Item 9 - Additional Information
- We are required to respond to: 1. Item 9 (Disciplinary Information); and 2. Item 10 (Other Financial Industry Activities and Affiliations) of Part 2A of Form ADV.
1. We have determined that our firm and management have no disciplinary information to disclose.
2. We have the following Financial Industry Activities and Affiliations to disclose:
a. Certain of our firm’s advisory affiliates, in their individual capacities, are registered representative with Purshe Kaplan Sterling Investments, Inc. (“PKS”), a registered broker-dealer and member FINRA/SIPC. Our firm is not affiliated with PKS. In order to comply with FINRA Conduct Rule 3040, PKS as an unaffiliated broker-dealer may periodically review the investment advisory transactions of our firm. This information will be viewed by PKS’ compliance department personnel for supervisory purposes only. No information viewed will be utilized for purposes of solicitation or shared with any affiliation outside the scope of regulatory compliance. Clients are under no obligation to act upon any recommendations or execute any transactions through our advisory affiliates if they decide to follow the recommendations.
b. Certain of our firm’s advisory affiliates, in their individual capacities, are licensed insurance agents with various insurance companies in the state of California. In their individual capacity, they may recommend, on a fully disclosed commission basis, the purchase of certain insurance products. A conflict of interest exists to the extent that our firm’s advisory affiliates may recommend the purchase of insurance products where our firm’s advisory affiliates receive insurance commissions or other additional compensation. Clients are under no obligation to act upon any recommendations or execute any transactions through our advisory affiliates if they decide to follow the recommendations.
c. Management person, Amit Stavinsky, is a general partner for Gapa, LLC, a limited liability company formed in California for real estate investments and development. Mr. Stavinsky spends 12-14 hours per month on this activity. Tamar Securities’ clients are not solicited to invest in this outside business therefore no conflicts of interest exist.
- We are required to respond to: 1. Items 11 (Code of Ethics or Interest in Client Transactions and Personal Trading); 2. Item 13 (review of Accounts); 3. Item 14 (Client Referrals and Other Compensation); and 4. Item 18 (Financial Information) of Part 2A of Form ADV, as applicable to our wrap fee clients.
1. Code of ethics, participation or interest in client transactions and personal trading.
We recognize that the personal investment transactions of members and employees of our firm demand the application of a high Code of Ethics and require that all such transactions be carried out in a way that does not endanger the interest of any client. At the same time, we believe that if investment goals are similar for clients and for members and employees of our firm, it is logical and even desirable that there be common ownership of some securities.
Therefore, in order to prevent conflicts of interest, we have in place a set of procedures (including a pre-clearing procedure) with respect to transactions effected by our members, officers and employees for their personal accounts2. In order to monitor compliance with our personal trading policy, we have a quarterly securities transaction reporting system for all of our associates.
Furthermore, our firm has established a Code of Ethics which applies to all of our associated personnel. An investment adviser is considered a fiduciary. As a fiduciary, it is an investment adviser’s responsibility to provide fair and full disclosure of all material facts and to act solely in the best interest of each of our clients at all times. We have a fiduciary duty to all clients. Our fiduciary duty is considered the core underlying principle for our Code of Ethics which also includes Insider Trading and Personal Securities Transactions Policies and Procedures. We require all of our supervised persons to conduct business with the highest level of ethical standards and to comply with all federal and state securities laws at all times. Upon employment or affiliation and at least annually thereafter, all supervised persons will sign an acknowledgement that they have read, understand, and agree to comply with our Code of Ethics. Our firm and supervised persons must conduct business in an honest, ethical, and fair manner and avoid all circumstances that might negatively affect or appear to affect our duty of complete loyalty to all clients. This disclosure is provided to give all clients a summary of our Code of Ethics. However, if a client or a potential client wishes to review our Code of Ethics in its entirety, a copy will be provided promptly upon request.
2For purposes of the policy, our associate’s personal account generally includes any account (a) in the name of our associate, his/her spouse, his/her minor children or other dependents residing in the same household, (b) for which our associate is a trustee or executor, or (c) which our associate controls, including our client accounts which our associate controls and/or a member of his/her household has a direct or indirect beneficial interest in.
a) If either our firm or a related person invests in the same securities (or related securities, e.g., warrants, options or futures) that our firm or a related person recommends to clients, we are required to describe our practice and discuss the conflicts of interest this presents and generally how we address the conflicts that arise in connection with personal trading.
See Item 9 Section B (1) of our Code of Ethics description. Related persons of our firm may buy or sell securities and other investments that are also recommended to clients. In order to minimize this conflict of interest, our related persons will place client interests ahead of their own interests and adhere to our firm’s Code of Ethics, a copy of which is available upon request.
b) If either our firm or a related person recommends securities to clients, or buys or sells securities for client accounts, at or about the same time that either you or a related person buys or sells the same securities for our firm’s (or the related person’s own) account, we are required to describe our practice and discuss the conflicts of interest it presents. We are also required to describe generally how we address conflicts that arise.
See Item 9 Section B (1) of our Code of Ethics description. Related persons of our firm may buy or sell securities for themselves at or about the same time they buy or sell the same securities for client accounts. In order to minimize this conflict of interest, our related persons will place client interests ahead of their own interests and adhere to our firm’s Code of Ethics, a copy of which is available upon request. Further, our related persons will refrain from buying or selling the same securities within 48 hours of buying or selling for our clients. If related persons’ accounts are included in a block trade, our related persons will always trade personal accounts last.
2. Review of accounts.
a) Review of client accounts, along with a description of the frequency and nature of our review, and the titles of our employees who conduct the review.
We review accounts on at least a monthly basis for our clients subscribing to the TAM sm Wrap Fee Program. The nature of these reviews is to learn whether clients’ accounts are in line with their changing life circumstances, risk parameters, investment objectives, appropriately positioned based on market conditions, and their investment policies, if applicable. Only our Financial Advisors or Portfolio Managers will conduct these reviews.
b) Review of client accounts on other than a periodic basis, along with a description of the factors that trigger a review.
We may review client accounts more frequently than described above. Among the factors which may trigger an off-cycle review are major market or economic events, a material change in the life of the client, and/or a general request by the client.
c) Description of the content and indication of the frequency of written or verbal regular reports we provide to clients regarding their accounts.
We do not provide written reports to clients, unless asked to do so. Verbal reports to clients take place on at least an annual basis when we contact clients.
3. Client referrals and other compensation.
a) If someone who is not a client provides an economic benefit to our firm for providing investment advice or other advisory services to our clients, we must generally describe the arrangement. For purposes of this Item, economic benefits include any sales awards or other prizes.
Schwab has provided a loan to us to assist our business operations, and the loan is guaranteed by Amit Raz Stavinsky, a principal of our firm. The terms of the loan require that management fees to our firm be paid to an account at Schwab for deduction of interest and principal payments pursuant to the loan before we may have access to that fee payment. The loan agreement contains various representations by our firm, including that we will maintain $65,000,000 million in assets under management, and various events of default, including that our firm will comply with all laws, contracts, licenses and permits. In the event of an unheeded default under the terms of the loan agreement, Schwab may terminate and/or accelerate the loan, which may have a material adverse effect on our firm’s ability to perform services for our clients.
The Schwab Advisor Business Loan benefits us and may not benefit our client accounts. Our firm’s recommendation that a client place assets in Schwab’s custody may be based in part on benefits Schwab provides to us, and not solely on the nature, cost or quality of custody and execution services provided by Schwab.
b) If our firm or a related person directly or indirectly compensates any person who is not our employee for client referrals, we are required to describe the arrangement and the compensation.
We do not pay referral fees (non-commission based) to independent solicitors (nonregistered representatives) for the referral of their clients to our firm in accordance with Rule 206 (4)-3 of the Investment Advisers Act of 1940.
4. Financial information.
a) If we require or solicit prepayment of more than $1,200 in fees per client, six months or more in advance, we must include a balance sheet for our most recent fiscal year.
We do not require nor do we solicit prepayment of more than $1,200 in fees per client, six months or more in advance; therefore, we have not included a balance sheet for our most recent fiscal year.
b) If we are an SEC-registered adviser and have discretionary authority or custody of client funds or securities, or we require or solicit prepayment of more than $1,200 in fees per client, six months or more in advance, we must disclose any financial condition that is reasonably likely to impair our ability to meet contractual commitments to clients.
We have nothing to disclose in this regard.
c) If we have been the subject of a bankruptcy petition at any time during the past ten years, we must disclose this fact, the date the petition was first brought, and the current status.
We have nothing to disclose in this regard.