A. Diversified Investment Strategies, LLC (the “Registrant”) is a limited liability company
formed on December 16, 2004 in the state of Louisiana. Diversified Investment Strategies,
LLC does business as Advisor.Investments, and markets itself as such. The Registrant
became registered as an Investment Adviser Firm in November 2006 and as Producer
Agency for insurance sales by the State of Louisiana in April 2015. The Registrant is owned
by James Pope and Shane Haag.
B. As discussed below, the Registrant offers to its clients (individuals, business entities, trusts
and estates, etc.) investment advisory services. The Registrant does not hold itself out as
providing financial planning or estate planning services. To the extent specifically
requested by a client, Registrant shall generally provide limited consulting services to its
investment management clients on investment and non-investment related matters that are
generally ancillary to the investment management process. The type and scope of the
advisory and consulting services offered will depend upon the amount of assets placed
under the Registrant’s management, either of the Wealth Accumulator or Private Wealth
Management offerings-see below.
INVESTMENT ADVISORY SERVICES
The client can determine to engage the Registrant to provide discretionary investment
advisory services on a fee basis. The Registrant’s annual investment advisory fee is based
upon a percentage (%) of the market value of the assets placed under the Registrant’s
management (between 0.60% and 1.35 %) per the following fee schedule:
C.
Total Account(s) Value Annual Fee
From: To
$0 $499,999 1.35%
$500,000 $999,999 1.10%
$1,000,000 $2,499,999 0.90%
$2,500,000 4,999,999 0.75%
$5,000,000 or greater 0.60%
WEALTH ACCUMULATOR-clients that maintain $500,000 or less of assets under the
Registrant’s management shall be offered*’**:
o Initial personalized financial analysis;
o Account set up with a Designated Advisor;
o Investment model selection;
o Discretionary Investment Management utilizing multiple models;
o Investment reports to your Vault (to the extent you choose to utilize);
o Annual Personal Portfolio Review
PRIVATE WEALTH MANAGEMENT-clients that maintain in excess of $500,000 of
assets under the Registrant’s management shall be offered*’**:
All Wealth Accumulator services plus the following;
o Investment restrictions for personalized Investment management;
o Annual Big Picture Wealth Review
o Annual Personal Tax Preparation for $100;
o Strategic Tax Planning
o Estate Planning Coordination
o
*Please Note: The above (and below) assets under management requirements do not apply to
clients who engaged the Firm prior to January 1, 2019. Those cleints shall continue to be offered
the Private Wealth Management services.
**Please Also Note: The Registrant’s fee will remain the same
regardless of whether or not the client determines to address any or all such offered services.
TAX PREPARATION AND ENROLLED AGENT SERVICES FOR CLIENTS WHO
QUALIFY
The Tax Preparation and Enrolled Agent Services may be offered to Private Wealth
Management clients**.
TAX PREPARATION SERVICES
To the extent requested by Private Wealth Management clients*, the Registrant may
determine to provide tax preparation services on a stand-alone separate fee basis set forth
in a separate engagement letter. Registrant’s typical tax preparation fee is $100 per tax
return.
ENROLLED AGENT SERVICES
To the extent requested by Private Wealth Management clients*, Shantelle Palermo,
Enrolled Agent, may be engaged represent the client before the Internal Revenue Service
(IRS) and/or the State Department of Revenue for matters relating to any of the following.
Communicating with the IRS and/or State Department of Revenue for a taxpayer
regarding the taxpayer's rights, privileges, or liabilities under laws and regulations
administered by the IRS and/or State Department of Revenue.
Representing a taxpayer at conferences, hearings, or meetings with the IRS and/or
State Department of Revenue.
Preparing and filing documents with the IRS and/or State Department of Revenue
for a taxpayer.
Corresponding and communicating with the IRS and/or State Department of
Revenue for a taxpayer.
The terms and conditions, and corresponding fee, for any such engagement shall be set forth
in a separate engagement letter between Ms. Palermo and the client. No client is under any
obligation to engage Ms. Palermo for any of the above services.
Please Note: Cash Positions. At any specific point in time, depending upon perceived or
anticipated market conditions/events (there being no guarantee that such anticipated market
conditions/events will occur), the Registrant may maintain cash positions for strategic purposes.
All cash positions (money markets, etc.) shall be included as part of assets under management for
purposes of calculating the Registrant‘s advisory fee. The Registrant’s Chief Compliance
Officer, Shane Haag, remains available to address any questions that a client or prospective
may have regarding the above fee billing practice.
Non-Investment Consulting/Implementation Services. Neither the Registrant, nor any of its
representatives, serves as an attorney, and no portion of the Registrant’s services should be
construed as legal or accounting services. To the extent requested by a client, the Registrant may
recommend the services of other professionals for certain non-investment implementation purposes
(i.e. attorneys, accountants, etc.). These professionals may also include employees or agents of the
Registrant in their separate registered or licensed capacities as discussed above (Tax Preparation)
and below (Insurance). The client is under no obligation to engage the services of any such
recommended professional. The client retains absolute discretion over all such implementation
decisions and is free to accept or reject any recommendation from the Registrant. Please Note: If
the client engages any unaffiliated recommended professional, and a dispute arises, the client agrees
to seek recourse exclusively from and against the engaged professional. At all times, the engaged
unaffiliated licensed professional[s] (i.e. attorney, accountant, etc.), and not Registrant, shall be
responsible for the quality and competency of the services provided. Please Also Note: It remains
the client’s responsibility to promptly notify the Registrant if there is ever any change in their
financial situation or investment objectives for the purpose of reviewing and revising Registrant’s
previous recommendations or services.
UPDATED Please Note: Retirement Rollovers-Potential for Conflict of Interest: A client or
prospective client leaving an employer typically has four options regarding an existing retirement
plan (and may engage in a combination of these options): (i) leave the money in the former
employer’s plan, if permitted, (ii) roll over the assets to the new employer’s plan, if one is available
and rollovers are permitted, (iii) roll over to an Individual Retirement Account (“IRA”), or (iv) cash
out the account value (which could, depending upon the client’s age, result in adverse tax
consequences). If Registrant recommends that a client roll over their retirement plan assets into an
account to be managed by Registrant, such a recommendation creates a conflict of interest if
Registrant will earn new (or increase its current) compensation as a result of the rollover. When
acting in such capacity, Registrant serves as a fiduciary under the Employee Retirement Income
Security Act (ERISA), or the Internal Revenue Code, or both. No client is under any obligation
to roll over retirement plan assets to an account managed by Registrant. Registrant’s Chief
Compliance Officer, Shane Haag remains available to address any questions that a client or
prospective client may have regarding the potential for conflict of interest presented by such
rollover recommendation.
Schwab. As discussed below at Item 12, when requested to recommend a broker-dealer/custodian
for client accounts, Registrant generally recommends that Schwab serve as the broker-
dealer/custodian for client investment management assets. Broker-dealers such as Schwab charge
transaction fees for effecting securities transactions. The fees charged by Schwab, or any broker-
dealer/custodian directed by the client, are in addition to Registrant’s advisory fee referenced in
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Portfolio Activity. Registrant has a fiduciary duty to provide services consistent with the client’s
best interest. As part of its investment advisory services, Registrant will review client portfolios on
an ongoing basis to determine if any changes are necessary based upon various factors, including,
but not limited to, investment performance, manager changes, debt burden, client
additions/withdrawals, and/or a change in the client’s investment objective. Based upon these
factors, there may be extended periods of time when Registrant determines that changes to a client’s
portfolio are neither necessary nor prudent. The Registrant’s fee shall remain payable during such
periods of account inactivity. Of course, as indicated below, there can be no assurance that
investment decisions made by Registrant will be profitable or equal any specific performance
level(s).
Please Note: Investment Risk. Different types of investments involve varying degrees of risk, and
it should not be assumed that future performance of any specific investment or investment strategy
(including the investments and/or investment strategies recommended or undertaken by Registrant)
will be profitable or equal any specific performance level(s).
ExxonMobil Stock. The Registrant shall generally not maintain discretionary authority regarding
the client's Exxon/Mobil stock holdings. Rather, the Registrant shall monitor and review such
holdings on an ongoing and continuous basis, but will not sell any Exxon/Mobil stock unless and
until the client first directs the Registrant do so.
Client Obligations. In performing its services, Registrant shall not be required to verify any
information received from the client or from the client’s other professionals, and is expressly
authorized to rely thereon. Moreover, each client is advised that it remains their responsibility to
promptly notify the Registrant if there is ever any change in their financial situation or investment
objectives for the purpose of reviewing, evaluating and revising Registrant’s previous
recommendations or services.
Disclosure Statement. A copy of the Registrant’s written Brochure as set forth on Part 2A of Form
ADV shall be provided to each client prior to, or contemporaneously with, the execution of the
Investment Advisory Agreement.
D. The Registrant shall provide investment advisory services specific to the needs of each
client. Prior to providing investment advisory services, an investment adviser
representative will ascertain each client’s investment objective(s) allocation(s). Thereafter,
the Registrant shall allocate and/or recommend that the client allocate investment assets
consistent with the designated investment objective(s) allocation(s). The client may, at
anytime, impose reasonable restrictions, in writing, on the Registrant’s services.
E. The Registrant does not participate in a wrap fee program.
F. As of December 31, 2019 the Registrant had $129,857,966 in assets under management
on a discretionary basis and $15,309,523in assets under management on a non-
discretionary basis.
A. The client can determine to engage the Registrant to provide discretionary investment
advisory services on a fee basis.
INVESTMENT ADVISORY SERVICES
The client can determine to engage the Registrant to provide discretionary investment
advisory services on a fee basis. The Registrant’s annual investment advisory fee is based
upon a percentage (%) of the market value of the assets placed under the Registrant’s
management (between 0.60% and 1.35 %) per the following fee schedule:
G.
Total Account(s) Value Annual Fee
From: To
$0 $499,999 1.35%
$500,000 $999,999 1.10%
$1,000,000 $2,499,999 0.90%
$2,500,000 4,999,999 0.75%
$5,000,000 or greater 0.60%
WEALTH ACCUMULATOR-clients that maintain $500,000 or less of assets under the
Registrant’s management shall be offered*’**:
o Initial personalized financial analysis;
o Account set up with a Designated Advisor;
o Investment model selection;
o Discretionary Investment Management utilizing multiple models;
o Investment reports to your Vault (to the extent you choose to utilize);
o Annual Personal Portfolio Review
PRIVATE WEALTH MANAGEMENT-clients that maintain in excess of $500,000 of
assets under the Registrant’s management shall be offered*’**:
All Wealth Accumulator services plus the following;
o Investment restrictions for personalized Investment management;
o Annual Big Picture Wealth Review
o Annual Personal Tax Preparation for $100;
o Strategic Tax Planning
o Estate Planning Coordination
*Please Note: The above (and below) assets under management requirements do not apply to
clients who engaged the Firm prior to January 1, 2019. Those cleints shall continue to be offered
the Private Wealth Management services.
**Please Also Note: The Registrant’s fee will remain the same
regardless of whether or not the client determines to address any or all such offered services.
TAX PREPARATION SERVICES
To the extent requested by Private Wealth Management clients*, the Registrant may
determine to provide tax preparation services on a stand-alone separate fee basis set forth
in a separate engagement letter. Registrant’s typical tax preparation fee is $100 per tax
return.
Please see additional disclosure at Item 7 below regarding advisory fees.
B. Clients may elect to have the Registrant’s advisory fees deducted from their custodial
account. Both Registrant's Investment Advisory Agreement and the custodial/ clearing
agreement may authorize the custodian to debit the account for the amount of the
Registrant's investment advisory fee and to directly remit that management fee to the
Registrant in compliance with regulatory procedures. In the limited event that the
Registrant bills the client directly, payment is due upon receipt of the Registrant’s invoice.
The Registrant shall deduct fees and/or bill clients monthly in advance, based upon the
market value of the assets on the last business day of the previous month. Clients who
purchase insurance products from representatives of the Registrant will be provided with
the terms of such products pursuant to state insurance laws. Additional disclosure
documents may be provided directly by an unaffiliated insurance company.
C. As discussed below, unless the client directs otherwise or an individual client’s
circumstances require, the Registrant shall generally recommend that Charles Schwab and
Co., Inc. (“Schwab”) serve as the broker-dealer/custodian for client investment
management assets. Broker-dealers such as Schwab charge transaction fees for effecting
certain securities transactions (i.e. transaction fees are charged for certain no-load mutual
funds, individual equity and fixed income securities transactions). In addition to
Registrant’s investment management fee and transaction fees, clients will also incur,
relative to all mutual fund and exchange traded fund purchases, charges imposed at the
fund level (e.g. management fees and other fund expenses).
D. Registrant's annual investment advisory fee shall be prorated and paid monthly, in advance,
based upon the market value of the assets on the last business day of the previous month.
The Registrant does not generally require an annual minimum fee or asset level for
investment advisory services. The Registrant, in its sole discretion, may charge a lesser
investment management fee based upon certain criteria (i.e. anticipated future earning
capacity, anticipated future additional assets, dollar amount of assets to be managed, related
accounts, account composition, negotiations with client, etc.).
The Investment Advisory Agreement between the Registrant and the client will continue in
effect until terminated by either party by written notice in accordance with the terms of the
Investment Advisory Agreement. Upon termination, the Registrant shall refund the pro-
rated portion of the advanced advisory fee paid based upon the number of days remaining
in the billing month.
E. Insurance Commission Transactions. In the event that the client desires, the client can
engage the Registrant and its representatives to purchase insurance products on a
commission basis. The commissions and fees charged by the Registrant may be higher or
lower than those charged by other insurance producers.
1. Conflict of Interest: The recommendation that a client purchase an insurance
commission product presents a conflict of interest, as the receipt of commissions
may provide an incentive to recommend insurance products based on commissions
to be received, rather than on a particular client’s need. No client is under any
obligation to purchase any commission products from Registrant’s representatives.
The Registrant’s Chief Compliance Officer, Shane Haag, remains available
to address any questions that a client or prospective client may have regarding
the above conflict of interest.
2. Please Note: Clients may purchase insurance products recommended by
Registrant through other, non-affiliated insurance agents and agencies.
3. The Registrant does not receive more than 50% of its revenue from advisory clients
as a result of commissions or other compensation for the sale of insurance products
the Registrant recommends to its clients.
4. The Registrant and its representatives may receive continuing commissions for the
sale of an insurance product.
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The Registrant’s clients shall generally include individuals, business entities, trusts, and estates. Registrant
may charge a lesser investment advisory fee, charge a flat fee, or waive its fee entirely, or provide additional
services based upon certain criteria (i.e. anticipated future earning capacity, anticipated future additional
assets, dollar amount of assets to be managed, related accounts, account composition, complexity of the
engagement, grandfathered fee schedules, Registrant employees and family members, courtesy accounts,
competition, negotiations with client, etc.). Please Note: As result of the above, similarly situated clients
could pay different fees. In addition, similar advisory services may be available from other investment
advisers for similar or lower fees. ANY QUESTIONS: Registrant’s Chief Compliance Officer, Shane
Haag, remains available to address any questions that a client or prospective client may have regarding
advisory fees.
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A. The Registrant may utilize the following methods of security analysis:
Charting - (analysis performed using patterns to identify current trends and trend
reversals to forecast the direction of prices)
Fundamental - (analysis performed on historical and present data, with the goal of
making financial forecasts)
Technical – (analysis performed on historical and present data, focusing on price
and trade volume, to forecast the direction of prices)
Cyclical – (analysis performed on historical relationships between price and
market trends, to forecast the direction of prices)
The Registrant may utilize the following investment strategies when implementing
investment advice given to clients:
Long Term Purchases (securities held at least a year)
Short Term Purchases (securities sold within a year)
Trading (securities sold within thirty (30) days)
Options (contract for the purchase or sale of a security at a predetermined price
during a specific period of time)
Please Note: Investment Risk. Different types of investments involve varying degrees of
risk, and it should not be assumed that future performance of any specific investment or
investment strategy (including the investments and/or investment strategies recommended
or undertaken by the Registrant) will be profitable or equal any specific performance
level(s).
B. The Registrant’s methods of analysis and investment strategies do not present any
significant or unusual risks.
However, every method of analysis has its own inherent risks. To perform an accurate
market analysis the Registrant must have access to current/new market information. The
Registrant has no control over the dissemination rate of market information; therefore,
unbeknownst to the Registrant, certain analyses may be compiled with outdated market
information, severely limiting the value of the Registrant’s analysis. Furthermore, an
accurate market analysis can only produce a forecast of the direction of market values.
There can be no assurances that a forecasted change in market value will materialize into
actionable and/or profitable investment opportunities.
The Registrant’s primary investment strategies - Long Term Purchases, Short Term
Purchases, and Trading - are fundamental investment strategies. However, every
investment strategy has its own inherent risks and limitations. For example, longer term
investment strategies require a longer investment time period to allow for the strategy to
potentially develop. Shorter term investment strategies require a shorter investment time
period to potentially develop but, as a result of more frequent trading, may incur higher
transactional costs when compared to a longer term investment strategy. Trading, an
investment strategy that requires the purchase and sale of securities within a thirty (30) day
investment time period, involves a very short investment time period but will incur higher
transaction costs when compared to a short term investment strategy and substantially
higher transaction costs than a longer term investment strategy.
In addition to the fundamental investment strategies discussed above, the Registrant may
also implement and/or recommend options transactions. Option transactions have a high
level of inherent risk. (See discussion below).
The use of options transactions as an investment strategy may involve a high level of
inherent risk. Option transactions establish a contract between two parties concerning the
buying or selling of an asset at a predetermined price during a specific period of time.
During the term of the option contract, the buyer of the option gains the right to demand
fulfillment by the seller. Fulfillment may take the form of either selling or purchasing a
security depending upon the nature of the option contract. Generally, the purchase or the
recommendation to purchase an option contract by the Registrant shall be with the intent
of producing income or offsetting/”hedging” a potential market risk in a client’s portfolio.
Please Note: Although the intent of the options-related transactions that may be
implemented by the Registrant is to produce income or hedge against principal risk, certain
of the options-related strategies (i.e. straddles, short positions, etc), may, in and of
themselves, produce principal volatility and/or risk. Thus, a client must be willing to accept
these enhanced volatility and principal risks associated with such strategies. In light of
these enhanced risks, client may direct the Registrant, in writing, not to employ any or all
such strategies for his/her/their/its accounts.
C. Currently, the Registrant primarily allocates client investment assets among various
individual equity (stocks), debt (bonds) and fixed income securities, closed-end mutual
funds, exchange traded funds and preferred stock on a discretionary basis, consistent with
the client’s designated objectives. The Registrant may also engage in option strategies: (1)
writing covered calls (“out of the money” and “in the money”)- to provide portfolio income
and sell/buy at certain prices; (2) buying puts - to help protect the portfolio value against
market decline; and/or (3) option collar – combining a call with a put to hedge selected
price movements.
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A. Neither the Registrant, nor its representatives, are registered or have an application pending
to register, as a broker-dealer or a registered representative of a broker-dealer.
B. Neither the Registrant, nor its representatives, are registered or have an application pending
to register, as a futures commission merchant, commodity pool operator, a commodity
trading advisor, or a representative of the foregoing.
C. Licensed Insurance Producer Agency and Licensed Insurance Agents. The Registrant
is registered as Producer Agency for Accident and Health and Life Insurance by the
Louisiana Department of Insurance. Clients can engage the Registrant and certain of its
representative to purchase insurance products and policies on a commission basis.
Conflict of Interest: The recommendation that a client purchase an insurance commission
product or policy presents a material conflict of interest, as the receipt of commissions
may provide an incentive to recommend insurance products based on commissions
received, rather than on a particular client’s need. No client is under any obligation to
purchase any commission product from the Registrant or any of its representatives. Clients
are reminded that they may purchase insurance products recommended by the Registrant
through other non-affiliated insurance agents and agencies. The Registrant’s Chief
Compliance Officer, Shane Haag, remains available to address any questions that a
client or prospective may have regarding the above conflicts of interest.
D. The Registrant does not receive, directly or indirectly, compensation from investment
advisors that it recommends or selects for its clients.
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Personal Trading
A. The Registrant maintains an investment policy relative to personal securities transactions.
This investment policy is part of Registrant’s overall Code of Ethics, which serves to
establish a standard of business conduct for all of Registrant’s Representatives that is based
upon fundamental principles of openness, integrity, honesty and trust, a copy of which is
available upon request.
In accordance with Section 204A of the Investment Advisers Act of 1940, the Registrant
also maintains and enforces written policies reasonably designed to prevent the misuse of
material non-public information by the Registrant or any person associated with the
Registrant.
B. Neither the Registrant nor any related person of Registrant recommends, buys, or sells for
client accounts, securities in which the Registrant or any related person of Registrant has a
material financial interest.
C. The Registrant and/or representatives of the Registrant may buy or sell securities that are
also recommended to clients. This practice may create a situation where the Registrant
and/or representatives of the Registrant are in a position to materially benefit from the sale
or purchase of those securities. Therefore, this situation creates a potential conflict of
interest. Practices such as “scalping” (i.e., a practice whereby the owner of shares of a
security recommends that security for investment and then immediately sells it at a profit
upon the rise in the market price which follows the recommendation) could take place if
the Registrant did not have adequate policies in place to detect such activities. In addition,
this requirement can help detect insider trading, “front-running” (i.e., personal trades
executed prior to those of the Registrant’s clients) and other potentially abusive practices.
The Registrant has a personal securities transaction policy in place to monitor the personal
securities transactions and securities holdings of each of the Registrant’s “Access Persons”.
The Registrant’s securities transaction policy requires that an Access Person of the
Registrant must provide the Chief Compliance Officer or his/her designee with a written
report of their current securities holdings within ten (10) days after becoming an Access
Person. Additionally, each Access Person must provide the Chief Compliance Officer or
his/her designee with a written report of the Access Person’s current securities holdings at
least once each twelve (12) month period thereafter on a date the Registrant selects;
provided, however that at any time that the Registrant has only one Access Person, he or
she shall not be required to submit any securities report described above.
D. The Registrant and/or representatives of the Registrant may buy or sell securities, at or
around the same time as those securities are recommended to clients. This practice creates
a situation where the Registrant and/or representatives of the Registrant are in a position to
materially benefit from the sale or purchase of those securities. Therefore, this situation
creates a potential conflict of interest. As indicated above in Item 11.C, the Registrant has
a personal securities transaction policy in place to monitor the personal securities
transaction and securities holdings of each of Registrant’s Access Persons.
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In the event that the client requests that Registrant recommend a broker-dealer/custodian for
execution and/or custodial services, Registrant generally recommends that investment Registrant
accounts be maintained at Charles Schwab & Co., Inc. (“Schwab”). Prior to engaging Registrant to
provide investment management services, the client will be required to enter into a formal
Investment Advisory Agreement with Registrant setting forth the terms and conditions under which
Registrant shall advise on the client's assets, and a separate custodial/clearing agreement with each
designated broker-dealer/custodian.
Factors that Registrant considers in recommending Schwab (or any other broker-dealer/custodian
to clients) include historical relationship with Registrant, financial strength, reputation, execution
capabilities, pricing, research, and service. Although the commissions and/or transaction fees paid
by Registrant’s clients shall comply with Registrant’s duty to obtain best execution, a client may
pay a transaction fee that is higher than another qualified broker-dealer might charge to effect the
same transaction where Registrant determines, in good faith, that the transaction fee is reasonable.
In seeking best execution, the determinative factor is not the lowest possible cost, but whether the
transaction represents the best qualitative execution, taking into consideration the full range of a
broker-dealer’s services, including the value of research provided, execution capability,
commission rates, and responsiveness. Accordingly, although Registrant will seek competitive
rates, it may not necessarily obtain the lowest possible commission rates for client account
transactions. The brokerage commissions or transaction fees charged by the designated broker-
dealer/custodian are exclusive of, and in addition to, Registrant’s investment advisory fee.
Non-Soft Dollar Research and Benefits: Although not a material consideration when determining
whether to recommend that a client utilize the services of a particular broker-dealer/custodian,
Registrant can receive from Schwab (or another broker-dealer/custodian, investment manager,
platform or fund sponsor, or vendor) without cost (and/or at a discount) support services and/or
products, certain of which assist Registrant to better monitor and service client accounts maintained
at such institutions. Included within the support services that can be obtained by Registrant may
be investment-related research, pricing information and market data, software and other technology
that provide access to client account data, compliance and/or practice management-related
publications, discounted or gratis consulting services, discounted and/or gratis attendance at
conferences, meetings, and other educational and/or social events, marketing support-including
client events, computer hardware and/or software and/or other products used by Registrant in
furtherance of its investment advisory business operations..
As indicated above, certain of the support services and/or products that may be received may assist
Registrant in managing and administering client accounts. Others do not directly provide such
assistance, but rather assist Registrant to manage and further develop its business enterprise.
Registrant’s clients do not pay more for investment transactions effected and/or assets maintained
at Schwab as a result of this arrangement. There is no corresponding commitment made by
Registrant to Schwab or any other any entity to invest any specific amount or percentage of client
assets in any specific mutual funds, securities or other investment products as result of the above
arrangement.
ANY QUESTIONS: Registrant’s Chief Compliance Officer, Shane Haag, remains
available to address any questions that a client or prospective client may have
regarding the above arrangement and the corresponding conflict of interest presented
by such arrangement.
Directed Brokerage. Registrant recommends that its clients utilize the brokerage and custodial
services provided by Schwab. Registrant generally does not accept directed brokerage
arrangements (when a client requires that account transactions be effected through a specific
broker-dealer). In such client directed arrangements, the client will negotiate terms and
arrangements for their account with that broker-dealer, and Registrant will not seek better execution
services or prices from other broker-dealers or be able to "batch" the client’s transactions for
execution through other broker-dealers with orders for other accounts managed by Registrant As a
result, a client may pay higher commissions or other transaction costs or greater spreads, or receive
less favorable net prices, on transactions for the account than would otherwise be the case. Please
Note: In the event that the client directs Registrant to effect securities transactions for the client’s
accounts through a specific broker-dealer, the client correspondingly acknowledges that such
direction may cause the accounts to incur higher commissions or transaction costs than the accounts
would otherwise incur had the client determined to effect account transactions through alternative
clearing arrangements that may be available through Registrant. Higher transaction costs adversely
impact account performance. Please Also Note: Transactions for directed accounts will generally
be executed following the execution of portfolio transactions for non-directed accounts.
Order Aggregation. Transactions for each client account generally will be effected independently,
unless Registrant decides to purchase or sell the same securities for several clients at approximately
the same time. Registrant may (but is not obligated to) combine or “bunch” such orders to obtain
best execution, to negotiate more favorable commission rates or to allocate equitably among
Registrant’s clients differences in prices and commissions or other transaction costs that might have
been obtained had such orders been placed independently. Under this procedure, transactions will
be averaged as to price and will be allocated among clients in proportion to the purchase and sale
orders placed for each client account on any given day. Registrant shall not receive any additional
compensation or remuneration as a result of such aggregation.
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A. For those clients to whom Registrant provides investment supervisory services, account
reviews are conducted on an ongoing basis by the Registrant's Principals and
representatives. All investment supervisory clients are advised that it remains their
responsibility to advise the Registrant of any changes in their investment objectives and/or
financial situation. All clients (in person, via telephone and/or internet meeting) are
encouraged to review investment advisory issues (to the extent applicable), investment
objectives and account performance with the Registrant on an at least annual basis.
B. The Registrant may conduct account reviews on an other than periodic basis upon the
occurrence of a triggering event, such as a change in client investment objectives and/or
financial situation, market corrections and client request.
C. Clients are provided, at least quarterly, with written transaction confirmation notices and
regular written summary account statements directly from the broker-dealer/custodian
and/or program sponsor for the client accounts. The Registrant may also provide a written
periodic report summarizing account activity and performance.
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A. As indicated at Item 12 above, Registrant can receive from Schwab (and/or others) without
cost (and/or at a discount), support services and/or products. Registrant’s clients do not pay
more for investment transactions effected and/or assets maintained at Schwab as result of
this arrangement. There is no corresponding commitment made by Registrant to Schwab,
or any other entity, to invest any specific amount or percentage of client assets in any
specific mutual funds, securities or other investment products as a result of the above
arrangement. ANY QUESTIONS: Registrant’s Chief Compliance Officer, Shane
Haag, remains available to address any questions that a client or prospective
client may have regarding the above arrangement and the corresponding
conflict of interest presented by such arrangement.
B. The Registrant does not compensate, directly or indirectly, any person, other than its
representatives, for client referrals.
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Registrant shall have the ability to deduct its advisory fee from the client’s Schwab account on a
monthly basis. Clients are provided with written transaction confirmation notices, and a written
summary account statement directly from Schwab, at least quarterly. Please Note: To the extent
that Registrant provides clients with periodic account statements or reports, the client is urged to
compare any statement or report provided by Registrant with the account statements received from
the account custodian. Please Also Note: The account custodian does not verify the accuracy of
Registrant’s advisory fee calculation.
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The client can determine to engage the Registrant to provide investment advisory services
on a discretionary basis. Prior to the Registrant assuming discretionary authority over a
client’s account, the client shall be required to execute an Investment Advisory Agreement,
naming the Registrant as the client’s attorney and agent in fact, granting the Registrant full
authority to buy, sell, or otherwise effect investment transactions involving the assets in
the client’s name found in the discretionary account.
Clients who engage the Registrant on a discretionary basis may, at anytime, impose
restrictions, in writing, on the Registrant’s discretionary authority (i.e. limit the
types/amounts of particular securities purchased for their account, exclude the ability to
purchase securities with an inverse relationship to the market, limit or proscribe the
Registrant’s use of margin, etc.).
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A. The Registrant does not vote client proxies. Clients maintain exclusive responsibility for:
(1) directing the manner in which proxies solicited by issuers of securities owned by the
client shall be voted, and (2) making all elections relative to any mergers, acquisitions,
tender offers, bankruptcy proceedings or other type events pertaining to the client’s
investment assets. The Registrant may provide an opinion about proxies to clients holding
effected securities but the decision and right to vote the proxy is retained by the customer
B. Clients will receive their proxies or other solicitations directly from their custodian. Clients
may contact the Registrant to discuss any questions they may have with a particular
solicitation.
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A. The Registrant does not solicit fees of more than $1,200, per client, six months or more in
advance.
B. The Registrant is unaware of any financial condition that is reasonably likely to impair its
ability to meet its contractual commitments relating to its discretionary authority over
certain client accounts.
C. The Registrant has not been the subject of a bankruptcy petition.
ANY QUESTIONS: The Registrant’s Chief Compliance Officer, Shane Haag,
remains available to address any questions that a client or prospective client may have
regarding the above disclosures and arrangements.
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Open Brochure from SEC website