Code of Ethics, Participation or Interest in Client Transactions and Personal Trading
The Firm’s Code of Ethics establishes ideals for ethical conduct upon fundamental principles of openness, integrity, honesty, and trust. The Firm will provide a copy of our Code of Ethics to any Client or prospective Client upon request.
The Firm’s Code of Ethics covers all supervised persons and it describes its high standard of business conduct, and fiduciary duty to its Clients. The Code of Ethics includes provisions relating to the confidentiality of Client information, a prohibition on insider trading, a prohibition of rumor mongering, restrictions on the acceptance of significant gifts and the reporting of certain gifts and business entertainment items, and personal securities trading procedures, among other things. All supervised persons at the Firm must acknowledge the terms of the Code of Ethics annually, or as amended.
When the Firm recommends brokers or custodians, it will seek broker-dealers who offer competitive commissions costs together with reliable services. A Client’s choice of another broker-dealer is acceptable if proven feasible. The Firm has and continues to recommend Charles Schwab & Co., Inc., a Division of Charles Schwab & Co., Inc. for transaction execution. The Firm recognizes its fiduciary responsibility in negotiating brokerage commissions, assuring best execution practices and assuring adequate investment availability/inventory on behalf of its Clients. The Firm does not receive compensation with respect to execution of trades at Charles Schwab & Co., Inc.
With the use of independent broker-dealers, Clients may incur certain charges imposed by custodians, brokers, third party investment and other third parties such as fees charged by managers, custodial fees, deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions. Mutual funds and exchange traded funds also charge internal management fees, which are disclosed in a fund’s prospectus. Such charges, fees and commissions are exclusive of and in addition to Firm’s fee and it will not receive any portion of these commissions, fees, and costs.
Research and Soft Dollar Benefits
“Soft dollars” are defined as a form of payment investment firms can use to pay for goods and services such as subscriptions or research. When an investment firm gives its business to a particular brokerage firm, the brokerage firm in return can agree to use some of its revenue to pay for these types of services. The Firm does not receive “soft dollars” from any vender, service provider or custodian in exchange for its placement of brokerage services. In the event the Firm receives “soft dollars” it will be used to service all client accounts.
Brokerage for Client Referrals
The Firm does not receive Client referrals or any other incentive from Charles Schwab & Co., Inc.
All Client funds, securities and accounts are held at third-party custodians. The Firm does not take possession of a Client’s securities or funds. However, the Client will be asked to authorize the Firm with the ability to deduct its fees directly from the Client’s Account. This authorization will be to deduct the Firm’s management fee only. When deducting the fee, the Firm will send a billing statement (invoice) to the Client’s Financial Adviser or Client’s custodian that indicates the fee to be withdrawn and how it was calculated from the account. A Client may object to the deduction of the Management fees from the Account by notifying the Firm and/or by notifying Client’s Financial Adviser and Client’s custodian. The Client’s custodian shall also send a quarterly statement indicating the amount of fees withdrawn from the client’s Account. The Firm urges each Client to carefully review such statements.
The Firm’s portfolio management services are discretionary. The discretionary authority is obtained when a Client signs an investment management agreement. The agreement allows the Firm to manage the account through the purchase or sale of securities the Firm has selected, within the tolerance agreed to by the Client, and in the amounts the Firm deems suited to the agreed upon portfolio structure. It also allows the Firm to place each such trade without the Client’s prior approval. However, the Firm does not possess the authority without the Client’s consent to determine the broker or dealer to be used or the commission rates paid. In all cases, however, such discretion is to be exercised in a manner consistent with the stated investment objectives for the particular Client account, and any other investment policies, limitation or restrictions.