* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download Responsible Asset Management
Survey
Document related concepts
Algorithmic trading wikipedia , lookup
Early history of private equity wikipedia , lookup
Leveraged buyout wikipedia , lookup
International investment agreement wikipedia , lookup
Mark-to-market accounting wikipedia , lookup
Socially responsible investing wikipedia , lookup
Auction rate security wikipedia , lookup
Stock trader wikipedia , lookup
Hedge (finance) wikipedia , lookup
Security (finance) wikipedia , lookup
Environmental, social and corporate governance wikipedia , lookup
Short (finance) wikipedia , lookup
History of investment banking in the United States wikipedia , lookup
Securities fraud wikipedia , lookup
Transcript
Part 2A of Form ADV: Firm Brochure June 21, 2012 Responsible Asset Management 2595 East 3300 South, Suite 320 Salt Lake City, UT 84109 Phone: 801-484-7787 / Fax: 801-484-5571 Website: www.ramtrf.com / Email: [email protected] This Brochure provides information about the qualifications and business practices of Responsible Asset Management, LLC. If you have any questions about the contents of this brochure, please contact us using one of the methods listed above or Jeffrey E. Cline, Chief Compliance Officer, at [email protected]. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority. Registration is mandatory for all persons meeting the definition of investment advisor and does not imply a certain level of skill or training. Additional information about Responsible Asset Management, LLC. is available on the United States Securities and Exchange Commission website at www.adviserinfo.sec.gov. The IARD/CRD number for Responsible Asset Management, LLC. is 123398. Item 2 - Material Changes Summary of Material Changes: This Brochure (replacing the previous Form ADV Part 2A) is now required by the United States Securities and Exchange Commission and state securities authorities. There have been material changes to this Brochure since the previous version dated, May 25, 2011. Item 4, Brian J. Kahn has joined Responsible Asset Management as an Investment Advisor Representative (IA). Item 5, revised Fee Schedule. Item 6, Performance-Based Fees are no longer offered. Item 7, revised minimum account size and maximum fee. Item 10, Traverse Ridge Funds, LLC has become the General Partner of Owl Partners, LP and Brian J. Kahn is applying for the S3 securities license. Item 19(A) Brian J. Kahn is an Investment Advisor Representative. Item 19(E), qualifications for the CFA charter designation. In the future, this section will continue to discuss any material changes that are made to the Brochure. Delivery: Responsible Asset Management will review this Brochure on an annual basis and deliver any updates of Material Changes within 120 days of the close of business of our fiscal year end. 1 Item 3 - Table of Contents Item 1 Cover Page 1 Item 2 Material Changes 1 Item 3 Table of Contents 2 Item 4 Advisory Business 3 Item 5 Fees and Compensation 4 Item 6 Performance Based Fees and Side-by-Side Management 5 Item 7 Types of Clients and Account Minimums 6 Item 8 Methods of Analysis, Investment Selection and Risk of Loss 6 Item 9 Disciplinary Information 10 Item 10 Other Financial Industry Activities and Affiliations 11 Item 11 12 Item 12 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Brokerage Practices Item 13 Review of Accounts and Reports on Accounts 15 Item 14 Client Referrals and Other Compensation 15 Item 15 Custody 16 Item 16 Investment Discretion 16 Item 17 Voting Client Securities 16 Item 18 Financial Information 17 Item 19 Requirements for State Registered Advisers 17 2 14 Item 4 - Advisory Business Responsible Asset Management, LLC. (RAM) was founded by Jeffrey E. Cline (Mr. Cline) in October 1997. RAM is a Utah limited liability company, of which Mr. Cline is the managing member. RAM is wholly owned by Cline & Company, LLC a Utah limited liability company, of which Mr. Cline is the managing member and sole owner. RAM became a, State of Utah, licensed investment advisor in March 2001. Mr. Cline has been securities licensed individual since 1983 and holds the Series 7, 24, 63, and 65 securities licenses. Mr. Cline was born 11/01/1950 and attended Northwood University, Midland, Michigan, 1968-1969 and Weber State University, Ogden, Utah, 1974-1979. Mr. Cline is a member of the Investment Management Consulting Association (IMCA) and is a candidate of the CFA Institutes, Chartered Financial Analyst program. Brian J. Kahn (Mr. Kahn) joined RAM on 06/19/2012 holds the Series 65 securities license. Mr. Kahn attended the University of Colorado, Boulder, CO, 1993-1998 and holds a Bachelor of Science degree in Business Administration. Advisory Services: RAM provides “investment supervisory services”, defined as Investment Management, to individuals and institutions. RAM utilizes an objective and disciplined investment process designed to balance risk with opportunity. This process is intended to create diversified investment strategies in order to meet the needs and goals of the client. These investment strategies may include investments in, but not limited to, equity and fixed Income securities, exchange-traded products, mutual funds, options, derivatives, currencies, private investment funds and third-party or institutional investment managers. A risk profile is constructed for the client with regard to the respective investment account. The client investment objectives, time horizons, liquidity needs, long-term and short-term volatility tolerance as well as investment experience are assessed in order to determine risk tolerance limitations and investment return expectations. Utilizing the risk profile, an investment strategy is recommended for the respective investment account. The strategy is designed to diversify the investments in order to reduce the potential for risk and improve the potential for income and/or return. The investment account is reviewed on an ongoing basis, adjusted and realigned accordingly. An Investment Policy Statement (IPS) is created, establishing the investment parameters and portfolio strategy for the client investment account. An Investment Management Agreement (IMA), describing the investment management relationship between the client and RAM is initiated and executed. The client receives quarterly reviews and performance reports for the investment account and is encouraged to meet with RAM, as needed, to review the IPS and provide information that may alter the risk profile. Client Tailored Services and Imposed Restrictions: A client may impose restrictions in investing in certain securities or types of securities in accordance with their values and beliefs, or do to changes in contributions or distributions, time horizons, tax considerations, etc. However, if the imposed restrictions or changes prevent RAM from properly managing the client account, RAM reserves the right to end the investment relationship. 3 Wrap Fee Programs: RAM does not participate in any Wrap Fee Programs. Assets Under Management: As of 01/01/2012, RAM has no assets under investment supervisory services on a discretionary basis and no assets under investment supervisory services on a non-discretionary basis. Item 5 - Fees and Compensation The following fees are computed at an annualized percentage of the account assets on a sliding scale. Investment Management Fee Schedule First Next Next Next Next Next $500,000 $500,000 $1,000,000 $1,000,000 $2,000,000 $5,000,000 2.00% 1.75% 1.50% 1.25% 1.00% .75% Next $10,000,000 and above is negotiable and may not exceed .75%. All assets in any form are considered in the computation of fees. Funds invested in cash balances, money markets, client-directed funds, private investments funds, or notes etc. will be included in computations. In computing the combined market value of a client account, each security listed on any national securities exchange shall be valued at the last quoted sale price on the valuation date of the principal exchange on which such security is traded. Any other security or asset shall be valued in a manner determined in good faith by RAM to reflect its fair market value. RAM retains the discretion to negotiate alternative fees on a client-by-client basis. Client facts, circumstances and needs are considered in determining the alternative fee. These include the complexity of the client, assets to be placed under management, anticipated future additional assets, related accounts, portfolio style, account composition, among other factors. All fees are subject to adjustment with a forty five (45) day prior notification being sent to a client. RAM charges no other fees, such as acceptance or termination fees. The final fee schedule is part of the signed IMA. Payment of Fees: The Investment Management fee will be payable quarterly in advance. The first payment is due and payable upon execution of the IMA, and will be assessed pro-rata in the event the IMA is 4 executed other than the first day of the new calendar quarter. Subsequent payments are due and will be assessed on the first day of each calendar quarter based on the value of the portfolio as of the last day of the previous calendar quarter. Payment of fees may be paid direct by the client, or client may authorize the custodian holding client funds and securities to deduct RAM advisory fees direct from the client account in accordance with statements prepared and submitted to the custodian by RAM. The custodian will provide periodic account statements to the client. Such statements will reflect all fee withdrawals by RAM. It is the client’s responsibility to verify the accuracy of the fee calculation. The custodian will not determine whether the fee is properly calculated. RAM will provide quarterly account performance reports and detailed invoices to the client. Payment is due and payable upon receipt of statements received by the custodian or invoices received by the client Other Fees and Expenses: In addition to the fee schedule, a client may also incur brokerage/trading related costs, custodian fees, third party fees and expenses related to investments in mutual funds and exchange-traded products. Item 12 describes the factors that RAM considers in selecting or recommending broker-dealers. Prepayment and Refunding of Fees: RAM collects Investment Management Fees quarterly in advance. RAM and the client may terminate the IMA within five days of the date of acceptance with no penalty to the client. After the five day rescission period, either party may terminate the agreement upon effective receipt of written notice. If termination occurs prior to the end of a calendar quarter, a pro-rata refund for any unearned fees will be promptly refunded to the client. The IMA contains a pre-dispute arbitration clause. Client understands that the agreement to arbitrate does not constitute a waiver of the right to seek a judicial forum where such a waiver would be void under the federal or state securities laws. Arbitration is final and binding on the parties. Outside Compensation: Pertaining to investment supervisory services, neither RAM nor its supervised persons accept compensation for the sale of securities or other Investment products, including insurance-based products, asset-based sales charges or service fees from the sale of mutual funds. RAM and its supervised persons do not double-dip, and will receive only fee-based compensation on RAM managed assets. Recommended mutual funds will be “no-load” or “load-waived.” Item 6 - Performance-Based Fees and Side-By-Side Management RAM does not charge any performance based fees. 5 Item 7 - Types of Clients and Account Minimums Responsible Asset Management provides advisory services to the following types of clients: • • • • • • • Individuals Trusts and Estates Pensions and Profit Sharing Plans Institutions and Endowments Foundations/Charitable organizations Corporations or other business entities Pooled invest vehicles Generally the minimum account size is $100,000 subject to a minimum annual fee of $2000. The minimum fee would increase the percentage rate paid on smaller accounts to more than 2.00% as per the standard fee schedule. However, the total fee may not exceed 2.50% per year. Item 8 - Methods of Analysis, Investment Strategies and Risk of Loss Methods of Analysis RAM uses the following methods of analysis to facilitate Investment Management. Fundamental Analysis: RAM attempts to measure the intrinsic value of a security by looking at economic and financial factors (including the overall economy, industry conditions, and the financial condition and management of the company itself) to determine if the company is underpriced (indicating it may be a good time to buy) or overpriced (indicating it may be time to sell). Fundamental analysis does not attempt to anticipate market movements. This presents a potential risk, as the price of a security can move up or down along with the overall market regardless of the economic and financial factors considered in evaluating the stock. Technical Analysis: RAM analyzes past market movements and applies that analysis to the present in an attempt to recognize recurring patterns of investor and market behavior and potentially predict future price movement. Technical analysis does not consider the underlying financial condition of a company. This presents a risk in that a poorly-managed or financially unsound company may underperform regardless of market movement. Asset Allocation: In addition to focusing on securities selection, RAM attempts to identify an appropriate ratio of securities, fixed income, and cash suitable to the client’s investment goals and risk tolerance. A risk of asset allocation is that the client may not participate in sharp increases in a particular 6 security, industry or market sector. Another risk is that the ratio of securities, fixed income, and cash will change over time due to stock and market movements and, if not corrected, will no longer be appropriate for the client’s goals. Mutual Fund and/or ETF Analysis: RAM looks at the experience and track record of the manager of the mutual fund or ETF in an attempt to determine if that manager has demonstrated an ability to invest over a period of time and in different economic conditions. RAM also looks at the underlying assets in a mutual fund or ETF in an attempt to determine if there is significant overlap in the underlying investments held in another fund(s) in the client’s portfolio. RAM also monitors the funds or ETFs in an attempt to determine if they are continuing to follow their stated investment strategy. A risk of mutual fund and/or ETF analysis is that, as in all securities investments, past performance does not guarantee future results. A manager who has been successful may not be able to replicate that success in the future. In addition, as RAM does not control the underlying investments in a fund or ETF, managers of different funds held by the client may purchase the same security, increasing the risk to the client if that security were to fall in value. There is also a risk that a manager may deviate from the stated investment mandate or strategy of the fund or ETF, which could make the holding(s) less suitable for the client’s portfolio. Third-Party Money Manager Analysis: RAM examines the experience, investment philosophies, expertise, and past performance of independent third-party or institutional investment managers in an attempt to determine if that manager has demonstrated an ability to invest over a period of time and in different economic conditions. RAM monitors the manager’s underlying holdings, strategies, securities concentrations and leverage as part of our overall periodic risk assessment. Additionally, as part of the due-diligence process, RAM surveys the manager’s compliance and business enterprise risks. A risk of investing with a third-party manager who has been successful in the past is that he/she may not be able to replicate that success in the future. In addition, as RAM does not control the underlying investments in a third-party manager’s portfolio, there is also a risk that a manager may deviate from the stated investment mandate or strategy of the portfolio, making it a less suitable investment for our clients. Moreover, as RAM does not control the manager’s daily business and compliance operations, RAM may be unaware of the lack of internal controls necessary to prevent business, regulatory or reputational deficiencies. Risks for all forms of analysis: RAM’s methods of analysis rely on the assumption that the companies whose securities are purchased and sold, the rating agencies that review these securities, and other publiclyavailable sources of information about these securities, are providing accurate and unbiased data. While RAM is alert to indications that data may be incorrect, there is always a risk that our analysis may be compromised by inaccurate or misleading information. 7 INVESTMENT STRATEGIES RAM uses the following strategy or strategies in managing client accounts, provided that such strategy or strategies are appropriate to the needs of the client and consistent with the client's investment objectives, risk tolerance, and time horizons, among other considerations: Long-term purchases: RAM purchases securities with the idea of holding them in the client's account for a year or longer. Typically RAM employs this strategy when it is believed the securities to be currently undervalued, and/or exposed to a particular asset class over time, regardless of the current projection for the asset class. A risk in a long-term purchase strategy is that by holding the security for this length of time, RAM may not be able to take advantage of short-term gains that could be profitable to a client. Moreover, if the predictions are incorrect, a security may decline sharply in value before a decision to sell is made. Short-term purchases: When utilizing this strategy, RAM purchases securities with the idea of selling them within a relatively short time (typically a year or less). RAM does this in an attempt to take advantage of conditions that may result in a price swing in the securities that is purchased. A short-term purchase strategy poses risks should the anticipated price swing not materialize; RAM, may then be left with the option of having a long-term investment in a security that was designed to be a short-term purchase, or potentially taking a loss. In addition, this strategy involves more frequent trading than does a longer-term strategy, and may result in increased brokerage and other transaction-related costs, as well as less favorable tax treatment of shortterm capital gains. Trading: RAM purchases securities with the idea of selling them very quickly (typically within 30 days or less). RAM does this in an attempt to take advantage of the prediction of brief price swings. Utilizing a trading strategy creates the potential for sudden losses if the anticipated price swings do not materialize. Moreover, under those circumstances, RAM may be left with few options, such as having a long-term investment in a security that was designed to be a short-term purchase with the potential of having to take a loss. In addition, because this strategy involves more frequent trading than does a longer-term strategy, there may be a resultant increase in brokerage and other transaction-related costs, as well as less favorable tax treatment of shortterm capital gains. Short sales: RAM borrows shares of a stock for the portfolio from someone who owns the stock, on a promise to replace the shares on a future date at a certain price. Those borrowed shares are then sold. On an agreed-upon future date, Ram buys the same stock and returns the shares to the original owner. RAM engages in short selling based on a determination that the stock will 8 go down in price after RAM has borrowed the shares. If RAM is correct and the stock price has gone down since the shares were purchased, the portfolio may realize a profit. Short selling results in some unique risks: 1. Losses can be infinite; A short sale loses when the stock price rises, and a stock is not limited (at least, theoretically) in how high it can go. For example, if one shorts 100 shares at $50 each, hoping to make a profit but the shares increase to $75 per share, one would lose $2,500. On the other hand, the price of a stock cannot fall below $0, which limits ones potential upside. 2. Short squeezes can wring out profits; As a stock price increases, short seller losses also increase as sellers rush to buy the stock to cover their positions. This increase in demand, in turn, further drives the prices up. 3. Timing; Even if one is correct in determining that the price of a stock will decline, one runs the risk of incorrectly determining when the decline will take place, i.e., being right too soon. Although a company is overvalued, it could conceivably take some time for the price to come down; during which one is vulnerable to interest, margin calls, etc. 4. Inflation; History has shown that over the long term, most stocks appreciate. Even if a company barely improves over time, inflation should drive its share price up somewhat. In fact, short selling may not be appropriate in times of inflation for that very reason, as prices may adjust upwards regardless of the value of the stock. Option writing: RAM may use options as an investment strategy. An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an asset (such as a share of stock) at a specific price on or before a certain date. An option, just like a stock or bond, is a security. An option is also a derivative, because it derives its value from an underlying asset. The two types of options are calls and puts. A call gives one the right to buy an asset at a certain price within a specific period of time. One will buy a call if it is determined that the stock will increase substantially before the option expires. A put gives the holder the right to sell an asset at a certain price within a specific period of time. One will buy a put if it is determined that the price of the stock will fall before the option expires. RAM will use options to speculate on the possibility of a sharp price swing. RAM will also use options to "hedge" a purchase of the underlying security; in other words, RAM will use an option purchase to limit the potential upside and downside of a security that was purchased for portfolio. RAM uses "covered calls", in which an option is sold on a security in the portfolio. In this strategy, the portfolio receives a fee for making the option available, and the one purchasing the option has the right to buy the security from the portfolio at an agreed-upon price. RAM uses a "spreading strategy", in which two or more option contracts are purchased (for example, a call option that is bought and a call option that is sold) for the same underlying 9 security. This effectively puts the portfolio on both sides of the market, but with the ability to vary price, time and other factors. A risk of covered calls is that the option buyer does not have to exercise the option, so that if RAM wants to sell the stock prior to the end of the option agreement, RAM will have to buy the option back from the option buyer, for a possible loss. A risk of spreading strategies is that the ability to fully profit from a price swing is limited. Risk of Loss: Securities investments are not guaranteed and clients may lose money on their investments. RAM asks that clients work to help with the understanding their tolerance for risk. Item 9 - Disciplinary Information In November of 1994, Jeffrey E. Cline (Cline) formed a new Broker-Dealer (BD) with Kevin Kunz (Kunz). Cline and Kunz were both Principals, each with a 50% ownership. Cline concentrated his efforts on the Operations and the Investment Management areas of the BD, while Kunz oversaw the Compliance and Financial Planning areas. In early 1995, Kunz brought a Private Placement project to be offered through the BD. Cline was involved with Kunz in the initial due diligence and final approval of the offering. Kunz later sold the offering to the public via himself and other registered representatives who were under his supervision. It was later in 1995, that Kunz brought another offering from the same issuer for consideration to the BD. It was during the due diligence of that new offering that Cline discovered that the prior offering documents had been altered and that some of the initial information had been misrepresented and omitted. After this discovery and with guidance of legal counsel, Cline initiated an investigation by both the Securities and Exchange Commission and the Regional NASD (FINRA) office. Further investigation would show that Kunz may have been involved with the material misrepresentation and omission of material information of the offering. In addition, Kunz was found to have paid commissions for the sales of the offering to an unregistered person. Even though Cline had not sold any of the offering to any investors, FINRA took the position that Cline, acting as a Principal of the BD, had caused a member firm (the BD) to sell a nonregistered security and filed a complaint. The offering had been deemed to be a non-registered security because of material misrepresentation and omissions. To extricate himself from the complaint and under advice of legal counsel, Cline negotiated an offer-of-settlement. 10 Complaint initiated by: NASDR (FINRA) on 08/21/1996, Case Number: C3A960029, Allegations: A member firm, acting through applicant, a principal, recommended and sold securities that were neither registered nor exempt from registration, Resolution: Decision & Order of Offer of Settlement on 07/24/1997, Sanctions Ordered: Censure and Monetary Fine of $10,000.00. FINRA maintains BrokerCheck, a computerized data system that contains information about broker-dealers, registered investment advisors and register persons at www.finra.org. Item 10 - Other Financial Industry Activities and Affiliations Mr. Cline is a licensed with NPB Financial Group (NPB) as a Registered Principal and Advisor Representative. NPB is an SEC Registered Investment Advisor and a general securities BrokerDealer having membership in the Financial Industry Regulatory Authority (FINRA). Mr. Cline manages a branch office for NPB in Salt Lake City, UT. In April of 2011, Mr. Cline founded Traverse Ridge Funds, LLC (TRF) a Utah, limited liability company, of which Mr. Cline is the managing member and sole owner. TRF is wholly owned by Cline & Company, LLC a Utah limited liability company, of which Mr. Cline is the managing member and sole owner. On April 09, 2012, TRF became the sole general partner of Owl Partners Fund, Limited Partnership (OPF) a Wisconsin, limited partnership. OPF was organized as a “pooled investment vehicle” on September 07, 2001. As of April 09, 2012 there were no additional or “limited partners” of OPF. TRF will change the name of OPF to, Traverse Ridge Sustainable ESG Fund (TRSESG) and revise the Offering Memorandum before accepting new partners. TRSESG’s investment objective is to employ both total return and absolute return strategies. Additional information will be available in the TRSESG Offering Memorandum. Ram may provide investment management as a sub-advisor for TRSESG. RAM may have a financial interest in increasing the amount of assets managed in TRSESG. However, RAM’s associated persons are not compensated for any solicitation of investment capital for TRSESG. Neither RAM, nor any of its associated persons are registered, or have an application pending to register as a futures commission merchant, commodity pool operator, a commodity trading advisor, or an associated person of the foregoing entities, with the exception of Brian J. Kahn, who is currently applying for the S3 Commodity Trading Advisor securities license. RAM, nor any of its associated persons have any relationship or arrangements with the following; a municipal securities dealer, or government securities dealer or broker; a mutual fund or exchange-traded-fund; a futures commission merchant, commodity pool operator, or commodity trading advisor; a banking or thrift institution; an accountant or accounting firm; a lawyer or law firm; a pension consultant; a real estate broker or dealer; or a sponsor or syndicator of limited partnerships. 11 RAM is not, but Investment Advisor Representatives (IA Reps) of RAM are licensed as securities salespersons (“Registered Representatives”) and insurance agents, and are in the business of selling securities and insurance products. The sale of these products account for approximately 20% of time allocated. RAM IA Reps may recommend securities, asset management, other investment advisors, or insurance products offered by NPB. If clients purchase these products through the RAM IA Reps, the RAM IA Reps may receive the normal commissions or fees associated with those products. Thus, a conflict exists between RAM’s interests and those of advisory clients. The client is under no obligation to purchase products or services recommended, or to purchase products or services either through RAM or through NPB. RAM IA Reps are licensed with various life, disability, health and other insurance companies. Insurance products offered by these companies may be recommended by RAM IA Reps. If clients purchase these products through RAM IA Reps, the RAM IA Reps may receive the normal commissions or fees associated with those products. Thus a conflict of interest exists between RAM’s interests and those of advisory clients. The client is under no obligation to purchase products or services recommended, or to purchase products or services either through RAM or through these insurance companies. Item 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Code of Ethics: Mr. Cline is a member of the Investment Management Consultant Association (IMCA) and as a member has adopted the following Code of Professional Responsibility and as a CFA candidate, he has also adopted the Code of Ethics and Standards of Professional Conduct of the CFA Institute. All associated persons of RAM are required to adhere to both codes. The Code of Professional Responsibility (IMCA) This Code has been adopted to promote and maintain a high standard of professional conduct in the investment management consulting profession. All members of IMCA are expected to subscribe to the Code, which serves to assure public confidence with the integrity and service offered by professional investment management consultants. Each financial professional shall: 1. Serve the financial interests of clients. Each professional shall always place the financial interests of the client first. All recommendations to clients and decisions on behalf of clients shall be solely in the best interest of the client. 2. Disclose fully to clients services provided and compensation received. All financial relationships, direct or indirect, between consultants and investment managers, plan 12 3. 4. 5. 6. 7. officials, beneficiaries, sponsors or any other potential conflicts of interest shall be fully disclosed on a timely basis. Provide to clients all material information related to the investment decision-making process as well as other information they may need to make informed decisions based on realistic expectations. All client inquiries shall be answered promptly, completely, and truthfully. Maintain the confidentiality of all information entrusted by the client, to the fullest extent permitted by regulatory and legal entities in conjunction with the professional’s firm/company policy. Comply fully with all statutory and regulatory requirements affecting the delivery of investment consulting services to clients. Maintain competency in investment management consulting and financial services through education and training to better serve clients and enhance investment management consulting. Maintain a high level of professional ethical conduct. A copy of The Code of Professional Responsibility is available, utilizing the contact information on page 1 of this Firm Brochure. Code of Ethics and Standards of Professional Conduct of the CFA Institute: http: www.cfapubs.org/doi/pdf/10.2469/ccb.v2010.n14.1 Participation or Interest in Client Transactions or Personal Trading: Ram does not recommend that clients buy or sell any security in which a associated person to RAM has a material interest. From time to time, associated persons of RAM may buy or sell securities for themselves that they also recommend to clients. RAM will always document any transactions that could be construed as conflicts of interest and will always transact client business before an associated person, when similar securities are being bought or sold. From time to time, associated persons of RAM may buy or sell securities for themselves at or around the same time as RAM clients. If purchased at the same time as client and the purchase is part of a block purchase, then associated persons and clients receive the same price with no priority of either over the other. If purchased separately from clients, it is the policy of RAM that no associated persons may purchase or sell any securities prior to a transaction being made for a client account. All RAM associated persons must complete an Associated Persons Trade Form which will be reviewed and sign by RAM’s Chief Compliance Officer. Associated person’s trading accounts are reviewed by the Chief Compliance Officer on an ongoing basis. 13 Item 12 - Brokerage Practices Selection or Recommendation of Broker/Dealers: RAM maintains a list of counterparties approved to execute transactions on behalf of client accounts. In selecting an approved broker-dealer through which to purchase or sell securities, RAM will look for the most favorable combination of transaction cost and securities price available under the circumstances, i.e. RAM will seek to obtain best price and execution. RAM will consider a range of factors, including price and commissions, execution ability, clearance procedures, custodial and reporting services, and the nature and quality of research and other brokerage services provided Soft Dollar Practices: Based upon the quality of brokerage, research, and/or other services provided, clients may pay a brokerage commission or mark-up in excess of that which another broker-dealer might have charged for effecting the same transaction. In certain instances, some or all of any mark-up in brokerage commission may be used to offset RAM’s costs incurred in obtaining third party research related data utilized in managing various investment strategies offered by RAM. This industry practice is often referred to as a “soft-dollar” arrangement. RAM may use soft-dollars for macro-economic research, equity and bond market research, credit analysis, and market newsletters/periodicals. This research is received in both electronic and hard copy form. RAM anticipates that the combination of brokerage services and research furnished by approved broker-dealers will be used in addressing many types of client needs and will generally benefit all client accounts overtime. However, during specific time frames or in limited circumstances not all such services may be used by RAM in connection with managing each particular client’s account. Client Referrals from Brokers: RAM will generally maintain an existing broker/dealer relationship when the client is referred to RAM. In maintaining the existing broker/dealer relationship, a conflict of interest may exist in obtaining best execution by RAM on behalf of the client. A conflict of interest may exist in obtaining future referrals from a broker/dealer if RAM did not maintain these existing relationships. Where the client is not referred by an existing broker/dealer, RAM recommends a broker/dealer with competitive commission rates. Directed Brokerage: A client may direct brokerage to a specified broker/dealer other than the firm recommended by RAM. It is up to the client to negotiate the commission rate, as RAM may not. The client may not be able to negotiate the most competitive rate. As a result, the client may pay more than the rate available through a broker/dealer used by RAM. In client directed brokerage arrangements, the client may not be able to participate in aggregated or a block trades, which may help reduce the cost of execution. Where the client does not otherwise designate a broker/dealer, RAM will recommend a broker/dealer with competitive commission rates. 14 Trade Aggregation: While individual client advice is provided for each account, client trades may be executed as a block trade. RAM will encourage its existing and new clients to use a recommended custodian. Accounts in the custody of the recommended custodian may have the opportunity to participate in aggregated securities transactions. All trades using the recommended custodian will be aggregated and done in the name of the RAM. The executing broker will be informed that the trades are for the account of the RAM’s clients and not for RAM itself. No RAM account within the block trade will be favored over any client account, and thus, each account will participate in an aggregated order at the average share price and receive the same commission rate. The aggregation should, on average, reduce slightly the costs of execution, and RAM will not aggregate a client's order if in a particular instance the RAM believes that aggregation would cause the client's cost of execution to be increased. The Custodian will be notified of the amount of each trade for each account. RAM and/or its IA Reps may participate in block trades with clients, and may also participate on a pro rata basis for partial fills, but only if clients receive fair and equitable treatment as stated in Item 11. Item 13 - Review of Accounts and Reports on Accounts Reviews: RAM client accounts are reviewed at a minimum of once per quarter. Market conditions that might cause a wide variance in the specified asset allocation, or other factors could cause a more frequent review. The client account reviews are performed by the IA Rep. The Chief Compliance Officer monitors the client accounts for adherence to the account’s IPS during periodic supervisory reviews. Reports: All clients receive account quarterly statements, confirmations and appropriate tax reporting from the custodian. All clients receive account quarterly reviews and performance reports from RAM. All clients are encouraged to compare custodial account statements against reports prepared by RAM for accuracy. Minor variations may occur because of reporting dates, accrual methods of interest and dividends, and other factors. The custodial statement is the official record of a client account for tax purposes. Item 14 - Client Referrals and Other Compensation Referral Fees Paid: RAM may compensate for client referrals. All solicitors’ agreements are in compliance with the Investment Advisers Act of 1940. In addition, all applicable federal and state laws will also be 15 observed. All clients procured by solicitors will be given full written disclosures describing the terms and fee arrangements between the advisor and the solicitor prior to or at the time of entering into the advisory agreement. Referral Fees Received: RAM may exercise agreements with other Registered Investment Advisors and recommend other Investment Advisors to clients. In such instances, RAM may receive a portion of the account fees. In these instances, RAM will make available to the client a "Compensation Disclosure Statement" and the Form ADV for the other Investment Advisor. The client is under no obligation to use the services of the recommended Investment Advisor.. Sales Awards: RAM, nor any of RAM’s IA Reps or associated persons participate or may participate in any incentive or sales awards programs. Item 15 – Custody Although client assets are held at a third-party independent custodian, RAM is deemed to have custody of client funds solely because of the fee deduction authority granted by the client in the IMA. RAM does not maintain any physical custody of client accounts. Item 16 - Investment Discretion RAM receives discretionary authority for a client’s accounts upon execution of the IMA. Pursuant to the IMA and IPS, RAM may only select the identity and the amount of securities to bought, sold or held in the account and the withdrawal of management fees. RAM does not assume Power of Attorney and is not able to withdraw funds or securities to RAM or other third parties without a client’s written approval and signature. Item 17- Voting Client Securities RA, as a matter of Policy, does not have authority to and does not vote proxies on behalf of clients. It is the client's responsibility to vote proxies. Clients will receive proxy materials directly from the custodian. Questions about proxies may be directed to RAM via the contact information on the cover page of this Brochure. 16 Item 18- Financial Information An investment advisor must provide financial information if a threshold of fee prepayments ($1200 in fees per client, six months or more in advance) is met, or a financial condition likely to impair the ability to meet contractual commitments, or a bankruptcy within the past ten years. RAM does not have any disclosure items for Item 18. Item 19 - Requirements for State Registered Advisors A. Jeffrey E. Cline is the principal executive officer and management person. Brian J. Kahn is an investment advisor representative, see Item 4. B. Other Financial Industry Activities and Affiliation, see Item 10. C. Performance Based Fees, see Item 6. D. Advisory Business, see Item 4; Methods of Analysis, Investment Selection and Risk of Loss, see Item8; Disciplinary Information, see Item 9; Other Financial Industry Activities and Affiliations, see Item 10; Code of Ethics, Participation or Interest in Client transactions and Personal Trading, see Item 11; Brokerage Practices, see Item 12; Financial Information, see Item 18. E. In both Items 4 & 11 there is a reference to Mr. Cline’s candidacy in the CFA Institutes, Chartered Financial Analyst program. To earn a CFA charter designation, a globally recognized graduate-level investment credential, one must have four years of qualified investment work experience, become a member of the CFA Institute and local member chapters, adhere to the Code of Ethics and Standards of Professional Conduct and complete the CFA program that requires, the completion of three levels of exams. 17