| Greenerbucks Firm Brochure – Form ADV Part 2A |
This brochure provides information about the qualifications and business practices of Greenerbucks. If you have any questions about the contents of this brochure, please contact us at (424) 610-7184 or by email at: Geoff.bent@greenerbucks.com. 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.
Additional information about Greenerbucks is also available on the SEC’s website at www.adviserinfo.sec.gov. Greenerbucks’s CRD number is: 324622.
1401 21st St SteR
Sacramento, CA 95811
(424) 610-7184
Geoff.bent@greenerbucks.com
Registration as an investment adviser does not imply a certain level of skill or training.
Version Date: 1/18/2023
Item 2: Material Changes
Item 3: Table of Contents
Item 1: Cover Page
Item 3: Table of Contents. iii
Item 5: Fees and Compensation. 4
Item 6: Performance-Based Fees and Side-By-Side Management 6
Item 8: Methods of Analysis, Investment Strategies, & Risk of Loss. 8
Item 9: Disciplinary Information. 13
Item 10: Other Financial Industry Activities and Affiliations. 14
Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading. 15
Item 12: Brokerage Practices. 16
Item 13: Review of Accounts. 17
Item 14: Client Referrals and Other Compensation. 17
Item 16: Investment Discretion. 18
Item 17: Voting Client Securities (Proxy Voting) 18
Item 18: Financial Information. 19
Item 19: Requirements For State Registered Advisers. 19
Item 4: Advisory Business
A. Description of the Advisory Firm
Greenerbucks (hereinafter “GRE”) is a Corporation organized in the State of California. The firm was formed in May 2022, and the principal owner is Geoffrey Cyril Bent.
B. Types of Advisory Services
GRE offers ongoing portfolio management services based on the individual goals, objectives, time horizon, and risk tolerance of each client. GRE creates an Investment Policy Statement for each client, which outlines the client’s current situation (income, tax levels, and risk tolerance levels) and then constructs a plan to aid in the selection of a portfolio that matches each client’s specific situation. Portfolio management services include, but are not limited to, the following:
• Investment strategy • Personal investment policy
• Asset allocation • Asset selection
• Risk tolerance • Regular portfolio monitoring
GRE evaluates the current investments of each client with respect to their risk tolerance levels and time horizon. Risk tolerance levels are documented in the Investment Policy Statement, which is given to each client.
GRE seeks to provide that investment decisions are made in accordance with the fiduciary duties owed to its accounts and without consideration of GRE’s economic, investment or other financial interests. To meet its fiduciary obligations, GRE attempts to avoid, among other things, investment or trading practices that systematically advantage or disadvantage certain client portfolios, and accordingly, GRE’s policy is to seek fair and equitable allocation of investment opportunities/transactions among its clients to avoid favoring one client over another over time. It is GRE’s policy to allocate investment opportunities and transactions it identifies as being appropriate and prudent, including initial public offerings (“IPOs”) and other investment opportunities that might have a limited supply, among its clients on a fair and equitable basis over time.
Services Limited to Specific Types of Investments
GRE generally limits its investment advice to mutual funds, fixed income securities, real estate funds (including REITs), insurance products including annuities, equities, ETFs (including ETFs in the gold and precious metal sectors), treasury inflation protected/inflation linked bonds, commodities, non-U.S. securities, venture capital funds and private placements. GRE may use other securities as well to help diversify a portfolio when applicable.
Written Acknowledgement of Fiduciary Status
When we provide investment advice to you regarding your retirement plan account or individual retirement account, we are fiduciaries within the meaning of Title I of the Employee Retirement Income Security Act and/or the Internal Revenue Code, as applicable, which are laws governing retirement accounts. The way we make money creates some conflicts with your interests, so we operate under a special rule that requires us to act in your best interest and not put our interest ahead of yours. Under this special rule’s provisions, we must:
C. Client Tailored Services and Client Imposed Restrictions
GRE will tailor a program for each individual client. This will include an interview session to get to know the client’s specific needs and requirements as well as a plan that will be executed by GRE on behalf of the client. GRE may use model allocations together with a specific set of recommendations for each client based on their personal restrictions, needs, and targets. Clients may impose restrictions in investing in certain securities or types of securities in accordance with their values or beliefs. However, if the restrictions prevent GRE from properly servicing the client account, or if the restrictions would require GRE to deviate from its standard suite of services, GRE reserves the right to end the relationship.
D. Wrap Fee Programs
E. Assets Under Management
GRE has the following assets under management:
| Discretionary Amounts: | Non-discretionary Amounts: | Date Calculated: |
| $0 | $0 | December 2022 |
Item 5: Fees and Compensation
A. Fee Schedule
Lower fees for comparable services may be available from other sources.
Portfolio Management Fees
| Total Assets Under Management | Annual Fees |
| $0 – $100,000 | 0.80% |
| $100,001 – $500,000 | 0.75% |
| $500,001 – $1,000,000 | 0.70% |
| $1,000,001 – $2,000,000 | 0.65% |
| $2,000,001 – $5,000,000 | 0.60% |
| $5,000,001 – $20,000,000 | 0.55% |
| $20,000,001 – and above | 0.50% |
GRE uses the value of the account as of the last business day of the billing period, after taking into account deposits and withdrawals, for purposes of determining the market value of the assets upon which the advisory fee is based.
The fee schedule is a blended tier schedule. Please see below for example.
Fee formula description: For purposes of calculating the client’s portfolio management fees described above, an example is offered below for a sample $150,000 account:
- For that portion of the client’s account(s) up to $100,000 the adviser will charge an annual fee of 0.80% as described above, resulting in an annual fee of $800 on the first $100,000; plus
- For that portion of the client’s account(s) exceeding $100,000 but not exceeding $150,000, the adviser will charge an annual fee of 0.75% as described above, resulting in an annual fee of $375 on the portion between $100,000 and $150,000.
This would result in a total annual fee of $1,175 on the sample $150,000 account
These fees are generally negotiable, and the final fee schedule will be memorialized in the client’s advisory agreement. Clients may terminate the agreement without penalty for a full refund of GRE’s fees within five business days of signing the Investment Advisory Contract. Thereafter, clients may terminate the Investment Advisory Contract generally with 3 days’ written notice.
Performance-Based Fees for Portfolio Management
Qualified clients will pay an annual fee of 0.50% of assets under management along with a 10.00% performance fee based on capital appreciation. If the client’s portfolio rises in value, the client will pay 10.00% on that increase in value, but if the portfolio drops in value, the client will not incur a new performance fee until the portfolio reaches the last highest value, adjusted for withdrawals and deposits, which is generally known as a “high water mark.” The high water mark will be the highest value of the client’s account on the last day of any previous quarter, after accounting for the client’s deposits or withdrawals for each billing period.
These fees are generally negotiable, and the final fee schedule will be memorialized in the client’s advisory agreement. This service may be canceled with 3 days’ notice. Clients must pay the prorated performance-based fees for the billing period in which they terminate the Investment Advisory Contract up to and including the day of termination.
Performance fees will only be charged to California clients in accordance with the provisions of California Code of Regulations Section 260.234.
Performance based fees can only be utilized by qualified clients meeting the following qualifications:
(i) A natural person who, or a company that, immediately after entering into the contract has at least $1,100,000 under the management of the investment adviser;
(ii) A natural person who, or a company that, the investment adviser entering into the contract (and any person acting on his behalf) reasonably believes, immediately prior to entering into the contract, either: (a) Has a net worth (together, in the case of a natural person, with assets held jointly with a spouse) of more than $2,200,000 (excluding the value of the client’s primary residence) at the time the contract is entered into; or (b) Is a qualified purchaser as defined in section 2(a)(51)(AA) of the Investment Company Act of 1940 (15U.S.C. 80a-2(51)(A)) at the time the contract is entered into; or
(iii) A natural person who immediately prior to entering into the contract is: (a) An executive officer, director, trustee, general partner or person serving in similar capacity, of the investment adviser; or (b) An employee of the investment adviser (other than an employee performing solely clerical, secretarial or administrative functions with regard to the investment adviser) who, in connection with his or her regular functions or duties, participates in the investment activities of such investment adviser, provided that such employee has been performing such functions and duties for or on behalf of the investment adviser, or substantially similar functions or duties for or on behalf of another company for at least 12 months.
B. Payment of Fees
Payment of Portfolio Management Fees
Asset-based portfolio management fees are withdrawn directly from the client’s accounts with client’s written authorization on a monthly basis. Fees are paid in arrears.
Payment of Performance-Based Portfolio Management Fees
Performance-based portfolio management fees are withdrawn directly from the client’s accounts with client’s written authorization on a monthly basis. Fees are paid in arrears.
C. Client Responsibility For Third Party Fees
D. Prepayment of Fees
GRE collects its fees in arrears. It does not collect fees in advance.
E. Outside Compensation For the Sale of Securities to Clients
Geoffrey Cyril Bent is an insurance agent and, in this role, accepts compensation for the sale of insurance products to GRE clients.
1. This is a Conflict of Interest
Supervised persons may accept compensation for the sale of insurance products. This presents a conflict of interest and gives the supervised person an incentive to recommend products based on the compensation received rather than on the client’s needs. When recommending the sale of investment products for which the supervised persons receives compensation, GRE will document the conflict of interest in the client file and inform the client of the conflict of interest.
2. Clients Have the Option to Purchase Recommended Products From Other Brokers
Clients always have the option to purchase GRE recommended products through other brokers or agents that are not affiliated with GRE.
3. Commissions are not GRE’s primary source of compensation for advisory services
Commissions are not GRE’s primary source of compensation for advisory services.
4. Advisory Fees in Addition to Commissions or Markups
Advisory fees that are charged to clients are not reduced to offset the commissions or markups on insurance products recommended to clients.
Item 6: Performance-Based Fees and Side-By-Side Management
Performance based fees can only be utilized by qualified clients meeting the following qualifications:
(i) A natural person who, or a company that, immediately after entering into the contract has at least $1,100,000 under the management of the investment adviser;
(ii) A natural person who, or a company that, the investment adviser entering into the contract (and any person acting on his behalf) reasonably believes, immediately prior to entering into the contract, either: (a) Has a net worth (together, in the case of a natural person, with assets held jointly with a spouse) of more than $2,200,000 (excluding the value of the client’s primary residence) at the time the contract is entered into; or (b) Is a qualified purchaser as defined in section 2(a)(51)(AA) of the Investment Company Act of 1940 (15U.S.C. 80a-2(51)(A)) at the time the contract is entered into; or
(iii) A natural person who immediately prior to entering into the contract is: (a) An executive officer, director, trustee, general partner or person serving in similar capacity, of the investment adviser; or (b) An employee of the investment adviser (other than an employee performing solely clerical, secretarial or administrative functions with regard to the investment adviser) who, in connection with his or her regular functions or duties, participates in the investment activities of such investment adviser, provided that such employee has been performing such functions and duties for or on behalf of the investment adviser, or substantially similar functions or duties for or on behalf of another company for at least 12 months.
Clients paying a performance-based fee should be aware that investment advisers have an incentive to invest in riskier investments when paid a performance-based fee due to the higher risk/higher reward attributes.
Item 7: Types of Clients
GRE generally provides advisory services to the following types of clients:
❖ Individuals
❖ High-Net-Worth Individuals
❖ Charitable Organizations
❖ Corporations or Business Entities
There is no account minimum for any of GRE’s services.
Item 8: Methods of Analysis, Investment Strategies, & Risk of Loss
A. Methods of Analysis and Investment Strategies
GRE’s methods of analysis include Charting analysis, Cyclical analysis, Fundamental analysis, Modern portfolio theory, Quantitative analysis and Technical analysis.
Charting analysis involves the use of patterns in performance charts. GRE uses this technique to search for patterns used to help predict favorable conditions for buying and/or selling a security.
Cyclical analysis involves the analysis of business cycles to find favorable conditions for buying and/or selling a security.
Fundamental analysis involves the analysis of financial statements, the general financial health of companies, and/or the analysis of management or competitive advantages.
Modern portfolio theory is a theory of investment that attempts to maximize portfolio expected return for a given amount of portfolio risk, or equivalently minimize risk for a given level of expected return, each by carefully choosing the proportions of various asset.
Quantitative analysis deals with measurable factors as distinguished from qualitative considerations such as the character of management or the state of employee morale, such as the value of assets, the cost of capital, historical projections of sales, and so on.
Technical analysis involves the analysis of past market data; primarily price and volume.
Investment Strategies
GRE uses long term trading, margin transactions and options trading (including covered options, uncovered options, or spreading strategies).
Investing in securities involves a risk of loss that you, as a client, should be prepared to bear.
B. Material Risks Involved
Charting analysis strategy involves using and comparing various charts to predict long and short term performance or market trends. The risk involved in using this method is that only past performance data is considered without using other methods to crosscheck data. Using charting analysis without other methods of analysis would be making the assumption that past performance will be indicative of future performance. This may not be the case.
Cyclical analysis assumes that the markets react in cyclical patterns which, once identified, can be leveraged to provide performance. The risks with this strategy are two-fold: 1) the markets do not always repeat cyclical patterns; and 2) if too many investors begin to implement this strategy, then it changes the very cycles these investors are trying to exploit.
Fundamental analysis concentrates on factors that determine a company’s value and expected future earnings. This strategy would normally encourage equity purchases in stocks that are undervalued or priced below their perceived value. The risk assumed is that the market will fail to reach expectations of perceived value.
Modern portfolio theory assumes that investors are risk averse, meaning that given two portfolios that offer the same expected return, investors will prefer the less risky one. Thus, an investor will take on increased risk only if compensated by higher expected returns. Conversely, an investor who wants higher expected returns must accept more risk. The exact trade-off will be the same for all investors, but different investors will evaluate the trade-off differently based on individual risk aversion characteristics. The implication is that a rational investor will not invest in a portfolio if a second portfolio exists with a more favorable risk-expected return profile – i.e., if for that level of risk an alternative portfolio exists which has better expected returns.
Quantitative analysis Investment strategies using quantitative models may perform differently than expected as a result of, among other things, the factors used in the models, the weight placed on each factor, changes from the factors’ historical trends, and technical issues in the construction and implementation of the models.
Technical analysis attempts to predict a future stock price or direction based on market trends. The assumption is that the market follows discernible patterns and if these patterns can be identified then a prediction can be made. The risk is that markets do not always follow patterns and relying solely on this method may not take into account new patterns that emerge over time.
Investment Strategies
GRE’s use of margin transactions and options trading generally holds greater risk, and clients should be aware that there is a material risk of loss using any of those strategies.
Long term trading is designed to capture market rates of both return and risk. Due to its nature, the long-term investment strategy can expose clients to various types of risk that will typically surface at various intervals during the time the client owns the investments. These risks include but are not limited to inflation (purchasing power) risk, interest rate risk, economic risk, market risk, and political/regulatory risk.
Margin transactions use leverage that is borrowed from a brokerage firm as collateral. When losses occur, the value of the margin account may fall below the brokerage firm’s threshold thereby triggering a margin call. This may force the account holder to either allocate more funds to the account or sell assets on a shorter time frame than desired.
Options transactions involve a contract to purchase a security at a given price, not necessarily at market value, depending on the market. This strategy includes the risk that an option may expire out of the money resulting in minimal or no value, as well as the possibility of leveraged loss of trading capital due to the leveraged nature of stock options.
Investing in securities involves a risk of loss that you, as a client, should be prepared to bear.
C. Risks of Specific Securities Utilized
Mutual Funds: Investing in mutual funds carries the risk of capital loss and thus you may lose money investing in mutual funds. All mutual funds have costs that lower investment returns. The funds can be of bond “fixed income” nature (lower risk) or stock “equity” nature.
Equity investment generally refers to buying shares of stocks in return for receiving a future payment of dividends and/or capital gains if the value of the stock increases. The value of equity securities may fluctuate in response to specific situations for each company, industry conditions and the general economic environments.
Fixed income investments generally pay a return on a fixed schedule, though the amount of the payments can vary. This type of investment can include corporate and government debt securities, leveraged loans, high yield, and investment grade debt and structured products, such as mortgage and other asset-backed securities, although individual bonds may be the best known type of fixed income security. In general, the fixed income market is volatile and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk, and credit and default risks for both issuers and counterparties. The risk of default on treasury inflation protected/inflation linked bonds is dependent upon the U.S. Treasury defaulting (extremely unlikely); however, they carry a potential risk of losing share price value, albeit rather minimal. Risks of investing in foreign fixed income securities also include the general risk of non-U.S. investing described below.
Exchange Traded Funds (ETFs): An ETF is an investment fund traded on stock exchanges, similar to stocks. Investing in ETFs carries the risk of capital loss (sometimes up to a 100% loss in the case of a stock holding bankruptcy). Areas of concern include the lack of transparency in products and increasing complexity, conflicts of interest and the possibility of inadequate regulatory compliance. Risks in investing in ETFs include trading risks, liquidity and shutdown risks, risks associated with a change in authorized participants and non-participation of authorized participants, risks that trading price differs fromindicative net asset value (iNAV), or price fluctuation and disassociation from the index being tracked. With regard to trading risks, regular trading adds cost to your portfolio thus counteracting the low fees that one of the typical benefits of ETFs. Additionally, regular trading to beneficially “time the market” is difficult to achieve. Even paid fund managers struggle to do this every year, with the majority failing to beat the relevant indexes. With regard to liquidity and shutdown risks, not all ETFs have the same level of liquidity. Since ETFs are at least as liquid as their underlying assets, trading conditions are more accurately reflected in implied liquidity rather than the average daily volume of the ETF itself. Implied liquidity is a measure of what can potentially be traded in ETFs based on its underlying assets. ETFs are subject to market volatility and the risks of their underlying securities, which may include the risks associated with investing in smaller companies, foreign securities, commodities, and fixed income investments (as applicable). Foreign securities in particular are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets. ETFs that target a small universe of securities, such as a specific region or market sector, are generally subject to greater market volatility, as well as to the specific risks associated with that sector, region, or other focus. ETFs that use derivatives, leverage, or complex investment strategies are subject to additional risks. Precious Metal ETFs (e.g., Gold, Silver, or Palladium Bullion backed “electronic shares” not physical metal) specifically may be negatively impacted by several unique factors, among them (1) large sales by the official sector which own a significant portion of aggregate world holdings in gold and other precious metals, (2) a significant increase in hedging activities by producers of gold or other precious metals, (3) a significant change in the attitude of speculators and investors. The return of an index ETF is usually different from that of the index it tracks because of fees, expenses, and tracking error. An ETF may trade at a premium or discount to its net asset value (NAV) (or indicative value in the case of exchange-traded notes). The degree of liquidity can vary significantly from one ETF to another and losses may be magnified if no liquid market exists for the ETF’s shares when attempting to sell them. Each ETF has a unique risk profile, detailed in its prospectus, offering circular, or similar material, which should be considered carefully when making investment decisions.
Real estate funds (including REITs) face several kinds of risk that are inherent in the real estate sector, which historically has experienced significant fluctuations and cycles in performance. Revenues and cash flows may be adversely affected by: changes in local real estate market conditions due to changes in national or local economic conditions or changes in local property market characteristics; competition from other properties offering the same or similar services; changes in interest rates and in the state of the debt and equity credit markets; the ongoing need for capital improvements; changes in real estate tax rates and other operating expenses; adverse changes in governmental rules and fiscal policies; adverse changes in zoning laws; the impact of present or future environmental legislation and compliance with environmental laws.
Annuities are a retirement product for those who may have the ability to pay a premium now and want to guarantee they receive certain monthly payments or a return on investment later in the future. Annuities are contracts issued by a life insurance company designed to meet requirement or other long-term goals. An annuity is not a life insurance policy. Variable annuities are designed to be long-term investments, to meet retirement and other long-range goals. Variable annuities are not suitable for meeting short-term goals because substantial taxes and insurance company charges may apply if you withdraw your money early. Variable annuities also involve investment risks, just as mutual funds do.
Private placements carry a substantial risk as they are subject to less regulation than are publicly offered securities, the market to resell these assets under applicable securities laws may be illiquid, due to restrictions, and the liquidation may be taken at a substantial discount to the underlying value or result in the entire loss of the value of such assets.
Venture capital funds invest in start-up companies at an early stage of development in the interest of generating a return through an eventual realization event; the risk is high as a result of the uncertainty involved at that stage of development.
Commodities are tangible assets used to manufacture and produce goods or services. Commodity prices are affected by different risk factors, such as disease, storage capacity, supply, demand, delivery constraints and weather. Because of those risk factors, even a well-diversified investment in commodities can be uncertain.
Options are contracts to purchase a security at a given price, risking that an option may expire out of the money resulting in minimal or no value. An uncovered option is a type of options contract that is not backed by an offsetting position that would help mitigate risk. The risk for a “naked” or uncovered put is not unlimited, whereas the potential loss for an uncovered call option is limitless. Spread option positions entail buying and selling multiple options on the same underlying security, but with different strike prices or expiration dates, which helps limit the risk of other option trading strategies. Option transactions also involve risks including but not limited to economic risk, market risk, sector risk, idiosyncratic risk, political/regulatory risk, inflation (purchasing power) risk and interest rate risk.
Non-U.S. securities present certain risks such as currency fluctuation, political and economic change, social unrest, changes in government regulation, differences in accounting and the lesser degree of accurate public information available.
Past performance is not indicative of future results. Investing in securities involves a risk of loss that you, as a client, should be prepared to bear.
Item 9: Disciplinary Information
A. Criminal or Civil Actions
There are no criminal or civil actions to report.
B. Administrative Proceedings
There are no administrative proceedings to report.
C. Self-regulatory Organization (SRO) Proceedings
There are no self-regulatory organization proceedings to report.
Item 10: Other Financial Industry Activities and Affiliations
A. Registration as a Broker/Dealer or Broker/Dealer Representative
B. Registration as a Futures Commission Merchant, Commodity Pool Operator, or a Commodity Trading Advisor
C. Registration Relationships Material to this Advisory Business and Possible Conflicts of Interests
Geoffrey Cyril Bent is a licensed insurance agent with Pacific Life Insurance Company. This activity creates a conflict of interest since there is an incentive to recommend insurance products based on commissions or other benefits received from the insurance company, rather than on the client’s needs. Additionally, the offer and sale of insurance products by supervised persons of GRE are not made in their capacity as a fiduciary, and products are limited to only those offered by certain insurance providers. GRE addresses this conflict of interest by requiring its supervised persons to act in the best interest of the client at all times, including when acting as an insurance agent. GRE periodically reviews recommendations by its supervised persons to assess whether they are based on an objective evaluation of each client’s risk profile and investment objectives rather than on the receipt of any commissions or other benefits. GRE will disclose in advance how it or its supervised persons are compensated and will disclose conflicts of interest involving any advice or service provided. At no time will there be tying between business practices and/or services (a condition where a client or prospective client would be required to accept one product or service conditioned upon the selection of a second, distinctive tied product or service). No client is ever under any obligation to purchase any insurance product. Insurance products recommended by GRE’s supervised persons may also be available from other providers on more favorable terms, and clients can purchase insurance products recommended through other unaffiliated insurance agencies.
All material conflicts of interest under Section 260.238 (k) of the California Corporations Code are disclosed regarding the investment adviser, its representatives or any of its employees, which could be reasonably expected to impair the rendering of unbiased and objective advice.
D. Selection of Other Advisers or Managers and How This Adviser is Compensated for Those Selections
GRE does not utilize nor select third-party investment advisers.
Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading
A. Code of Ethics
B. Recommendations Involving Material Financial Interests
C. Investing Personal Money in the Same Securities as Clients
From time to time, representatives of GRE may buy or sell securities for themselves that they also recommend to clients. This may provide an opportunity for representatives of GRE to buy or sell the same securities before or after recommending the same securities to clients resulting in representatives profiting off the recommendations they provide to clients. Such transactions may create a conflict of interest. GRE will always document any transactions that could be construed as conflicts of interest and will never engage in trading that operates to the client’s disadvantage when similar securities are being bought or sold.
D. Trading Securities At/Around the Same Time as Clients’ Securities
From time to time, representatives of GRE may buy or sell securities for themselves at or around the same time as clients. This may provide an opportunity for representatives of GRE to buy or sell securities before or after recommending securities to clients resulting in representatives profiting off the recommendations they provide to clients. Such transactions may create a conflict of interest; however, GRE will never engage in trading that operates to the client’s disadvantage when similar securities are being bought or sold.
Item 12: Brokerage Practices
A. Factors Used to Select Custodians and/or Broker/Dealers
Custodians/broker-dealers will be recommended based on GRE’s duty to seek “best execution,” which is the obligation to seek to execute securities transactions for a client on terms that are the most favorable to the client under the circumstances. The client will not necessarily pay the lowest commission or commission equivalent, and GRE may also consider the market expertise and research access provided by the payment of commissions, including but not limited to access to written research, oral communication with analysts, admittance to research conferences and other resources provided by the brokers to aid in the research efforts of GRE. GRE will never charge a premium or commission on transactions, beyond the actual cost imposed by the broker-dealer/custodian.
GRE will require clients to use Interactive Brokers LLC.
1. Research and Other Soft-Dollar Benefits
While GRE has no formal soft dollars program in which soft dollars are used to pay for third party services, GRE may receive research, products, or other services from custodians and broker-dealers in connection with client securities transactions (“soft dollar benefits”). GRE may enter into soft-dollar arrangements consistent with (and not outside of) the safe harbor contained in Section 28(e) of the Securities Exchange Act of 1934, as amended. There can be no assurance that any particular client will benefit from soft dollar research, whether or not the client’s transactions paid for it, and GRE does not seek to allocate benefits to client accounts proportionate to any soft dollar credits generated by the accounts. GRE benefits by not having to produce or pay for the research, products or services, and GRE will have an incentive to recommend a broker-dealer based on receiving research or services. Clients should be aware that GRE’s acceptance of soft dollar benefits may result in higher commissions charged to the client.
2. Brokerage for Client Referrals
3. Clients Directing Which Broker/Dealer/Custodian to Use
GRE will require clients to use a specific broker-dealer to execute transactions.
B. Aggregating (Block) Trading for Multiple Client Accounts
Item 13: Review of Accounts
A. Frequency and Nature of Periodic Reviews and Who Makes Those Reviews
All client accounts for GRE’s advisory services provided on an ongoing basis are reviewed at least monthly by Geoffrey Cyril Bent, Managing Partner and Chief Compliance Officer, with regard to clients’ respective investment policies and risk tolerance levels. All accounts at GRE are assigned to this reviewer.
B. Factors That Will Trigger a Non-Periodic Review of Client Accounts
C. Content and Frequency of Regular Reports Provided to Clients
Each client of GRE’s advisory services provided on an ongoing basis will receive a monthly report detailing the client’s account, including assets held, asset value, and calculation of fees. This written report will come from the custodian. GRE will also provide a monthly fee invoice to the client.
Item 14: Client Referrals and Other Compensation
A. Economic Benefits Provided by Third Parties for Advice Rendered to Clients (Includes Sales Awards or Other Prizes)
Other than soft dollar benefits as described in Item 12 above, GRE does not receive any economic benefit, directly or indirectly from any third party for advice rendered to GRE’s clients.
B. Compensation to Non – Advisory Personnel for Client Referrals
Item 15: Custody
When advisory fees are deducted directly from client accounts at client’s custodian, GRE will be deemed to have limited custody of client’s assets. Because client fees will be withdrawn directly from client accounts, in states that require it, GRE will:
(A) Possess written authorization from the client to deduct advisory fees from an account held by a qualified custodian.
(B) Send the qualified custodian written notice of the amount of the fee to be deducted from the client’s account and verify that the qualified custodian sends invoices to the client.
(C) Send the client a written invoice itemizing the fee upon or prior to fee deduction, including the formula used to calculate the fee, the time period covered by the fee and the amount of assets under management on which the fee was based.
Clients will receive all account statements and billing invoices that are required in each jurisdiction, and they should carefully review those statements for accuracy. Clients are urged to compare the account statements they received from custodian with those they received from GRE.
Item 16: Investment Discretion
GRE does not have discretion over client accounts at any time. Where GRE does not have discretionary authority to place trade orders, GRE will secure client permission prior to effecting securities transactions for the client’s account.
Item 17: Voting Client Securities (Proxy Voting)
Item 18: Financial Information
A. Balance Sheet
B. Financial Conditions Reasonably Likely to Impair Ability to Meet Contractual Commitments to Clients
Neither GRE nor its management has any financial condition that is likely to reasonably impair GRE’s ability to meet contractual commitments to clients.
C. Bankruptcy Petitions in Previous Ten Years
GRE has not been the subject of a bankruptcy petition in the last ten years.
Item 19: Requirements For State Registered Advisers
A. Principal Executive Officers and Management Persons; Their Formal Education and Business Background
B. Other Businesses in Which This Advisory Firm or its Personnel are Engaged and Time Spent on Those (If Any)
C. Calculation of Performance-Based Fees and Degree of Risk to Clients
Qualified clients will pay an annual fee of 0.50% of assets under management along with a 10.00% performance fee based on capital appreciation. If the client’s portfolio rises in value, the client will pay 10.00% on that increase in value, but if the portfolio drops in value, the client will not incur a new performance fee until the portfolio reaches the last highest value, adjusted for withdrawals and deposits, which is generally known as a “high water mark.” The high water mark will be the highest value of the client’s account on the last day of any previous quarter, after accounting for the client’s deposits or withdrawals for each billing period.
Clients paying a performance-based fee should be aware that investment advisers have an incentive to invest in riskier investments when paid a performance-based fee due to the higher risk/higher reward attributes.
(i) A natural person who, or a company that, immediately after entering into the contract has at least $1,100,000 under the management of the investment adviser;
(ii) A natural person who, or a company that, the investment adviser entering into the contract (and any person acting on his behalf) reasonably believes, immediately prior to entering into the contract, either: (a) Has a net worth (together, in the case of a natural person, with assets held jointly with a spouse) of more than $2,200,000 (excluding the value of the client’s primary residence) at the time the contract is entered into; or (b) Is a qualified purchaser as defined in section 2(a)(51)(AA) of the Investment Company Act of 1940 (15U.S.C. 80a-2(51)(A)) at the time the contract is entered into; or
(iii) A natural person who immediately prior to entering into the contract is: (a) An executive officer, director, trustee, general partner or person serving in similar capacity, of the investment adviser; or (b) An employee of the investment adviser (other than an employee performing solely clerical, secretarial or administrative functions with regard to the investment adviser) who, in connection with his or her regular functions or duties, participates in the investment activities of such investment adviser, provided that such employee has been performing such functions and duties for or on behalf of the investment adviser, or substantially similar functions or duties for or on behalf of another company for at least 12 months.
D. Material Disciplinary Disclosures for Management Persons of this Firm
There are no legal or disciplinary events such as criminal or civil actions; administrative or self-regulatory organization proceedings; or any other hearing or formal adjudication regarding a professional attainment, designation, or license that are material to a client’s or prospective client’s evaluation of this advisory business.
E. Material Relationships That Management Persons Have With Issuers of Securities (If Any)
Neither GRE, nor its management persons, has any relationship or arrangement with issuers of securities.
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