfolio managers, including John B. Carew, William Billy L. Little, Jr., Benjamin Ben G. Carew, and Jordan Watson, will remain unchanged under Tandem's direct management. The Board of Trustees unanimously recommends this change, anticipating enhanced competitiveness and consistent portfolio management, with a shareholder meeting scheduled for November 10, 2025, to approve the new agreement.

Why It Matters

This change directly impacts investors by significantly reducing fees, with the overall net fee dropping from 1.01% to 0.66%, making the Castle Tandem Fund more competitive in the crowded mutual fund market. For employees at Tandem Investment Advisors, Inc., this transition solidifies their role and expands their responsibilities, ensuring continuity for the existing portfolio management team. Customers will benefit from lower costs without disruption to investment strategy or portfolio managers. In the broader market, this move highlights the ongoing pressure on fund managers to offer competitive fee structures, potentially spurring other funds to re-evaluate their advisory arrangements.

Risk Assessment

Risk Level: low — The risk level is low because the fund's investment strategy and day-to-day portfolio managers will remain unchanged, ensuring continuity. The primary change is a reduction in fees, with the investment management fee dropping from 1.00% to 0.75% and the overall net fee from 1.01% to 0.66%, which benefits shareholders.

Analyst Insight

Investors should vote FOR Proposal 1 to approve the new investment management agreement with Tandem Investment Advisors, Inc. This will secure lower fees and maintain the existing investment strategy and portfolio management team, directly benefiting their returns.

Key Numbers

• 0.75% — Proposed annual investment management fee rate (Reduced from current 1.00% of average daily net assets)
• 1.00% — Current annual investment management fee rate (Paid to Castle Investment Management, LLC)
• 0.66% — Expected new overall net fee (Significantly less than current 1.01%)
• 1.01% — Current overall net fee (Expected to decrease to 0.66%)
• $316,202 — Management fees earned by Castle (For fiscal year ended June 30, 2025)
• $34,932 — Sub-advisory fees earned by Tandem (Paid by Castle for fiscal year ended June 30, 2025)
• 0.20% — Proposed annual Services Agreement fee (Of the average daily net assets of the Fund)
• 0.30% — Combined fee waiver by Tandem (Through December 31, 2026, for investment advisory and service fees)
• November 10, 2025 — Date of Special Meeting of Shareholders (To approve the new investment management agreement)
• September 17, 2025 — Record date for shareholders entitled to vote (For the Special Meeting)

Key Players & Entities

• PFS FUNDS (company) — Registrant and Trust for Castle Tandem Fund
• Castle Tandem Fund (company) — Portfolio series undergoing advisory change
• Tandem Investment Advisors, Inc. (company) — Proposed new investment adviser and current sub-adviser
• Castle Investment Management, LLC (company) — Current investment adviser stepping down
• James D. Craft (person) — President of PFS Funds
• John B. Carew (person) — Founder, CEO, President, and Portfolio Manager at Tandem
• William Billy L. Little, Jr. (person) — Co-Chief Investment Officer, Senior Vice President, and Portfolio Manager at Tandem
• Benjamin Ben G. Carew (person) — Co-Chief Investment Officer, Vice President, and Portfolio Manager at Tandem
• Jordan Watson (person) — Managing Director, Associate Portfolio Manager at Tandem
• SEC (regulator) — Securities Exchange Act of 1934

FAQ

Risk Factors

• Reliance on Tandem Investment Advisors, Inc. [medium — operational]: The Fund's investment advisory structure is transitioning to a sole adviser model with Tandem Investment Advisors, Inc. This change, while expected to reduce costs, concentrates the Fund's investment management and operational reliance on a single entity. Any disruption or underperformance by Tandem could significantly impact the Fund's performance and shareholder value.
• Shareholder Approval for New Advisory Agreement [medium — regulatory]: The proposed change in investment advisory structure requires shareholder approval. Failure to obtain the necessary votes at the Special Meeting on November 10, 2025, could lead to the Trustees considering alternative options, including seeking another investment adviser or potentially liquidating the Fund. This introduces uncertainty regarding the Fund's future structure and operations.
• Fee Structure and Waivers [low — financial]: While the proposed new investment management fee of 0.75% and overall net fee of 0.66% represent significant reductions from current rates (1.00% and 1.01% respectively), the fee structure includes a proposed annual Services Agreement fee of 0.20% and a combined fee waiver by Tandem of 0.30% through December 31, 2026. The sustainability of these waivers beyond the specified period and the impact of the Services Agreement fee on future net expenses warrant consideration.

Industry Context

The mutual fund industry is highly competitive, with a constant focus on fee compression and performance. Funds are increasingly seeking to streamline operations and reduce expenses to attract and retain investors. Changes in advisory structures, particularly those leading to lower fees and stable management, are viewed favorably by investors and regulators.

Regulatory Implications

The proposed change requires shareholder approval, a standard regulatory process for significant changes to a fund's investment advisory agreement. The SEC's oversight ensures that such changes are in the best interests of shareholders and that disclosures are adequate. The transition to a single adviser simplifies the regulatory oversight compared to a dual adviser/sub-adviser model.

What Investors Should Do

1. Review the Proxy Statement carefully, paying attention to the details of the new investment management agreement with Tandem Investment Advisors, Inc.
2. Vote FOR Proposal 1 to approve the new investment management agreement.
3. Complete and return your proxy card promptly, or vote online/by phone if available.

Key Dates

• 2025-11-10: Special Meeting of Shareholders — Shareholders will vote on the proposed new investment management agreement with Tandem Investment Advisors, Inc.
• 2025-09-17: Record Date for Shareholders — Determines which shareholders are entitled to vote at the Special Meeting.
• 2025-10-06: Date of Proxy Statement and Notice — Informs shareholders about the upcoming meeting and the proposals to be voted on.
• 2025-10-13: Approximate Mailing Date of Proxy Materials — Shareholders begin receiving official notification and voting materials.

Glossary

DEF 14A

A filing with the U.S. Securities and Exchange Commission (SEC) that provides detailed information to shareholders when a company is soliciting their proxy votes. (This document is the proxy statement for the Castle Tandem Fund's special shareholder meeting, outlining the proposed changes and seeking shareholder approval.)

Investment Adviser

A firm or individual registered with the SEC that is paid to manage a client's investment portfolio. (Tandem Investment Advisors, Inc. is proposed to become the sole Investment Adviser for the Castle Tandem Fund, replacing the current dual structure.)

Sub-adviser

An investment adviser that provides investment advisory services to another investment adviser, rather than directly to the client. (Tandem currently acts as a sub-adviser to Castle Investment Management, LLC. Under the new structure, this role will be eliminated as Tandem becomes the primary adviser.)

Average Daily Net Assets

The average value of a fund's net assets over a specific period, typically a month or quarter. This is often used as the basis for calculating management fees. (The proposed investment management fee of 0.75% is calculated based on the Fund's average daily net assets.)

Net Expenses

The total expenses of a fund after any fee waivers or expense reimbursements. This represents the actual cost to shareholders. (The proposal aims to significantly reduce the Fund's overall net expenses from 1.01% to an expected 0.66%.)

Proxy Statement

A document that is required by the SEC to be sent to shareholders before a shareholder meeting, containing information about the matters to be voted on. (This document is the proxy statement for the Castle Tandem Fund's special shareholder meeting, detailing the proposed change in investment advisory structure.)

Year-Over-Year Comparison

This filing is a proxy statement for a special meeting and does not contain comparative financial data from a previous annual report. The primary focus is on the proposed change in investment advisory structure and its expected financial impact, specifically a reduction in management and overall net fees from 1.00% to 0.75% and 1.01% to 0.66%, respectively.

Key Financial Figures

• $316,202 — 2025, Castle earned management fees of $316,202. For its services as the current invest
• $0 million — ds average daily net assets are between $0 million and $50 million, the sub-advisory fee p
• $50 m — y net assets are between $0 million and $50 million, the sub-advisory fee paid by Cas
• $0 — the Funds average daily net assets from $0 to $25 million and (ii) an annual rate
• $25 million — nds average daily net assets from $0 to $25 million and (ii) an annual rate of 0.15% on the
• $50 million — aily net assets between $25 million and $50 million. For the fiscal year ended June 30, 202
• $34,932 — 025, Tandem earned sub-advisory fees of $34,932, which were paid by Castle. Current Su
• $185,793 — , before the waiver described below, of $185,793. Effective April 10, 2025, Castle contr

Filing Documents

• defctproxy.htm (DEF 14A) — 151KB
• image_001.jpg (GRAPHIC) — 5KB
• proxycardfnl.jpg (GRAPHIC) — 488KB
• 0001413042-25-000863.txt ( ) — 830KB
• S000065065
• C000210708 (TANDX)

From the Filing

DEF 14A 1 defctproxy.htm SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant Filed by a Party other than the Registrant o Check the appropriate box: o Preliminary Proxy Statement o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) Definitive Proxy Statement o Definitive Additional Materials o Soliciting Material Pursuant to Sec. 240.14a-12 PFS FUNDS (Name of Registrant as Specified in Its Charter) (Name of Person(s) Filing Proxy Statement, if other than Registrant) Payment of Filing Fee (Check the appropriate box): No fee required. o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 1) Title of each class of securities to which transactions applies: 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): 4) Proposed maximum aggregate value of transaction: 5) Total fee paid: o Fee paid previously with preliminary materials. o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identity the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: 2) Form, Schedule or Registration Statement No.: 3) Filing Party: 4) Date Filed: PFS Funds Castle Tandem Fund 1939 Friendship Drive, Suite C El Cajoin, CA 92020 October 6, 2025 Dear Shareholder: A Special Meeting of the Shareholders of the Castle Tandem Fund (the Fund), a portfolio series of the PFS Funds (the Trust), will be held on November 10, 2025 at Mutual Shareholder Services, LLC, 800 Town Centre Drive, Suite 400 Broadview Heights, Ohio 44147 at 1:00 p.m., Eastern Time for the following purpose: 1. To approve a new investment management agreement between the Trust, on behalf of the Fund and Tandem Investment Advisors, Inc. (Tandem), the Funds current investment sub-adviser. 2. To transact such other business as may properly come before the meeting or any adjournments or postponements thereof. Currently, Castle Investment Management, LLC (Castle) serves as the Funds investment adviser and Tandem serves as the investment sub-adviser making the day-to-day investment portfolio decisions and administering the Funds investment program. Castle has informed the Trusts board of trustees (the Board) that for internal business reasons, it no longer desires to continue to serve as investment adviser to the Fund on a long-term basis and recommended that the Board select and recommend Tandem as the Funds new investment adviser. After consideration of several options (as discussed further in the proxy statement), the Board determined that Tandem, the Funds current investment sub-adviser, is the best candidate to serve as the Funds investment adviser. Importantly, the Funds day-to-day investment decisions and investment strategies will not change and the Funds current portfolio managers at Tandem will continue to serve as the Funds portfolio managers. There would not be a sub-adviser in the new investment advisory structure. The Board believes that having Tandem serve as the investment adviser should make the Fund more attractive in terms of having significantly lower overall total and net expenses, being more competitive in the marketplace, and providing for consistent and stable portfolio management for the Fund. Tandem has proposed an investment management fee at an annual rate of 0.75% of the average daily net assets as compared to the current rate of 1.00% of the average daily net assets and an overall net fee that is expected to be significantly less (0.66% vs 1.01%) than the current overall net fee. Accordingly, the Board has approved Tandem as the new investment adviser subject to shareholder approval and, therefore, is putting forth this proposal for your consideration and approval. We urge you to complete, sign and return the enclosed proxy card promptly. A postage-paid envelope is enclosed for this purpose. Whether or not you plan to be present at the meeting, your vote is important and you are, therefore, strongly encouraged to return a proxy card. If your shares are held in street name, only your bank or broker can vote your shares and generally only upon receipt of your specific instructions. Please contact the person responsible for your account and instruct him or her to execute a proxy card today. We look forward to receiving your proxy so that your shares may be voted at the meeting. Sincerely, James D. Craft President PFS Funds Castle Tandem Fund 1939 Friendship Drive, Suite C El Cajon, CA 92020 October 6, 2025 Important Notice Regarding Ava

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