General Information & Procedures
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1 Written Procedures - General Information
The client’s best interests are the firm and all associated personnel’s primary concern. We will adhere to our fiduciary duty of loyalty, honesty, and good faith to act in the best interest of each of our clients. We may achieve this duty through avoidance of conflicts of interest or impropriety, or their appearance, and by fully disclosing all material facts concerning any conflict that may arise with respect to any client.
This manual includes the firm’s Code of Ethics, oversight procedures, and policies which should be used as a reference for daily responsibilities. It is intended to assist personnel in ensuring compliance with applicable rules and regulations of the State of Utah and any applicable jurisdiction in which the firm and its representatives conduct business. Further, all personnel must be made aware that each jurisdiction in which they provide advisory services may have conflicting rules, and all personnel must ensure they adhere to that jurisdiction’s statute.
The firm requires continual awareness of these regulations, as well as the facts and circumstances of each client recommendation. Employees will be familiar with our policies and any supplemental information incorporated within the appendices. It is a necessity for all staff to adhere to the policies and procedures identified in this manual, and that supervisors supply the necessary guidance.
1.1 Use of the Manual
This manual is deemed confidential and not available for public use. It is not to be disseminated or modified in any manner without the written consent of the Chief Compliance Officer. Only the firm’s Code of Ethics extract noted within the appendices may be provided upon request to outside entities without prior approval.
This manual will be maintained in electronic format. The assigned principal will ensure the manual is reviewed on an annual or more frequent basis. Revised versions will be periodically provided and requiring previous copies to be destroyed. The Chief Compliance Officer will archive unredacted past editions for the required record retention period.
See the Glossary of Terms for definitions referenced in this section.
1.2 Application of Firm’s Code of Ethics
The firm’s Code of Ethics will apply to each associated person (AP) and they will receive a copy of our Code of Ethics upon hiring, and any updates as they occur. The Chief Compliance Officer will maintain the then current copy of the firm’s Code of Ethics, as well as acknowledgements by each AP as to their receipt and agreement to abide by the our Code of Ethics, as amended.
1.3 Business Description
The firm offers advisory services to its clients as outlined in its current Form ADV. The specific advisory services and fees made available and selected will be noted in the client’s agreement. The CCO will ensure that Form ADV is kept current, and the firm’s available services and fees are accurately reflected. Any changes to firm services and/or fee types will be made promptly, and an updated copy filed and disseminated as required.
1.4 Activities Not Described Elsewhere
The firm does not allow or participate in the following activities and, therefore, no further detail or subsequent requirements will be described in this manual involving:
- Agency Cross Transactions
- Custody of Assets
- Directed Brokerage
- Manage Unlisted Pooled Investments
- Proprietary Account Trading
- Proxy Voting
- Rebating of Fees
- Solicitor Engagements
- Wrap Program Sponsor
1.5 Branch Office Locations
Only the offices listed within Form ADV Part 1 and Schedule D of Part 1 are to be used by the firm. Should the firm or any of its associates desire to operate from a branch office location other than that currently filed, the CCO will determine whether the location(s) needs to be listed on Form ADV and any necessary state filings made (i.e., Form BR or direct filing requirement) per jurisdictional statute. No less than annually, the CCO will conduct a review of each branch office location used or held out to the public by the firm. The review will be reduced to a written report and will be retained per firm policy with regard to its books and records obligations.
1.6 Regulatory Jurisdiction
If the firm is providing investment advisory services to individuals who reside in states other than its domiciled state, it will also be subject to statutes of each jurisdiction. Certain states allow a “de minimis” number of advisory clients in their state before registration is required (typically five or fewer clients each year) but it must be confirmed prior to offering advisory services to such state residents. The CCO will be responsible for ensuring the firm is properly registered per statute in each jurisdiction.
1.7 Determining Assets Under Management
When the firm calculates its reportable assets under management, it will first determine whether it provides “continuous and regular supervisory” services for each account or portfolio. The following guidelines will be considered:
Client Contract: If the client contract states it will provide ongoing management or monitoring services, it implies the firm provides these services for accounts.
Compensation: If the firm is compensated based on the average value of the client’s assets it manages over a specified period, then the firm provides continuous and regular supervisory or management services for the account or portfolio.
Account Authority: The firm may be deemed continuous and regular supervisory or management services to an account or portfolio if the firm generally:
- has discretionary authority to allocate client assets among various securities, including mutual funds;
- does not have discretionary authority but provides the same allocation services and satisfies the criteria set forth in the question regarding the client agreement regarding the determination of whether it provides continuous and regular supervision and management (i.e., implied activity);
- allocates assets among other managers (i.e., “manager of managers”), but only if it has discretionary authority to hire and fire managers and reallocate assets among them.
The firm believes it is not deemed to have provided continuous and regular supervisory services for an account or portfolio if it generally:
- provides only impersonal investment advice (i.e., market newsletters);
- provides market timing recommendations (i.e., to buy or sell) but has no ongoing management responsibilities;
- provides only an initial asset allocation without continuous and regular monitoring and reallocation (i.e., periodic investment consultation services); or
- provides advice on an intermittent or periodic basis, such as upon client request, in response to a market event, or on a specific date (i.e., review and adjusted quarterly).
If the firm were to be compensated based upon the time spent (i.e., hourly fees) with a client during a client visit or the firm is paid a retainer for developing a financial plan, it would suggest that it does not provide continuous and supervisory or management services for the account or portfolio.
The valuation of AUM may include accounts or portfolio values for those that qualify as “securities portfolios.” An account or portfolio is considered a “securities portfolio” if at least 50% of the total value of the account and/or portfolio consists of securities or cash and “cash equivalents.”
For reference, if a portfolio is (a) considered a “securities portfolio,” and (b) receives “continuous and regular supervision and management,” the entire amount may be included in the calculation of the firm’s total assets under management.
The firm will include associated and related persons’ assets in this calculation if they are managed by the firm at its custodian of record.
The CCO will determine assets under management based on the current market value of the assets within 90 days prior to the date of filing of its Form ADV (or any earlier amendment). The firm may determine market value using the same method it uses to report account values to its clients.
1.8 Appointment of Chief Compliance Officer
The principal noted in the appendices serves as Chief Compliance Officer (CCO) and is deemed by the firm to be an individual with adequate experience and understanding of the rules and regulations that apply to a registered investment adviser firm. Certain functions may be outsourced to legal counsel, industry consultants, or other supporting third parties, however, they ultimately remain the responsibility of the Principal(s) as delineated. Any change of the firm’s CCO must be promptly reported in writing and/or via Form ADV amendment, preferably within 10 days of occurrence and not later than 30 days.
1.9 Segregation of Duties
The ability to allow for segregation of all duties is infeasible given the current business and staffing model and, therefore, is recognized as a conflict of interest. The CCO will ensure oversight responsibilities and timely, accurate recordkeeping, as well as outsourcing certain functions where able, to assist in mitigating known or perceived conflicts. Consideration may be made in identifying conflicting responsibilities to clients, where applicable, via pertinent section(s) of the firm’s current advisory brochure.