DT Investment Partners, LLC (hereinafter, “DTIP”, “Advisor” or the “Firm”) offers the following services as part of its advisory business:
1. Investment Advisory Services:
At January 31, 2020 the Firm had $1,330,799,689 in discretionary assets under
management. The Firm also had non-discretionary assets under management of $ 21,579,992
and total assets under management of $1,352,379,681. Further, the Firm had total assets under
advisement of $2,025,873,413
DTIP is an investment advisor registered with the Securities and Exchange Commission.
As such, DTIP is subject to a fiduciary standard of care. Simply stated, investment
recommendations by DTIP must be in the best interest of its clients and client’s interests always
take precedence to those of DTIP.
Investment Advisory Services DT Investment Partners, LLC is a limited liability company formed under the laws of the State of Delaware. The Firm applied for registration with the Securities and Exchange
Commission as an investment adviser in April 2011. The principal owners of the Firm are
Jonathan Smith, Andrew Zimmerman, and John Blair. DTIP offers advisory services to
individuals, pension and profit sharing plans, trusts, estates, charitable organizations,
corporations and other organizations on a discretionary and non-discretionary basis. DTIP may
act as subadvisor for other Registered Investment Advisors.
The Firm also offers certain independent investment consulting services, primarily to
high net worth clients, providing a forensic investment analysis that delivers independent
analytics in four main areas:
A review of all fees currently incurred including advisory fees, manager fees, security
fees and commissions;
An asset allocation review that assesses whether the portfolio allocation has been
efficient regarding the return for a given level of risk;
An assessment of whether securities/managers are used in an attempt to outperform the
market;
Performance analysis identifying true net of fee performance by other managers and their
appropriate use of benchmarks in determining their performance.
The Firm also offers several ongoing services to consulting clients to maximize their
holistic investment solutions. Services include:
Comprehensive financial planning;
In-depth quarterly performance reviews of all accounts and managers;
Consultation on investment strategy decisions and money manager selection;
Screening and monitoring of low cost basis portfolios to avoid management fees when no
real management is utilized;
Offering an account aggregator that gives clients the ability to understand and manage
their spending and budgeting with a single secure tool;
Due diligence and monitoring of alternative investments such as hedge funds and private
equity investments.
DTIP assists advisory clients in developing an appropriate Investment Policy Statement
for assets under discretionary authority of the Firm. The Policy is based on the client’s
investment goals and objectives and risk tolerances. The Firm provides coordination and
administration of appropriate accounts and related asset transfers. The Investment Policy for
each client receives customized implementation which includes active tax and cost efficient
portfolio management. The client may impose modest restrictions regarding investment in
certain securities.
The Firm provides continuous monitoring and management of the investment vehicles
chosen to implement portfolio strategies. As necessary, client portfolios are rebalanced or
policies and strategies are modified if circumstances or client objectives dictate.
In addition to statements received from qualified custodians, clients may receive
quarterly detailed written reports from DTIP with respect to their investment portfolio. As
requested, clients may receive preliminary tax information (e.g. realized and unrealized
gains/losses, interest and dividends received) to facilitate tax planning.
Prior to engaging DTIP to provide investment advisory services, the client will be
required to enter into an Investment Advisory Agreement with DTIP setting forth the terms and
conditions of the engagement, describing the scope of the services to be provided, and the
portion of the fee, if any, that is due from the client prior to DTIP commencing services.
A client may terminate its investment advisory agreement upon written or verbal notice
to DTIP and is effective upon receipt. Upon termination, fees paid in advance will be prorated
and any unearned portion thereof will be returned to the client. The refund will be calculated
based on the number of days remaining in the billing period after the date of termination. Fees
paid in arrears will be pro-rated and any earned portion thereof will be due to DTIP. The fee will
be calculated based on the number of days during the billing period that the account was
managed before the date of termination.
Advisor will assist clients with appointment of a qualified custodian to hold client funds
and securities. Advisor shall never hold client funds or securities and shall be deemed to have
custody solely because of its authority to deduct fees.
Advisory recommendations are based on the client’s financial situation at the time the
services are provided and are based on financial information disclosed by the client to Advisor.
Clients are advised that certain assumptions may be made with respect to interest and inflation
rates and the use of past trends and performance of the market and economy. Past performance
is in no way an indication of future performance. Further, clients are advised that asset allocation
does not assure profit or protect against loss in declining markets. As the client’s financial
situation, goals, objectives or needs change, the client must notify DTIP promptly.
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Investment Advisory Services Fees – Listed below is the standard fee schedule based on assets
under management for accounts managed by DTIP directly.
Equity and Balanced Accounts:
First $5,000,000 1.45%
Above $5,000,000 Negotiated
Fixed Income Only:
First $10,000,000 .60%
Above $10,000,000 Negotiated
The fees charged are calculated as described above, and are not charged on the basis of a
share of capital gains upon, or capital appreciation of, the funds, or any portion of the funds of an
advisory Client (15U.S.C. 80b-5(a)(1). Fees for accounts managed via a subadvisory
relationship or third party platform will likely vary from the standard fee schedule and are
negotiated directly with the Advisor or third party.
As a general matter, fees are charged on a pro-rata basis quarterly in advance or in
arrears, as mutually agreed upon with the client and based on the closing market value of the
account, including cash and cash equivalents and any accrued income on the last day of the
calendar quarter. Advisor generally receives client permission to have fees deducted
automatically from the qualified custodian account. Clients will be provided with a quarterly
statement from the qualified custodian reflecting the deduction of the advisory fee.
While it is the general policy of DTIP to charge fees to its clients in accordance with the
fee schedules noted above, the fees are subject to negotiation and may vary from these schedules
to reflect circumstances that may apply to a specific client account. For example, fees may differ
from those stated herein because of long-standing relationships, anticipated client additions to
assets under management, employee related accounts, changing market conditions, or for other
reasons.
Fees for consulting services are negotiated but paid as a flat fixed fee. The minimum fee
for a one-time assessment is $5,000 but the fee may be higher based upon the total assets of the
client. The Firm negotiates fees with clients who elect a recurring consulting relationship and the
fee may also include active management of a portion of the consulting assets.
In the event the client provides notice of termination to the Advisor, the Advisor will
prorate fees earned through the termination date and promptly refund any unearned fees to the
Client.
Additional Information Concerning Fees Advice offered by Advisor will likely involve investments in stocks, bonds, Exchange
Traded Funds (ETFs), Master Limited Partnerships (“MLPS”), hedge funds, and mutual funds.
Clients are hereby advised that all fees paid to Advisor for investment advisory services are
separate and distinct from the fees and expenses charged by ETF’s, hedge funds and mutual
funds (described in each fund prospectus) to their shareholders. These fees will include, but are
not limited to, a management fee, upfront sales charges and other fund expenses. Further, there
will likely be transaction charges involved with purchasing or selling of securities. Client will
incur and Advisor does not share in any portion of the additional brokerage fees/transaction
charges or custody fees imposed by the custodian holding the client funds or securities. The
client should review all fees charged by money market funds, Advisor and others to fully
understand the total amount of fees to be paid by the client.
A client could invest in a mutual fund or ETFs directly without the services of the
Advisor. In that case, the client would not receive the services provided by Advisor which are
designed, among other things, to assist the client in determining which mutual funds or ETFs are
most appropriate to the client’s financial condition, goals and objectives. Accordingly, the
clients should review both the fees charged by mutual funds or ETFs and the fees charged by
Advisor to fully understand the total amount of fees to be paid by the clients and to thereby
evaluate the advisory services that are provided. Further information regarding brokerage can be
found in Item 12.
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DTIP provides investment advice to individuals, pension and profits sharing plans, trusts, estates or charitable organizations, municipalities, corporations and clients of introducing
financial consultants, institutions or broker-dealers (“Sponsors”). In accounts introduced to
DTIP by a Sponsor, the client enters into agreements directly with both DTIP and the Sponsor, or
enters into an agreement solely with Sponsor or another entity that has an agreement with the
Sponsor.
DTIP currently has no contractual minimum investment size for clients who enter into
direct agreement with DTIP. The Firm has established minimum investment size of $100,000
for equities and $250,000 for fixed income with certain third party institutions who elect DTIP as
a subadviser.
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LOSS DTIP employs an active management style that seeks to provide clients with attractive risk-adjusted returns while balancing principal growth with income requirements in various
market environments. The Firm strives for low volatility and consistent returns by stressing
diversification and finding the optimal mix of asset classes for a client’s risk profile and return
objectives. The Firm recognizes the balance between income and growth is different for every
client. Accordingly, the Firm offers a number of different investment strategies to correlate with
an investor’s tolerance for risk and investment objectives.
DTIP utilizes fundamental and technical analysis to tactically shift between asset classes
to capture the benefits from both fundamental valuation changes and price momentum. The main
sources of information used by the Advisor are financial magazines and newspapers, internet
articles and news reports, research material prepared by others, corporate rating services, annual
reports and filings with the Securities and Exchange Commission, as well as timing services and
company press releases.
The company may invest in equities (foreign and domestic, exchange listed or over-the-
counter), warrants, commercial paper, certificates of deposit, exchange traded funds (“ETFs”),
real estate investment trusts (“REITS”), Master Limited Partnerships (“MLPS”), mutual fund
shares and a variety of fixed income securities including US Treasuries, agencies, mortgage
backed securities, corporate debt and municipal debt.
Implementation of investment strategies may include long term purchases, short term
(less than a year) purchases and trading securities (sold within 30 days). Trading activity is
driven by the Firm’s regular review of proprietary asset allocation models and “buy/sell” signals
associated with performance of various asset classes as a result of fundamental and technical
analysis. More frequent trading could result in a client incurring additional brokerage
commissions or fees that will reduce net investment performance.
After reviewing a client’s investment objectives and tolerance for risk, clients execute an
Investment Policy Statement that selects one of the following investment strategies:
1.
Ultra Conservative Growth and Income: Seeks high current income with very modest
growth of capital. While income and capital preservation are the primary focus, the
portfolio will seek to provide growth of capital (excluding current income) equal to
inflation, as measured by the Core Consumer Price Index – “CPI”. This portfolio will
generally have a high weighting to cash and traditional fixed income and a low weighting
to equity related strategies. Equity investments will not exceed 30% of the portfolio. The
Ultra Conservative investment objective is equivalent to a very low risk profile.
2.
Ultra Conservative Plus Growth and Income: Seeks high current income with only modest
growth of capital. While income and capital preservation are the primary focus, the
portfolio will seek to provide growth of capital (excluding current income) equal to
inflation (core CPI). This portfolio will generally have more fixed income and cash than
risk based assets. Risk based assets will not exceed 50% of the portfolio. Ultra
Conservative Plus Investment objective is designed for an investor with a low risk profile
with a limited need for growth.
3.
Conservative Growth and Income: Seeks high current income with modest growth of
capital. While income and capital preservation are the primary focus, the portfolio will
seek to provide growth of capital (excluding current income) equal to inflation (core CPI).
This portfolio will generally have a high weighting of cash and traditional fixed income to
equity and alternative related strategies. Equity and alternative investments however will
not exceed 70% of the portfolio. The Conservative investment objective is equivalent to a
low risk profile.
4.
Moderate Growth and Income: Seeks growth of capital as well as current income. The
portfolio will invest across diversified strategies specializing in fixed income, equity, real
assets, and private investments with modest overweight of equity and alternative
investments to fixed income related strategies. Equities and alternative investments
however will not exceed 80% of the portfolio. The Moderate investment objective is
equivalent to a balanced, medium risk profile.
5.
Aggressive Growth: Seeks maximum growth of capital. This portfolio will generally
utilize a high weighting to equity and alternative related strategies and a low weighting to
fixed income related strategies. Equity and alternative investments will not exceed 90% of
the portfolio. The Aggressive investment objective is equivalent to a high risk profile.
6.
Dividend Focus: Seeks to provide stable consistent and relatively higher current income.
The Portfolio is built around a long-term strategic, U.S. Large Cap stock sector allocation
that typically includes investments in select sectors of the S&P 500. The Portfolio is
mainly invested in common stock, preferred stocks, master limited partnerships and bonds
that are appropriate proxies for the above mentioned sectors. The Dividend Focus
Investment objective is designed for an investor with a desire for income and a higher
tolerance for risk.
7.
Fixed Income Only: Seeks to preserve principal value, maintain adequate liquidity to meet
client demands, and generate current income. This portfolio will generally utilize
investment grade cash and fixed income securities such as US Treasuries, agencies,
municipal bonds, agency mortgage-backed securities and corporate debt. The Fixed
Income Only investment objective is equivalent to an ultra-low risk profile.
There are a number of risks associated with the various strategies offered by the Advisor.
Generally, clients are subject to stock market risk, which is the chance that stock prices overall
will decline. Stock markets tend to move in cycles, with periods of rising prices and falling
prices. Such risk may vary based on the percentage of stocks owned in a given strategy.
There are risks involved with investing in ETFs, including possible loss of money. Index
based ETFs are not actively managed. Actively managed ETFs do not necessarily seek to
replicate the performance of a specified index. Both index-based and actively managed ETFs are
subject to risks similar to stocks including those related to short selling and margin maintenance.
Bonds are subject to interest rate risk, which is the chance that bond prices overall will
decline because of rising interest rates. Interest rate risk will vary based on the percentage of
bonds owned in a given strategy. In addition, long-term bonds have a higher interest rate risk
and are much more sensitive to interest rate changes than are the prices of short-term bonds.
Bonds are also subject to credit risk, the chance that a bond issuer will fail to pay interest and
principal in a timely manner or, that negative perceptions of the issuer’s ability to make such
payments will cause the price of that bond to decline. Finally, some bonds may be subject to call
risk. This is the chance that in a declining interest rate environment the issuer of a bond will
repay or call securities with higher coupons before their maturity dates.
In addition, investments in specific asset classes entail different investment risks. For
example, small cap stocks tend to be more volatile than large or mid-cap stocks. International
stocks and emerging markets include risks due to currency fluctuations, foreign taxes, political
instability and possibility of illiquid markets. Real estate investing includes risks such as
declines in the value of real estate, changing economic conditions, tax laws or property taxes.
Commodities’ investing is also highly volatile and subject to changing economic conditions and
the vagaries of speculators among other risks. Market Neutral and Long/Short strategies entail
potential liquidity risks and frequently higher fees.
Finally, the strategic or tactical asset allocations employed by the Advisor do not
assure profit or protect against loss in declining markets.
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Neither DTIP nor any of its partners, officers or employees has been involved in any legal or disciplinary action with any federal or state statutory or regulatory agency. Likewise,
neither the Firm nor its partners, officer or employees have ever been subject to disciplinary
action by self-regulatory organizations.
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DTIP is the LLC Manager of Independent Wealth Partners, LLC, a Delaware series
limited liability company. At December 31, 2019 there was one series member of Independent
Wealth Partners LLC, Quinn Wealth Advisors (QWA). DTIP has a 10% ownership interest in
this series member. Quinn Wealth Advisors is also registered as an investment adviser with the
Securities and Exchange Commission and shares common offices with DTIP. Quinn Wealth
Advisors has also executed a subadvisory agreement for investment services from DTIP.
CODE OF ETHICS, PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS AND PERSONAL TRADING Advisor’s employees may buy or sell for themselves securities that they also recommend to
clients. This can create an inherent conflict of interest. DTIP has addressed this potential
conflict in its Code of Ethics. The Code of Ethics defines certain policies adopted by the Advisor
that relate to personal trading and business practices of employees to ensure that the Advisor
resolves any such conflicts in favor of Clients.
Code of Ethics
DTIP has adopted a Code of Ethics based on the principle that all Advisory representatives
and certain other persons of DTIP have a fiduciary duty to place the interest of the client ahead
of their own and DTIP’s. This Code of Ethics applies to all “access persons”. “Access persons”
are all employees, directors, officers, partners or members of DTIP who:
Have access to nonpublic information regarding advisory clients’ purchases or sales of
securities.
Are involved in making securities recommendations to advisory clients.
Have access to nonpublic recommendations or portfolio holdings of clients.
Access persons must avoid activities, interests, and relationships that might interfere with
making decisions in the best interests of DTIP’s advisory clients. DTIP has established the
following restrictions in order to ensure its fiduciary responsibilities:
DTIP emphasizes the unrestricted right of the client to specify investment objectives,
guidelines, and/or conditions on the overall management of their account. DTIP’s
standard investment process begins with reviewing applicable state statutes, investment
policy, and permitted investment language provided by the client.
Access persons or their immediate family members shall not buy or sell securities for
their personal portfolio(s) where their decision is derived in whole or in part, by reason of
the associated person’s employment, unless the information is also available to the
investing public on reasonable inquiry. No associated person of the Firm shall prefer his
or her own interest to that of the advisory client.
DTIP’s and its access persons generally may not purchase and sell securities being
considered for, or held by client accounts without pre-clearance by the Firm’s
Compliance Officer. Moreover, if the security is a thinly traded security (with average
daily volume below 100,000 shares per day) investment personnel may be subject to a
blackout period from trading in such securities.
DTIP or individuals associated with the Firm may buy or sell for their personal accounts
investment products identical to those recommended to clients. It is the expressed policy
of DTIP that no person employed by the Firm may enter an order to purchase or sell any
security prior to a transaction being implemented for an advisory account (in accordance
with standard “front running” guidelines), and therefore, preventing such employees from
benefiting from transactions placed on behalf of advisory accounts. Further, employees
may sign investment management agreements with the Company and elect similar
investment strategies as those available to clients. When effecting transactions for
various investment strategies, DTIP ensures that no employee accounts receive
executions on a basis more favorable than the executions for Clients.
DTIP and its employees generally may not participate in private placements or initial
public offerings (IPOs) without pre-clearance from the Firm's Compliance Officer.
The Firm requires that all individuals must act in accordance with all applicable federal
and state regulations governing registered investment advisory practices.
Records will be maintained of all securities bought or sold by the Firm, access persons of
the Firm, and related entities. The Chief Compliance Officer, will review these records on
a regular basis.
Any individual not in observance of the above may be subject to termination.
In addition, DTIP maintains additional policies with respect to confidentiality, receipt of gifts by
employees, prohibitions regarding solicitation of gifts and prohibitions regarding “pay to play”
practices as part of this Code of Ethics in order to ensure the fiduciary duty of placing client’s
interests ahead of DTIP’s or its employees. A copy of DTIP’s Code of Ethics policy is available
to clients upon request.
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INVESTMENT OR BROKERAGE DISCRETION
Pursuant to and subject to limitations of the agreements under which DTIP provides investment
management services, DTIP generally has authority to determine, without obtaining specific
client consent, the securities to be bought and sold for client accounts, including the amounts of
such securities, price at which to transact and to negotiate transaction costs. Such authority may
be subject to client directions relating to trade executions.
SUGGESTION OF BROKERS TO CLIENTS
DTIP is given trading authorization by its clients to purchase or sell certain types of
securities, within specified limitations, as agreed upon from time to time with its clients. The
broker-dealer to be used may or may not be specified by the client. Where the broker-dealer is
the custodian, DTIP may or may not execute a trade away from the broker. DTIP will suggest
broker-dealers and/or “qualified custodians” such as Charles Schwab or TD Ameritrade to clients
who request such recommendations. Clients have the final choice as to a selection. In selecting
or recommending broker-dealers, DTIP does not consider client referrals received from broker-
dealers.
It is DTIP’s policy to seek best execution when executing transactions on behalf of
clients. Best execution consists of obtaining the most favorable result, considering the full range
of services provided, under the prevailing market conditions. Best execution is not necessarily
measured by the circumstances surrounding a single transaction but may be measured over time
through multiple transactions. In selecting a specific broker/dealer to execute a transaction,
DTIP may consider any one or more of the following factors, based on the specific
circumstances of the transaction: size of the order, price of the security, execution difficulty,
liquidity of the security, market and exchange conditions, macro-economic conditions, current
news events, order flow information, speed of execution desired, broker willingness to commit
capital and minimize trading costs associated with implementing an investment decision and
commission cost. When DTIP decides to purchase or sell the same security for multiple clients,
DTIP may, consistent with its obligation to seek best execution, aggregate client orders in an
effort to achieve a timely, equitable or efficient execution. DTIP has adopted trade rotation
policies designed to ensure that trade orders for the purchase or sale of securities are
communicated in a manner and sequence that is fair and equitable for all clients. The process
generally includes the use by the investment team of a trade rotation list that determines the
sequence in which trade orders are communicated to broker-dealers. From time to time, clients
may instruct DTIP to direct brokerage to particular broker-dealers. In such circumstances, DTIP
will seek to achieve best execution of securities trades; however, there is no guarantee that best
execution can be achieved under such circumstances. As such, these clients may pay higher
commission costs, transactions costs or other fees than other DTIP clients who have not given
such an instruction.
Firms may charge commissions (ticket charges) for executing Advisor’s transactions.
With respect to investment advisory accounts, Advisor does not receive any part of these
separate charges and transaction costs are not absorbed by Advisor, as described earlier.
Advisor participates in the institutional advisor program (“the Program”) offered by TD
Ameritrade Institutional. TD Ameritrade Institutional is a division of TD Ameritrade, Inc.,
member FINRA/SIPC/NFA (“TD Ameritrade”), an unaffiliated SEC- registered broker-dealer
and FINRA member. TD Ameritrade offers to independent investment advisors services which
include custody of securities, trade execution, clearance and settlement of transactions. Advisor
receives some benefits from TD Ameritrade through its participation in the Program. (Please see
the disclosure under “Client Referrals and Other Compensation” below.)
Advisor also participates in Schwab Advisor Services, a division of Charles Schwab Co.
that provides services to independent investment advisory Firms like DTIP. Schwab’s
institutional brokerage services include access to a broad range of investment products,
execution of securities transactions, and custody of client assets. In addition, Advisor also
receives some benefits that may not directly benefit you and some services that generally benefit
only the Advisor. Again, see “Client Referrals and Other Compensation” below for additional
details regarding these benefits.
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The Firm formally reviews all accounts internally at least on an annual basis. More frequent
reviews may occur due to the client’s individual circumstances, economic conditions, or general
factors affecting the financial markets. The Advisor attempts to schedule meetings with clients
at least on an annual basis or more frequently if desired by the client or if circumstances warrant.
DTIP encourages each client to review the statements they receive directly from their custodian
and to compare the reports with those they may receive from DTIP. They are further directed to
contact their DTIP relationship manager should they have any questions concerning the
information provided by the custodian or DTIP. Clients from third party sponsors or accounts
from subadvisory agreements receive statements directly from the sponsor or advisor. At the
request of the sponsor or adviser, DTIP can assist in providing statements.
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As disclosed under “Brokerage Practices”, Advisor participates in TD AMERITRADE's
Institutional customer program and Advisor may recommend TD AMERITRADE to clients for
custody and brokerage services. There is no direct link between Advisor's participation in the
program and the investment advice it gives to its clients, although Advisor receives economic
benefits through its participation in the program that are typically not available to
TD AMERITRADE retail investors. These benefits include the following products and services
(provided without cost or at a discount): receipt of duplicate client statements and confirmations;
research related products and tools; consulting services; access to a trading desk serving advisor
participants; access to block trading (which provides the ability to aggregate securities
transactions for execution and then allocate the appropriate shares to client accounts); the ability
to have advisory fees deducted directly from client accounts; access to an electronic
communications network for client order entry and account information; access to mutual funds
with no transaction fees and to certain institutional money managers; and discounts on
compliance, marketing, research, technology, and practice management products or services
provided to Advisor by third party vendors. TD AMERITRADE may also have paid for business
consulting and professional services received by Advisor’s related persons. Some of the products
and services made available by TD AMERITRADE through the program may benefit Advisor
but may not benefit its client accounts. These products or services may assist Advisor in
managing and administering client accounts, including accounts not maintained at
TD AMERITRADE. Other services made available by TD AMERITRADE are intended to help
Advisor manage and further develop its business enterprise. The benefits received by Advisor or
its personnel through participation in the program do not depend on the amount of brokerage
transactions directed to TD AMERITRADE. As part of its fiduciary duties to clients, the Firm
endeavors at all times to put the interests of its clients first. Clients should be aware, however,
that the receipt of economic benefits by Advisor or its related persons in and of itself creates a
potential conflict of interest and may indirectly influence Advisor's choice or recommendation of
TD AMERITRADE for custody and brokerage services.
Further, the Advisor also participates in Schwab Advisor Services, a division of Charles Schwab
Co. They provide us and our clients with access to its institutional brokerage – trading, custody,
reporting and related services-many of which are not typically available to Schwab retail
customers. Schwab also makes available various support services. Some of these services help
us manage and grow our business. Schwab’s institutional brokerage services include access to a
broad range of investment products, execution of securities transactions, and custody of client
assets. The investment products available through Schwab include some to which we might not
otherwise have access or that would require a significantly higher minimum initial investment by
our clients. Schwab’s services as described above generally benefit all Schwab clients.
Schwab also makes available to us other products and services that may benefit the Advisor but
not directly benefit the client. Such products and services assist us in managing and
administering our clients’ accounts. They include investment research, both Schwab’s and that
of third parties. We may use this research to service all or some substantial number of our
clients’ accounts, including accounts not maintained at Schwab. In addition to investment
research, Schwab also makes available software and other technology that
provide access to client account data (such as duplicate trade confirmations and account
statements);
facilitate trade execution and allocate aggregated trade orders for multiple client
accounts;
provide pricing and other market data;
facilitate payment of our fees from clients’ accounts; and
assist with back-office functions, recordkeeping and client reporting
Schwab may also offer services that generally only benefit the Advisor designed to help us
manage and develop our business enterprise. These services include:
education conferences and events
technology, compliance, legal and business consulting;
publications and conferences on practice management and business succession; and
access to employee benefits providers, human capital consultants and insurance
providers.
Schwab may provide some of these services itself. In other cases, it will arrange for third-party
vendors to provide the services to us. Schwab may also discount or waive its fees for some of
these services or pay all or a part of a third party’s fees. Schwab may also provide us with other
benefits such as occasional business entertainment of our personnel.
USE OF UNAFFILIATED SOLICITORS
The Advisor may pay referral fees (non-commission) to independent solicitors (non-employee
representatives) for the referral of their Clients to the Adviser in accordance with Rule 206 (4)-3
of the Investment Advisers Act of 1940. Advisor’s solicitation fees will not result in higher costs
to the client. In this regard, the Advisor will maintain Solicitors Agreements in compliance with
Rule 206 (4)-3 of the Investment Advisers Act of 1940 and applicable state and federal laws.
All clients referred by Solicitors to the Advisor will be given full written disclosure describing
the terms and fee arrangements between the Advisor and its Solicitor(s).
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Rule 206 (4) – 2 of the Investment Advisers Act of 1940 addresses custody of funds or securities
of clients by investment advisers. Consistent with the rule, DTIP requires that clients’ funds or
securities must be retained with a “qualified custodian” who provides at least quarterly
statements, either printed or electronically, to clients. In addition, DTIP assumes responsibility
for ensuring that it has a reasonable belief that such statements have been delivered.
In addition to statements provided by the qualified custodian, DTIP may provide quarterly
reports and commentary to clients. Such reports include additions and withdrawals to the
account, portfolio market value, performance returns and advisory fees paid to DTIP In the
event of discrepancies or questions; the client is urged to contact the Advisor.
DTIP directly debits client accounts to collect fees. While this constitutes “custody” as defined
in the Investment Advisers Act, advisers like DTIP who have custody for this reason only are
exempt from some additional requirements imposed on advisers who take physical custody of
cash or securities from clients. Accordingly, DTIP exercises care and has enacted policies to
avoid taking receipt inadvertently of client funds or securities. DTIP will on occasion forward
checks to the client’s custodian of record if requested bv the client and if the check is made
payable to the custodian.
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DTIP manages accounts primarily on a discretionary basis with full authority to make purchase
and sale decision for client accounts. At a client’s request, DTIP may also enter into non-
discretionary agreements that require client consultation/approval prior to enacting purchase or
sale of securities for the account. DTIP’s Investment Policy Statements also allow the clients to
enumerate any specific exclusions, restrictions or special considerations in managing either
discretionary or non-discretionary accounts.
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Unless the Client directs otherwise in writing, the Client shall direct the manner in which proxies
solicited by issuers of securities beneficially owned by the Client shall be voted. Advisor is
authorized to instruct the custodian to forward to Clients copies of all proxies and shareholder
communications relating to the Assets.
In cases in which Advisor has proxy voting authority for securities held by its advisory Clients,
Advisor will ensure securities are voted for the exclusive benefit, and in the best economic interest,
of those Clients and their beneficiaries, subject to any restrictions or directions from a client. Such
voting responsibilities will be exercised in a manner that is consistent with the general antifraud
provisions of the Advisers Act, and the Proxy Voting rule, Rule 206(4)-6, as well as with Advisor’s
fiduciary duties under federal and state law to act in the best interests of its Clients.
DTIP has engaged the services of Institutional Shareholder Services (“ISS”), a third-party proxy
voting service provider, to assist in the proxy voting process. DTIP has appointed a Proxy
Administrator to ensure that ISS receives proxy voting materials directly from the broker-
dealers/custodians.
If DTIP’s Proxy Administrator determines that they or DTIP is facing a material conflict of interest
in voting your proxy (e.g. an employee of DTIP may personally benefit if the proxy is voted in a
certain direction), our procedures provide for a Proxy Voting Committee to convene and to
determine the appropriate vote. Decisions of the Committee must be unanimous. If a unanimous
decision cannot be reached by the Committee, a competent third party will be engaged, at our
expense, who will determine the vote that will maximize shareholder value. The third party’s
decision is binding.
If “Class Action” documents are received by DTIP for a private client, DTIP will forward such
documents to the client to enable the client to file the “Class Action” at the client’s discretion. The
decision of whether to participate in the recovery or opt-out may be a legal one that DTIP is not
qualified to make for the Client. Therefore, DTIP will not file “Class Actions” on behalf of any
client. The decision to participate in the “Class Action” is entirely up to the Client and the
collection of information necessary to participate in the “Class Action” must be coordinated by the
Client.
Our complete proxy voting policy and procedures are available for your review. In addition, our
complete proxy voting record is also available to our clients, and only our clients. Please contact
DTIP if you have any questions or if you would like to review either of these documents.
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DTIP does not require or solicit prepayment of client fees six months or more in advance. DTIP
believes that its financial condition is sound and not likely to impair the Advisor’s ability to meet
contractual commitments to clients.
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