Firm Description Beta Capital Management, LLC (“Beta” or the “Adviser”), was founded in 2011 and offers
investment advisory services to individuals, institutions, trusts, estates, corporations and
other business entities. Beta’s investment advisory services provide clients with
investment advice and recommendations that are recommended to be used to implement
their financial plans.
Investment advice is an integral part of financial planning and Beta Capital Management,
LLC advises clients regarding securities transactions, cash flow, college planning, and
retirement planning.
Investment advice is provided on either a discretionary or non-discretionary basis, with
each client making the final decision on investment selection when being advised on a non-
discretionary basis. When the Adviser is advising clients on a discretionary basis, Beta can
make the final investment decisions and place trades for clients under a limited power of
attorney. Beta does not act as a custodian of client assets, therefore, the client always
maintains asset control.
Principal Owners 100% of Beta is principally owned by Credit Andorra U.S.G.P. For more information
related to the ownership or principal structure of the Adviser, please contact Beta or visit
www.adviserinfo.sec.gov.
Types of Advisory Services Beta Capital Management, LLC provides investment supervisory services. More
specifically, Beta provides Asset Management Services, Advisory Services, and furnishes
investment advice through consultations on both a fixed fee and/or hourly basis.
On more than an occasional basis, Beta Capital Management, LLC furnishes advice to
clients on matters not involving securities, such as financial planning matters, taxation
issues, and trust services that may include estate planning.
Tailored Relationships The goals and objectives for each client are documented by the Adviser and will vary by
client. Investment policy statements can be created to reflect the stated goals and objectives
of each client. Beta’s Investment Adviser Representatives (“IARs”) work with their clients
to identify their investment goals and objectives, as well as risk tolerance, in order to create
an initial portfolio allocation designed to complement the client’s financial situation and
personal circumstances.
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The initial meeting to review clients’ investment portfolios may be conducted by
telephone or in person and is free of charge. The initial meeting is considered an
exploratory interview to determine the extent to which financial planning and
investment management may be beneficial to each potential and current client.
The IAR can periodically rebalance the client’s account to maintain the initially agreed
upon strategic and tactical asset allocation. However, no changes are made to the agreed-
upon asset allocation in non-discretionary accounts without prior client review and consent.
Clients have ready access to their respective IAR. IAR’s are not required to be available
for unscheduled or unannounced visits by clients. However, IARs are expected to
periodically meet with clients and should generally be available to take client telephone
calls on advisory-related matters. Each client has the opportunity to place reasonable
restrictions on the type of investments to be held in the portfolio.
Other professionals (e.g., lawyers, accountants, insurance agents, etc.) may be
recommended to clients or engaged directly by the client on an as-needed basis. Conflicts
of interest related to recommendations of other professionals will be disclosed to the client
in the event they should occur.
Beta’s Agreements are not assigned without client consent.
Types of Agreements Beta offers a variety of customized advisory services, which are outlined and defined in
each client’s investment advisory agreement.
Advisory Service Agreement Most clients choose to have Beta manage their assets in order to obtain ongoing in-depth
advice and investment planning. All aspects of the client’s financial affairs are reviewed,
which may include those of their children. Realistic and measurable goals are set and
objectives to reach those goals are defined. As goals and objectives change over time,
suggestions are made and implemented on an ongoing basis.
The scope of work and fee for an Advisory Service Agreement is provided to the client in
writing prior to the start of the relationship. An Advisory Service Agreement includes:
cash flow management; investment management (including performance reporting);
education planning; retirement planning; estate planning; as well as the implementation of
recommendations within each area.
The annual Advisory Service Agreement fee is based on a percentage of the investable
assets according to the following schedules:
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Fee Schedule 1 SECURITIES OFFERED THROUGH BETA CAPITAL SECURITIES LLC
INVESTMENT MANAGEMENT FEES OF BETA CAPITAL MANAGEMENT LLC Assets Under Mgmt Advisory Fee (does not include execution fees)
$1-$3 Million 1.55%
$3-$10 Million 1.25%
$10-$25 Million 0.95%
$25 Million or greater 0.65%
Orders executed through Beta Capital Securities LLC, affiliated broker-dealer will be charged a $50.00 execution charge per transaction. FUNDS TO BE INVESTED: US$____________________________________ INVESTMENT MANAGEMENT FEE TO BE CHARGED: _____________________________
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Fee Schedule 2 SECURITIES OFFERED THROUGH BETA CAPITAL SECURITIES LLC
INVESTMENT MANAGEMENT FEES OF BETA CAPITAL MANAGEMENT LLC Advisory Fee 0.375% Plus Commissions & Fees Charged by Beta Capital Securities LLC BETA CAPITAL SECURITIES LLC COMMISSIONS FEE MINIMUM
Equities 1% $100
Fixed Income (see below)
Agency Only $150
Investment Grade High Yield
0-3 years 30 bps 0-3 years 65 bps
3-5 years 40 bps 3-5 years 75 bps
5-10 years 50 bps 5-10 years 85 bps
10 years + 60 bps 10 years + 100 bps
*Illiquid bonds will be analysed case by case
Options 1% $100 + $1.00/contract
Mutual Funds - Fixed Income 1% $100
Mutual Funds - Equity 1.5% $100
Alternative Management Funds 2% $150
Structured Products 2% $150
Commodity Futures (round-turn) $90 + exchange fees
Foreign Exchange Conversions
Standard settlement is T+2 (the transaction date plus 2 business days) on most currencies.
The costs for this service are built into the foreign exchange rate. Please note that currency
conversions must be for amounts of $5000 or more.
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Fee Schedule 3 SECURITIES OFFERED THROUGH AFFILIATED CUSTODIAN
INVESTMENT MANAGEMENT FEES OF BETA CAPITAL MANAGEMENT LLC Assets Under Mgmt Advisory Fee Affiliated Administrative & Custody Fee (does not include execution fees) $1-$3 Million 1.25% 0.30%
$3-$10 Million 1.00% 0.25%
$10-$25 Million 0.75% 0.25%
$25 Million or greater 0.50% 0.15%
Orders executed through Beta Capital Securities LLC, affiliated broker-dealer will be charged a $50.00 execution charge per transaction. FUNDS TO BE INVESTED: US$____________________________________ INVESTMENT MANAGEMENT FEE TO BE CHARGED: _____________________________ B e t a C a p i t a l M a n a g e m e n t , L L C P a g e | 6
Fee Schedule 4 SECURITIES OFFERED THROUGH A NON-AFFILIATED CUSTODIAN
INVESTMENT MANAGEMENT FEES OF BETA CAPITAL MANAGEMENT LLC Assets Under Mgmt Advisory Fee (does not include execution fees)*
$1-$3 Million 1.55%
$3-$10 Million 1.25%
$10-$25 Million 0.95%
$25 Million or greater 0.65%
* Fees Charged by Custodian are not shared with Beta Capital Management LLC. Custodian can choose to execute through Beta Capital Securities LLC.
Client relationships can be established and exist where the fees are higher or lower than
the fee schedules provided above.
Hourly Planning Engagements Beta provides hourly advisory and/or planning services for clients who need advice on a
limited scope of work. The hourly rate for limited scope engagements varies, yet will not
exceed $500 per hour.
Asset Management Client’s portfolio may consist of a variety of financial products, including, but not limited
to exchange-traded funds (“ETFs”), mutual funds, equities, options, bonds, and potentially
other products. The investment strategies utilized and portfolios constructed and managed
depend on the individual client’s investment objectives and goals as provided to the IAR.
Initial public offerings (“IPO’s”) are not available through Beta.
Please note that investment products are typically purchased or sold through a brokerage
account when appropriate. The brokerage firm typically charges a fee for investment
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products and Beta almost exclusively recommends clients to its affiliated FINRA broker-
dealer, Beta Capital Securities, LLC (“BCS” or the “Firm”); as a broker/dealer, the Firm
provides a variety of financial products and/or services and may render advice as to the
value and/or advisability of purchasing or selling securities, without receiving special
compensation and solely incidental to the conduct of its business as a broker/dealer.
General securities accounts for brokerage customers of the Firm are maintained and
custodied on a fully disclosed basis by Raymond James & Associates.
The annual Asset Management Service Agreement fee is based on a percentage of the
investable assets according to the following schedules listed above Schedule 1-4.
Client relationships can be established and exist where the fees are higher or lower than
the fee schedules provided above.
Please be advised that clients can choose to utilize a different broker-dealer, aside from
BCS and similar products and services can be purchased for a lower cost than offered by
the Firm.
As of December 31, 2018, Beta managed approximately 54 accounts with $190,555,802 in
assets on a discretionary basis and approximately 57 accounts with $133,343,188 in assets
on a non-discretionary basis.
Termination of Agreement Although the Advisory Service Agreement is an ongoing agreement and constant
adjustments are required, the length of service to the client is at the client’s discretion. The
client or the investment manager can terminate an Agreement by written notice to the other
party with a (30) thirty – day advance notice or as agreed upon otherwise between the client
and the Adviser.
If an agreement is terminated during a period in which the client has already paid Beta its
advisory fees in advance, then the Adviser will reimburse, on a pro-rated basis, the
remaining advisory fees collected for any service not rendered; these fees will be sent to
the client’s address of record, unless otherwise directed by the client, within (30) days of
termination of the agreement.
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Description Beta bases its fees on a percentage of assets under management, hourly charges, or fixed
fees. Some fixed fees are priced based on the complexity of work, especially when asset
management is not the most significant part of the relationship. All fees are negotiable
between the Adviser and each client.
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Fee Billing All fees are billed either monthly or quarterly in arrears, meaning that we invoice after the
three-month billing period has ended. Payment in full is expected upon invoice
presentation. Beta also debits relevant fees directly from accounts at its custodian,
Raymond James & Associates or any other custodian the client chooses. The client must
consent in advance to direct debiting of their investment account.
Hourly and fixed fees are billed in advance, with the balance due upon delivery of the
specific advice or services provided or as otherwise agreed upon between the client and the
Advisor.
Other Fees Custodians typically charge transaction fees on purchases or sales of certain investment
products, including, but not limited to mutual funds and exchange-traded funds. These
transaction charges are usually small and incidental to the purchase or sale of a security.
The selection of the security is considered more important than the nominal fee that the
custodian charges to buy or sell the security.
Beta in its sole discretion, can waive its minimum fee and/or charge a lesser investment
advisory fee based upon certain criteria (e.g., historical relationship, type of assets,
anticipated future earning capacity, anticipated future additional assets, dollar amounts of
assets to be managed, related accounts, account composition, negotiations with clients,
etc.).
In addition to investment advisory fees, IARs who are dually registered as registered
representatives of its affiliate broker-dealer, Beta Capital Securities, LLC can receive
compensation in the form of 12b-1 fees from the sale of certain investment products and/or
facilitating the sale of other products and services for clients who do not necessarily have
an advisory agreement with Beta. This compensation is in consideration for various
services that Beta and their associated persons provide to clients such as presenting
information regarding new products and services as well as providing ongoing portfolio
management of client accounts.
Expense Ratios Mutual funds generally charge a management fee for their services as investment
managers. The management fee is called an expense ratio. For example, an expense ratio
of 0.50 means that the mutual fund company charges 0.5% for their services. These fees
are in addition to the fees paid by you to Beta.
Performance figures quoted by mutual fund companies in various publications are after
their fees have been deducted.
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Past Due Accounts and Termination of Agreement Beta reserves the right to stop work on any account that is more than (10) ten days overdue
and reserves the right to terminate any engagement where a client has willfully concealed
or has refused to provide pertinent information about financial situations when necessary
and appropriate, in Beta Capital Management LLC’s judgment, to providing proper
financial advice. Any unused portion of fees collected in advance will be refunded within
(30) thirty days as previously described in the Brochure.
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Description Beta provides portfolio management services to high net worth individuals, corporations
and banking/thrift institutions. Client Relationships vary in scope and length of service.
Account Minimums
The minimum account size is typically $100,000 of assets under management, yet
depending upon circumstances, Beta has the discretion to waive the account minimum. For
instance, accounts of less than $100,000 can be set up when the client and the Adviser
anticipate that the client will add additional funds to the accounts bringing the total to
$100,000 within a reasonable period of time. Other exceptions will apply to employees of
Beta and their relatives, or relatives of existing clients.
Clients with assets below the minimum account size can be subject to pay a higher
percentage rate on their annual fees than the fees paid by clients with greater assets under
management.
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Methods of Analysis Security analysis methods may include charting, fundamental analysis, technical analysis,
and cyclical analysis.
The main sources of information include financial newspapers and magazines, inspections
of corporate activities, research materials prepared by others, corporate rating services,
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timing services, annual reports, prospectuses, filings with the Securities and Exchange
Commission, and company press releases.
Investment Strategies The investment strategy for a specific client is based upon the objectives stated by the client
during consultations. The client may change these objectives at any time. Beta’s
investment strategies may vary greatly per client and include both passive and/or active
asset management.
Other strategies may include long-term purchases, short-term purchases, trading, short
sales, margin transactions, and option writing (including covered options, uncovered
options or spreading strategies).
Risk of Loss All investment programs have certain risks that are borne by the investor. Our investment
approach constantly keeps the risk of loss in mind. Investors face the following investment
risks:
Interest-rate Risk: Fluctuations in interest rates may cause investment prices to
fluctuate. For example, when interest rates rise, yields on existing bonds become
less attractive, causing their market values to decline.
Market Risk: The price of a security may drop in reaction to tangible and intangible
events and conditions. This type of risk is caused by external factors independent
of a security’s particular underlying circumstances. For example, political,
economic and social conditions may trigger market events.
Inflation Risk: When any type of inflation is present, a dollar today will not buy as
much as a dollar next year, because purchasing power is eroding at the rate of
inflation.
Currency Risk: Overseas investments are subject to fluctuations in the value of the
dollar against the currency of the investment’s originating country. This is also
referred to as exchange rate risk.
Reinvestment Risk: This is the risk that future proceeds from investments may
have to be reinvested at a potentially lower rate of return (i.e. interest rate). This
primarily relates to fixed income securities.
Business Risk: These risks are associated with a particular industry or a particular
company within an industry. For example, oil-drilling companies depend on
finding oil and then refining it, a lengthy process, before they can generate a profit.
They carry a higher risk of profitability than an electric company, which generates
its income from a steady stream of customers who buy electricity no matter what
the economic environment is like.
Liquidity Risk: Liquidity is the ability to readily convert an investment into cash.
Generally, assets are more liquid if many traders are interested in a standardized
product. For example, Treasury Bills are highly liquid, while real estate properties
are not.
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Financial Risk: Excessive borrowing to finance a business’ operations increases
the risk of profitability, because the company must meet the terms of its obligations
in good times and bad. During periods of financial stress, the inability to meet loan
obligations may result in bankruptcy and/or a declining market value.
The above risks are not meant to represent all risks associated with investing, and
investments typically carry the potential for a loss of your total investment. Please discuss
the risks associated with investing with your IAR to ensure you are comfortable with the
level of risks in your portfolio.
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Legal and Disciplinary The Adviser and its employees have not been involved in legal or disciplinary events
related to past or present investment clients since the last Form ADV filing.
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Broker-Dealer Registration As previously disclosed in this brochure, Beta maintains an affiliated FINRA registered broker-
dealer, Beta Capital Securities LLC (CRD No. 38964) (“BCS”). Beta’s management or associated
persons are registered and associated with BCS as registered representatives. Beta’s arrangement
and relationship with BCS, a registered broker-dealer that is under common control with the
Adviser is material. Beta utilizes BCS as an introducing broker-dealer for certain securities
transactions of advisory clients. In such case, BCS and/or associated persons will receive
compensation for brokerage transactions affected in these advisory accounts, and for the purchase
of investment products recommended, which poses a conflict of interest. For example, Beta
utilizes BCS as an introducing broker-dealer for certain equity and fixed income trades; this is due
to, among other factors, market-competitive commission rates, a trading interface with tools
suitable for clients’ equity and fixed income trading activities, and quality of execution. BCS has
established policies and procedures to mitigate conflicts and address applicable regulatory
requirements. However, lower fees for comparable services could be available from other sources.
Clients are encouraged to request additional information regarding potential conflicts of interest.
Other – Financial Affiliates Beta maintains common ownership with a number of affiliated entities that provide financial
services, insurance services, and/or other industry related activities. These entities include:
No. Company Country Services 1 BANCO ALCALA SA Spain Banking
2 BANCO CREDIT ANDORRA (PANAMA) Panama Banking
3 BANQUE DE PATRIMOINES PRIVES Luxembourg Banking
4 BETA CAPITAL SECURITIES LLC USA Broker-dealer
5
CA LIFE INSURANCE EXPERTS CIA. DE
SEGUROS Y REASEGUROS, SAU
Spain Insurance
6
CA MEXICO ASESORES PATRIMONIALES EN
INVERSIONES INDEPENDIENTES, SACV
Mexico
Banking, Broker-dealer, Advisory,
Insurance, Pension Consultant
7 CA MEXICO GESTORIA SAPI Mexico Advisory Services
8 CA PERU SOCIEDAD SOCIEDAD DE BOLSA, SAC Perú Asset Management
9 CREDI-INVEST SA Andorra
Banking, Broker-dealer, Advisory,
Insurance, Pension Consultant
10 CREDIT ANDORA URUGUAY SA Uruguay
Representation of financial entities
incorporated abroad
CREDIT ANDORRA ASSET MANAGEMENT
LUXEMBOURG SOCIETE ANONYME
Luxembourg Advisory services
12 CREDIT ANDORRA PANAMA PATRIMONIAL Panama Banking
13 CREDIT ANDORRA S.A. Andorra
Banking, Broker-dealer, Insurance,
Pension Consultant
14 CREDIT ASSEGURANCES, SAU Andorra Insurance
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15 GESACALA SGIIC, SAU Spain Broker-dealer
16 INVESTCREDIT SICAV/CREDITINVEST SICAV Luxembourg Fund Manager
17 PRIVATE INVESTMENT MANAGEMENT SA Switzerland Advisory
PRIVATE INVESTMENT MANAGEMENT (PIM)
ADVISORS PANAMA SA
Panama Advisory
19 SOCIETE GENEVOISE D’INVESTISSEMENTS, SA Switzerland Broker-dealer
Affiliations As previously disclosed in this brochure, Beta has arrangements that are material to its advisory
of its clients with a related person or entity who is a broker-dealer. As a result of such relationships,
the potential for conflict exists in that Beta typically refers all clients to its affiliated broker-dealer
or other affiliates. Beta maintains robust procedures to mitigate and adequately handle any
conflicts that arise between its affiliated entities. The fees and commissions charged by the Firm
and the broker-dealer in which Beta refers its clients can potentially be found at a lesser cost.
Commodity Pool Operator, Commodity Trading Adviser, Futures Commission Merchant Registration
The Adviser and its management persons are not registered or associated with the Commodity
Futures Trading Commission (“CFTC”) as a futures commission merchant (“FCM”), a commodity
pool operator (“CPO”) or a commodity trading advisor (“CTA”) or an associated person of the
foregoing entities.
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and Personal Trading The Advisors Act imposes a fiduciary duty on Investment Advisors. As a fiduciary, Beta has a
duty of utmost good faith to act solely in the best interest of each of our clients. Our clients entrust
us with their funds and/or investments, which in turn places a high standard on our conduct and
integrity. Our fiduciary duty compels all employees to act with the utmost integrity in all of their
dealings. This fiduciary duty is the core principle underlying our “Code of Ethics” and represents
the expected basis of all of our dealings with our clients. The Code includes policies and
procedures developed to protect client’s interests in relation to the following topics:
The duty at all times to place the interests of clients first;
The requirement that all personal securities transactions be conducted in such a manner as
to be consistent with the code of ethics and to avoid any actual or potential conflict of
interest or any abuse of an employee’s position of trust and responsibility;
The principle that investment advisor personnel should not take inappropriate advantage
of their positions;
The fiduciary principle that information concerning the identity of security holdings and
financial circumstances of clients is confidential; and
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The principle that independence in the investment decision-making process is paramount.
We will provide a copy of the Code to any client or prospective client upon request.
Prevention of Insider Trading Adviser has adopted policies designed to prevent insider trading that is more fully described in the
Code. Adviser’s policy on insider trading applies to securities trading and information handling by
all Supervised Persons of Adviser (including spouses, minor children and adult members of their
households and any other relative of a Supervised Person on whose behalf the Supervised Person
is acting) for their own account or the account of any client of Adviser.
Adviser takes its obligation to detect and prevent insider trading with the utmost seriousness.
Adviser can impose penalties for breaches of the policies and procedures contained in this manual,
even in the absence of any indication of insider trading. Depending on the nature of the breach,
penalties can include a letter of censure, profit “give ups,” fines, referrals to regulatory and self-
regulatory bodies and dismissal.
Personal Securities Transactions Periodic Reports As more fully described in the Code, “access persons” are required to submit reports detailing their
personal securities holdings to the Chief Compliance Officer on an initial basis, a quarterly basis,
and an annual basis.
As an alternative to submitting quarterly transaction reports, Adviser requires persons who are
“access persons” to submit brokerage statements or trade confirmations as long as such documents
contain the information required under Rule 204A-l(b)(2)(i)(A)-(E) under the Advisers Act.
Initial Public Offerings and Limited Public Offerings Access Persons must obtain prior written approval from the Chief Compliance Officer before
investing in initial public offerings (“IPOs”) or limited offerings (i.e., private placements). In the
event the Chief Compliance Officer wishes to purchase IPOs or the securities of a private
placement for his/her own employee account, the Chief Compliance Officer must obtain prior
written approval from the Adviser’s Board Committee.
Review of Personal Securities Reports The Chief Compliance Officer (or its designee) is responsible for reviewing the Access Person’s
Quarterly Transaction Reports as well as the Initial Holdings Report and the Annual Holdings
Report as part of Adviser’s duty to maintain and enforce its Code.
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In instances when the Chief Compliance Officer has engaged in personal securities transaction,
the Adviser’s Board Committee shall review the Chief Compliance Officer’s brokerage statements
and trade confirmations.
Outside Business Activities and Private Investments of Employees Unless otherwise consented by the Chief Compliance Officer, all employees are required to devote
their full time and efforts to Adviser’s business. As such, no person can make use of either his or
her position as an employee or information acquired during employment, or make personal
investments in a manner that creates a conflict, or the appearance of a conflict, between the
employee’s personal interests and Adviser’s interests. Accordingly, every employee is required
to complete a disclosure form and have the form approved by Adviser’s Chief Compliance Officer
prior to serving in any of the capacities or making any of the investments more fully described in
the Code.
Reporting Violations All Supervised Persons (any officer, director, partner and employee of Adviser) are required to
report actual or known violations or suspected violations of Adviser’s Code promptly to the Chief
Compliance Officer or his designee.
Any report of a violation or suspected violation of the Code will be treated as confidential to the
extent permitted by law.
As part of Adviser’s obligations to conduct an annual review of all of its policies and procedures
pursuant to Rule 206(4)-7 of the Advisers Act, the Chief Compliance Officer shall review on an
annual basis the adequacy of the Code and the effectiveness of its implementation.
Acknowledgement of the Code
Each employee will execute a written statement certifying that the employee has (i) received a
copy of Adviser’s Code; (ii) read and understands the importance of strict adherence to such
policies and procedures; and (iii) agreed to comply with the Code.
Training and Education
All Supervised Persons, i.e., all employees, are to receive training on complying with the Code on
an annual basis as part of Adviser’s annual employee compliance review meeting to ensure that
all employees fully understand their duties and obligations and how to comply with the Policy’s
procedures.
Participation or Interest in Client Transactions and Associated Conflicts of Interest Beta can recommend or invest in securities, including funds, issued or managed by its affiliates
(or where the affiliate acts as general partner) in which its affiliates have a material financial
interest. The Adviser has polices that require personnel who develop advice and recommendations
for clients to render only disinterested and impartial advice to clients and to comply with other
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fiduciary obligations, including having an adequate basis in fact for all recommendations and an
obligation to recommend only investments that are suitable for the particular client.
The potential conflicts of interest involved in any such transactions are generally governed by
Adviser’s Code. Pursuant to the stipulations of the Code, Adviser or a related person can buy or
sell for itself securities that it also recommends to clients. The potential conflicts of interest
involved in such transactions are governed by the Code, which establishes sanctions if its
requirements are violated and requires that Adviser and employees place the interests of Adviser’s
clients above their own.
When Beta Capital Securities, LLC (“BCS”) is acting as a broker with respect to a fixed income
transaction executed for a client of Adviser, it will generally act on a riskless principal basis rather
than on an agency basis. A riskless principal transaction refers to a transaction where BCS, after
receiving an order to buy (or sell) a security for a client, purchases (or sells) the security for its
own account to offset a contemporaneous sale to (or purchase from) the client. In such instances,
the Adviser is required to disclose to its advisory clients in writing before the completion of such
transaction the capacity in which it was acting and to obtain written consent of advisory clients for
such transactions. BCS charges a mark-up or mark-down in certain riskless principal transactions.
Equity transactions are generally executed on an agency basis, but can be executed on a riskless
principal basis using the same procedures and equivalent pricing as for fixed income securities.
From time to time, BCS can engage in agency cross transactions for Adviser’s clients. An agency
cross transaction occurs when BCS acts as broker for both Adviser’s advisory clients and for other
customers of BCS on the other side of the transaction. Agency cross transactions will be executed
only after obtaining prospective written consent from the advisory client, which consent can be
terminated at any time with written notice to Adviser. Adviser does not advise both the seller and
purchaser with regard to an agency-cross transaction. BCS can also engage from time to time in
so-called “cross transactions” in which it affects trades between Adviser’s advisory client
accounts. BCS will only effect such transactions to the extent that it is able to achieve “best
execution” for each client. The price will be set generally at the mid-point between the bid and
ask price (or last sale price in the case of exchange listed securities) and BCS will not charge
commissions or other compensation in connection with the transaction.
Investments in Securities by Adviser and its Personnel Adviser’s personnel or a related person can invest in the same or similar securities and investments
as those recommended to or entered into on behalf of Adviser’s clients. The results of the
investment activities of Adviser’s personnel or related persons for their accounts may differ from
the results achieved by or for client accounts managed by Adviser. The conflicts raised by these
circumstances are discussed below.
Adviser can recommend or effect the purchase or sale of securities in which its related persons or
an affiliate, directly or indirectly, has a position or interest, or of which related or affiliated person
buys or sells for itself. Such transactions may also include trading in securities in a manner
inconsistent with the advice given to Adviser’s clients.
Activities and transactions for client accounts may be impaired or effected at prices or terms that
may be less favorable than would otherwise have been the case had Adviser or related persons not
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pursued a particular course of action with respect to the issuer of the securities. In addition, in
certain instances Adviser’s personnel may obtain information about the issuer that could limit the
ability of such personnel to buy or sell securities of the issuer on behalf of client accounts.
Transactions undertaken by Adviser’s clients may also adversely impact one or more client
accounts. Other clients of the Adviser may have, as a result of receiving client reports or otherwise,
access to information regarding Adviser’s transactions or views that may affect their transactions
outside of accounts controlled by Adviser, and such transactions may negatively impact other
clients’ accounts. A client’s account may also be adversely affected by cash flows and market
movements arising from purchase and sale transactions by, as well as increases of capital in and
withdrawals of capital from, other clients’ accounts. These effects can be more pronounced in less
liquid markets.
The results of the investment activities of a client’s account may differ significantly from the
results achieved by Advisers related persons and from the results achieved by Adviser for other
client accounts. As more fully described above, Adviser has adopted a Code of Ethics. Such Code
of Ethics together with Advisers policies and procedures restrict the ability of certain officers and
employees of Adviser from engaging in securities transactions in any securities that its clients have
purchased, sold or considered for purchase or sale, for an appropriate “black out” period. Other
restrictions and reporting requirements are included in Advisers procedures and Code of Ethics to
minimize or eliminate conflicts of interest.
Trading Alongside by Adviser and its Personnel Client accounts managed by Adviser can trade in the same or similar securities at or about the
same time as accounts managed or advised by affiliates of the Adviser. Investments by Adviser’s
affiliates and their clients may have the effect of diluting or otherwise disadvantaging the values,
prices or investment strategies of a client’s account, particularly in small capitalization, emerging
market or less liquid strategies.
This may occur when portfolio decisions regarding a client’s account are based on research or
other information that is also used to support portfolio decisions for Adviser’s affiliates. If a
portfolio decision or strategy for Adviser’s affiliates’ accounts or the accounts of clients of
affiliates is implemented ahead of, or contemporaneously with, similar portfolio decisions or
strategies for Adviser’s client’s account, market impact, liquidity constraints, or other factors could
result in the account receiving less favorable trading results and the costs of implementing such
portfolio decisions or strategies could be increased.
Advisory personnel who are registered representatives of Beta Capital Securities, LLC (“BCS”)
can receive commission and fees for recommending transactions to brokerage customers of BCS
that are higher than the fees earned for recommending or directing such transactions for clients of
Adviser. In addition to the disclosure in this brochure, personnel who are responsible for
determining the recommendations and investments for Adviser’s client accounts disclose their
status as registered representatives of BCS as well as their receipt of commissions and other fees
for the sale of securities. Adviser also has policies that address these potential conflicts. Adviser’s
polices require personnel who develop advice and recommendations for clients to render only
disinterested and impartial advice to clients and to comply with other fiduciary obligations.
B e t a C a p i t a l M a n a g e m e n t , L L C P a g e | 18
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Selecting Brokerage Firms As previously disclosed in this brochure, Beta has arrangements that are material to its advisory
of its clients with a related person or entity who is a broker-dealer. As a result of this relationship,
the potential for conflict exists in that Beta typically refers all clients to its affiliated broker-dealer.
The fees and commissions charged by the Firm and a broker-dealer in which Beta refers its clients
can potentially be found at a lesser cost.
Best Execution Beta reviews the execution of trades at its custodian on a periodic basis, no less than quarterly.
The review is documented by the Adviser and its affiliated broker-dealer.
Soft Dollars Beta does not currently maintain any soft dollar arrangements.
Order Aggregation Most trades are mutual funds or exchange-traded funds where trade aggregation does not garner
any client benefit.
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Periodic Reviews Account reviews are performed periodically, no less than quarterly by each IAR and by their
Supervisors. Account reviews are performed more frequently when market conditions dictate and
as requested by Beta’s clients.
Review Triggers Other conditions that may trigger a review are changes in the tax laws, new investment
information, and changes in a client's own situation.
Regular Reports Account reviewers are members of the Firm’s Compliance Department, with the assistance of
IARs of the Adviser. They are instructed to consider the client's current security positions and the
likelihood that the performance of each security will contribute to the investment objectives of the
client. Clients receive periodic communications on at least an annual basis and where applicable,
B e t a C a p i t a l M a n a g e m e n t , L L C P a g e | 19
will receive an account statement or performance report no less than quarterly, and often monthly
as activity dictates.
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Incoming Referrals Beta from time to time, receives client referrals, including referrals from its affiliated broker-
dealer. The referrals often come from current clients, attorneys, accountants, employees, personal
friends of employees and other similar sources. While the Adviser is appreciative, it does not
currently compensate referring parties for these referrals.
Referrals Out Beta does not currently accept referral fees or any form of remuneration from other professionals
when a prospect or client is referred to them.
Other Compensation Officers and certain associated persons of the Adviser are also registered representatives of a
broker-dealer. In this capacity, they may facilitate the purchase and/or sale of securities, and other
investment products for their clients, who may or may not have an advisory fee agreement with
Beta. The Advisor’s representatives may receive compensation for these non-advisory services
that they may provide. Such compensation would be in addition to the advisory and other fees that
the Advisor may receive.
Transaction charges or other charges for services to clients by Beta Capital Securities, LLC may
be more or less than other broker/dealers not recommended by the Advisor charge for comparable
services. Clients are not required to use a specific broker/dealer to retain the services of the
Advisor.
Investment products purchased or sold in broker/dealer accounts may generate transaction fees
that would not exist if the purchase or sale were made directly through the issuer of the security,
such as a mutual fund company. Mutual funds held in broker/dealer accounts also charge
management fees. These Mutual fund management fees may be more or less than the mutual fund
management fees charged if the client held the mutual fund directly with the mutual fund company.
These management fees are in addition to the management fee charged by the Adviser.
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Account Statements All assets are held at qualified custodians, which mean the custodians provide account statements
directly to clients at their address of record at least quarterly. The qualified custodian for its client
accounts is primarily held with Raymond James & Associates, Inc. or an affiliate of Credit Andorra
Financial Group, though clients may also hold accounts at other custodians. Adviser also sends
B e t a C a p i t a l M a n a g e m e n t , L L C P a g e | 20
out periodic performance reports. Adviser urges clients to compare the account statements they
receive from their qualified custodian with the statements they receive from Adviser.
Performance Reports Clients are urged to compare the account statements received directly from their custodians to any
performance reports provided by Beta, or even discussions or other communications between the
client and the Adviser.
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Discretionary Authority for Trading Beta can accept discretionary authority to manage securities accounts on behalf of clients. Beta
has the authority to determine, with proper limited power of attorney (i.e. trading authorization)
form signed by client, the securities to be bought or sold, the amount of the securities to be bought
or sold according to client’s risk profile, and the broker or dealer to be used for a purchase or sale
of securities for a client’s account.
Discretionary trading authority facilitates placing trades in your accounts on your behalf to
promptly implement the investment strategy determined according to the suitability profile
completed and discussed with your Investment Advisor.
Limited Power of Attorney A limited power of attorney provides discretionary trading authority to Beta. The client signs a
limited power of attorney so that Beta may practice trading discretion on the client’s account,
without obtaining client consent for each particular transaction.
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Financial Condition Registered investment advisers are required in this Item 18 to provide you with certain financial
information or disclosures about their financial condition. Beta does not require prepayment of
fees six months or more in advance, has no financial commitment that impairs its ability to meet
contractual and fiduciary commitments to clients, and has not been the subject of a bankruptcy
proceeding. Accordingly, no financial statements are required to be provided by Beta to its clients
and prospective clients.
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