Source: http://docplayer.net/8161385-Jersey-shore-portfolio-management-llc-form-adv-part-2a-disclosure-brochure.html
Timestamp: 2019-01-17 22:12:37
Document Index: 248736273

Matched Legal Cases: ['art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 1', 'art 2', 'art 1', 'art 2', 'art 2', 'art 2', 'art 1', 'art 1', 'arts 1', 'art 1', 'art 2', 'art 2']

Jersey Shore Portfolio Management, LLC. Form ADV Part 2A Disclosure Brochure - PDF
Download "Jersey Shore Portfolio Management, LLC. Form ADV Part 2A Disclosure Brochure"
1 Form ADV Part 2A Disclosure Brochure Effective: March 10, 2015 This Disclosure Brochure provides information about the qualifications and business practices of Jersey Shore Portfolio Management, LLC ( JSPM ). If you have any questions about the contents of this Disclosure Brochure, please contact us at (866) or by at JSPM is a Registered Investment Advisor with the State of New Jersey. The information in this Disclosure Brochure has not been approved or verified by the U.S. Securities and Exchange Commission ( SEC ) or by any state securities authority. Registration of an investment advisor does not imply any specific level of skill or training. This Disclosure Brochure provides information about JSPM to assist you in determining whether to retain the Advisor. Additional information about JSPM and its advisory persons are available on the SEC s website at CRD No: Main Street Suite 2B Loch Arbour, NJ 07711
2 Item 2 Material Changes Form ADV 2 is divided into two parts: Part 2A and Part 2B. Part 2A (the Disclosure Brochure ) provides information about a variety of topics relating to an Advisor s business practices and conflicts of interest. Part 2B (the Brochure Supplement ) provides information about advisory personnel of JSPM. JSPM believes that communication and transparency are the foundation of our relationship and we continually strive to provide our Clients with complete and accurate information at all times. We encourage all current and prospective Clients to read this Disclosure Brochure and discuss any questions you may have with us. And of course, we always welcome your feedback. Material Changes The following notable and/or material changes have been made to our Disclosure Brochure: ( JSPM ) has expanded its business practices to include Money Management services to its clients, as well as clients of other Advisors. These services are currently offered through Interactive Brokers, LLC, JSPM s primary broker and recommended Custodian. (NFA # ) is a registered Commodity Trading Advisor ( CTA ) and Commodity Pool Operator ( CPO ) with the National Futures Association ( NFA ). offers three distinct Actively-Managed Strategies: The JSI Select Absolute-Return Strategy, The JSI Worldwide Opportunity Strategy and The JSI Advisor Growth Strategy. Investor funds are managed as Separately Managed Accounts (SMAs) and each Actively- Managed Strategy has applicable minimum investment and investor qualification requirements. offers a Self-Directed Account option for experienced selfdirected traders and investors. This option is offered exclusively on the trading platform at Interactive Brokers, LLC, JSPM s primary broker and recommended Custodian. Jersey Shore Portfolio Management provides platform set-up/training, ad-hoc advising, and back-up trading support to Self-Directed customers at a discounted annual advisory fee. Future Changes From time to time, we may amend this Disclosure Brochure to reflect changes in our business practices, changes in regulations and routine annual updates as required by the securities regulators. This complete Disclosure Brochure or a Summary of Material Changes shall be provided to each Client annually and if a material change occurs in the business practices of JSPM. At any time, you may view the current Disclosure Brochure on-line at the SEC s Investment Adviser Public Disclosure website at To review the firm information for JSPM: Click Investment Advisor Search in the left navigation menu. Select the option for Investment Advisor Firm and enter (our firm s CRD number) in the field labeled Firm IARD/CRD Number. This will provide access to Form ADV Part 1 and Part 2. Item 11 of the ADV Part 1 lists legal and disciplinary questions regarding the Advisor. In the left navigation menu, Form ADV Part 2 is located near the bottom. You may also request a copy of this Disclosure Brochure at any time, by contacting us at (866) or by at Page 2
3 Item 3 Table of Contents Item 1 Cover Page... 1 Item 2 Material Changes... 2 Item 3 Table of Contents... 3 Item 4 Advisory Services... 4 A. Firm Information... 4 B. Advisory Services Offered... 4 C. Client Account Management... 5 D. Wrap Fee Programs... 6 E. Assets Under Management... 6 Item 5 Fees and Compensation... 6 A. Fees for Advisory Services... 6 B. Fee Billing... 7 C. Other Fees and Expenses... 7 D. Advance Payment of Fees and Termination... 8 E. Compensation for Sales of Securities... 8 Item 6 Performance-Based Fees and Side-By-Side Management... 8 Item 7 Types of Clients... 9 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss... 9 A. Methods of Analysis... 9 B. Risk of Loss... 9 Item 9 Disciplinary Information Item 10 Other Financial Industry Activities and Affiliations Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading A. Code of Ethics B. Personal Trading with Material Interest C. Personal Trading in Same Securities as Clients D. Personal Trading at Same Time as Client Item 12 Brokerage Practices A. Recommendation of Custodian[s] B. Aggregating and Allocating Trades Item 13 Review of Accounts A. Frequency of Reviews B. Causes for Reviews C. Review Reports Item 14 - Client Referrals and Other Compensation A. Compensation Received by JSPM B. Client Referrals from Solicitors Item 15 Custody Item 16 Investment Discretion Item 17 Voting Client Securities Item 18 Financial Information Item 19 Requirements for State Registered Advisors A. Educational Background and Business Experience of Principal Officer B. Other Business Activities of Principal Officer C. Performance Fee Calculations D. Disciplinary Information E. Material Relationships with Issuers of Securities ADV Part 2B Ryan Morse ADV Part 2B Peter Cavezza III Page 3
4 Item 4 Advisory Services A. Firm Information ( JSPM or the Advisor ) is a Registered Investment Advisor with the State of New Jersey, which is organized as a Limited Liability Company (LLC) under the laws of the State of New Jersey. JSPM was founded in October 2007, and is owned and operated by President, Chief Investment Officer and Chief Compliance Officer, Ryan D. Morse. JSPM also markets its advisory services under a NJ State approved alternative business name, Jersey Shore Investments ( JSI ). This Disclosure Brochure provides information regarding the qualifications, business practices, and the advisory services provided by JSPM. B. Advisory Services Offered JSPM offers investment advisory services to individuals, high net worth individuals, trusts, estates and businesses in New Jersey and other states, as well as clients of other Advisors (each referred to as a Client ). Account Portfolio Management JSPM provides customized investment advisory solutions for its Clients. This is achieved through continuous personal Client contact and interaction while providing discretionary investment management and consulting services. JSPM works with each Client to identify their investment goals and objectives as well as risk tolerance and financial situation in order to create a portfolio allocation. JSPM will then construct a portfolio, consisting of exchange-traded funds ( ETFs ), individual stocks and bonds, and options on securities to achieve the Client s investment goals. The Advisor may also utilize mutual funds, futures, United States government bonds and alternative investments to meet the needs of its Clients. JSPM s investment strategy is primarily long-term focused, but the Advisor may buy, sell or re-allocate positions that have been held less than one year to meet the objectives of the Client or due to market conditions. JSPM will construct, implement and monitor the portfolio to ensure it meets the goals, objectives, circumstances, and risk tolerance agreed to by the Client. Each Client will have the opportunity to place reasonable restrictions on the types of investments to be held in their respective portfolio, subject to the acceptance by the Advisor. Our general philosophy is to target mid and large cap equities and take advantage of market fluctuations when possible. Stocks are selected based on fundamental filters; positions are initiated and maintained based on technical indications. Risk management is vital to our strategy. Accounts will have higher turnover than a buy and hold strategy because the strategy is active when volatility occurs in the markets. Options, futures and currencies may be implemented to hedge against downturns and to capitalize on short and medium term market trends. JSPM evaluates and selects assets for inclusion in Client portfolios only after applying their internal due diligence process. JSPM may recommend, on occasion, redistributing investment allocations to diversify the portfolio. JSPM may recommend specific positions to increase sector or asset class weightings. The Advisor may recommend employing cash positions as a possible hedge against market movement, which may adversely affect the portfolio. JSPM may recommend selling positions for reasons that include, but are not limited to, harvesting capital gains or losses, business or sector risk exposure to a specific security or class of securities, overvaluation or overweighting of the position[s] in the portfolio, change in risk tolerance of Client, generating cash to meet Client needs, or any risk deemed unacceptable for the Client s risk tolerance. Actively-Managed Strategies JSPM currently offers the following three Actively-Managed Strategies to qualified investors: The JSI Select Absolute Return Strategy, The JSI Worldwide Opportunity Strategy and The JSI Advisor Growth Strategy. Investor funds are managed as Separately Managed Accounts (SMAs) and each Actively-Managed Strategy has applicable minimum investment and investor qualification requirements. Page 4
5 Prior to rendering investment advisory services, JSPM will ascertain, in conjunction with the Client, the Client s financial situation, risk tolerance, and investment objective[s]. JSPM will provide investment advisory services and portfolio management services and will not provide securities custodial or other administrative services. At no time will JSPM accept or maintain custody of a Client s funds or securities. All Client assets will be managed within their designated brokerage account or pension account, pursuant to the Client Investment Advisory Agreement. Financial Planning and Consulting Services JSPM will typically provide a variety of financial planning services to individuals and families, pursuant to a written Financial Planning or Consulting Agreement. Services are offered in several areas of a Client s financial situation, depending on their goals, objectives and financial situation. Generally, such financial planning services will involve preparing a financial plan or rendering a financial consultation for clients based on the Client s financial goals and objectives. This planning or consulting may encompass one or more areas of need, including, but not limited to investment planning, retirement planning, personal savings, education savings and other areas of a Client s financial situation. A financial plan developed for or financial consultation rendered to the Client will usually include general recommendations for a course of activity or specific actions to be taken by the Client. For example, recommendations may be made that the Client start or revise their investment programs, commence or alter retirement savings, establish education savings and/or charitable giving programs. JSPM may also refer Clients to an accountant, attorney or other specialist, as appropriate for their unique situation. For certain financial planning engagements, the Advisor will provide a written summary of Client s financial situation, observations, and recommendations. For consulting or ad-hoc engagements, the Advisor may not provide a written summary. Plans or consultations are typically completed within six months of contract date, assuming all information and documents requested are provided promptly. Financial planning and consulting recommendations may pose a potential conflict between the interests of the Advisor and the interests of the Client. Clients are not obligated to implement any recommendations made by the Advisor or maintain an ongoing relationship with the Advisor. If the Client elects to act on any of the recommendations made by the Advisor, the Client is under no obligation to effect the transaction through the Advisor. Self-Directed Trading and Investing Assistance offers a Self-Directed option for experienced self-directed traders and investors through Interactive Brokers, LLC. Jersey Shore Portfolio Management provides platform set-up / training, ad-hoc advising and back-up trading support to Self-Directed customers at a discounted advisory fee. does NOT actively manage Self-Directed customer accounts. C. Client Account Management Prior to engaging JSPM to provide investment advisory services, each Client is required to enter into an Investment Advisory Agreement with the Advisor that defines the terms, conditions, authority and responsibilities of the Advisor and the Client. These services may include: Establishing an Investment Policy Statement JSPM, in connection with the Client, may develop a statement that summarizes the Client s investment goals and objectives along with the broad strategy[ies] to be employed to meet the objectives. An Investment Policy Statement generally includes specific information on the Client s stated goals, time horizon for achieving the goals, investment strategies, Client risk tolerance and any restrictions imposed by the Client. Page 5
6 Asset Allocation JSPM will develop a strategic asset allocation that is targeted to meet the investment objectives, time horizon, financial situation and tolerance for risk for each Client. Portfolio Construction JSPM will develop a portfolio for the Client that is intended to meet the stated goals and objectives of the Client. Investment Management and Supervision JSPM will provide investment management and ongoing oversight of the Client s portfolio and overall account. D. Wrap Fee Programs JSPM does not manage or place Client assets into a wrap fee program. Investment management services are provided directly by JSPM. E. Assets Under Management As of December 31, 2014, JSPM manages $2,450, in discretionary assets under management. Item 5 Fees and Compensation The following paragraphs detail the fee structure and compensation methodology for investment management. Each Client shall sign an Investment Advisory Agreement that details the responsibilities of JSPM and the Client. A. Fees for Advisory Services Account Portfolio Management Investment Advisory Fees may be paid utilizing two different methods pursuant to the Investment Advisory Agreement. Fees may be paid monthly in advance or paid daily and deducted each business day. Investment Advisory Fees range from 0.50% to 2.75% depending on the size and complexity of the Client relationship. Relationships with multiple objectives, specific reporting requirements, portfolio restrictions and other complexities may be charged a higher fee. Investment Advisory Fees paid monthly are prorated from the inception date of the account to the end of the first month. Fees may be negotiable at the discretion of the Advisor. The Client s fees will take into consideration the aggregate assets under management with Advisor. All securities held in accounts managed by JSPM will be independently valued by the designated Custodian. JSPM will not have the authority or responsibility to value portfolio securities. Actively-Managed Strategies Money Management Fees for our Actively-Managed Strategies are paid daily and deducted each business day. Money Management Fees range from 0.50% to 2.00% annually depending on a number of factors, including but not limited to, the strategy, size and whether the investor is investing directly through JSPM or through another Advisor. Money Management Fees are included in the Investment Advisory Fee for Clients of JSPM. A performance-based incentive fee (Item 6 below) applies to The JSI Select Absolute-Return and The JSI Worldwide Opportunity Strategies. Financial Planning and Consulting Services JSPM offers financial planning or consulting services on a fixed fee basis ranging from $50 to $5,000, which may be negotiable depending on the nature and complexity of each Client s circumstances. An estimate for total hours will be determined prior to establishing the advisory relationship. The Advisor s fee is exclusive of, and in addition to brokerage fees, transaction fees, and other related costs and expenses, which may be incurred by the Client. However, the Advisor shall not receive any portion of these Page 6
7 commissions, fees, and costs. The hourly fees are determined after considering many factors, such as the level and scope of the services. Self-Directed Trading and Investing Assistance provides set-up and training on the Custodian s platform, ad-hoc advising and back-up trading support to qualifying Self-Directed customers at a discounted annual advisory fee ranging from 0.25% to 0.75% depending on the account size, objective, complexity and nature of trading. B. Fee Billing Investment Advisory and Money Management Investment Advisory Fees that are paid monthly will be automatically deducted from the Client Account by the Custodian at the instruction of the Advisor. The Advisor shall send an invoice to the Custodian indicating the amount of the fees to be deducted from the Client Account at the respective month end date. The amount due is calculated by applying the monthly rate (annual rate divided by 12) to the total assets under management with JSPM at the end of each month. Clients will be provided with a statement, at least quarterly, from the Custodian reflecting deduction of the Investment Advisory Fee. In addition, the Advisor will provide the Client a report itemizing the fee, including the calculation period covered by the fee, the account value and the methodology used to calculate the fee. It is the responsibility of the Client to verify the accuracy of these fees as listed on the custodian s brokerage statement as the Custodian does not assume this responsibility. Clients provide written authorization permitting JSPM to be paid directly from their accounts held by the Custodian as part of the Investment Advisory Agreement and separate account forms provided by the Custodian. Investment Advisory Fees and/or Money Management Fees that are paid daily will be automatically calculated daily by the Custodian based on the annualized rate and deducted each business day from the Client Account by the Custodian. The Custodian will provide an account statement to the Client no less frequently than quarterly that includes the details of these fees. The Client may review these fees and the details of their Account(s) at any time by accessing their Account(s) via the Custodian s client access portal. Money Management Fees for Actively-Managed Strategies are included in the Investment Advisory Fee for Advisory Clients of JSPM. Money Management Fees for Actively-Managed Strategies are independent of any Investment Advisory Fees charged by other Advisors allocating client assets to the Actively-Managed Strategies. Any applicable Performance-Based Fees are assessed on a quarterly basis. [See Item 6.0] It is the responsibility of the Client to verify the accuracy of these fee calculations as listed on the Custodian s brokerage statement. The Advisor is not responsible for calculating daily fees. Financial Planning and Consulting Services Financial planning and consulting fees are invoiced 50% upon execution of the Financial Planning and Consulting Agreement and 50% upon receipt of the agreed upon deliverable. C. Other Fees and Expenses Clients may incur certain fees or charges imposed by third-parties, other than JSPM, in connection with investment made on behalf of the Client s account[s]. The Client is responsible for all custodial and securities execution fees charged by the custodian and executing broker-dealer. The Investment Advisory Fee charged by JSPM is separate and distinct from these custodian and execution fees. In addition, all fees paid to JSPM for investment advisory services are separate and distinct from the expenses charged by mutual funds and exchange-traded funds to their shareholders, if applicable. These fees and expenses are described in each fund s prospectus. These fees and expenses will generally be used to pay management fees for the funds, other fund expenses, account administration (e.g., custody, brokerage and account reporting), and a possible distribution fee. A Client could invest in these products directly, without the services of JSPM, but would Page 7
8 not receive the services provided by JSPM which are designed, among other things, to assist the Client in determining which products or services are most appropriate to each Client s financial situation and objectives. Accordingly, the Client should review both the fees charged by the fund[s] and the fees charged by JSPM to fully understand the total fees to be paid. D. Advance Payment of Fees and Termination Account Portfolio Management For monthly feees, JSPM is compensated for its services in advance of the month in which investment advisory services are rendered. Clients may request to terminate their Investment Advisory Agreement with JSPM, in whole or in part, by providing advance written notice. The Client shall be responsible for Investment Advisory Fees up to and including the effective date of termination. Upon termination, the Advisor will refund any unearned, prepaid Investment Advisory Fees from the effective date of termination to the end of the month. For daily fees, JSPM is compensated for its services after investment advisory services are rendered. Clients are responsible for the Investment Advisory Fees up to and including the effective date of termination. The Client s Investment Advisory Agreement with the Advisor is non-transferable without Client s written approval. Financial Planning and Consulting Services In the event that a Client should wish to cancel the financial planning agreement under which any plan is being created, the Client shall be billed for actual hours logged on the planning project times the agreed upon hourly rate. Any surplus in the Advisor's possession as the result of collecting a deposit at the time of signing the financial planning agreement will be returned to the Client within 5 business days of cancellation. Either party may terminate a planning or consulting agreement at anytime by providing written notice to the other party. In addition, the Client may terminate the agreement within five (5) days of signing the Advisor s financial planning or consulting agreement at no cost to the Client. After the five day period, the Client will incur charges for bona fide advisory services rendered to the point of termination and such fees will be due and payable by the Client. Refunds will be given on a pro-rata basis. E. Compensation for Sales of Securities JSPM does not buy or sell securities and does not receive any compensation for securities transactions in any Client account, other than the Investment Advisory Fees noted above. Item 6 Performance-Based Fees and Side-By-Side Management JSPM may receive a Performance Fee based upon any gains obtained in the accounts of Qualified Clients pursuant to an Investment Advisory Agreement. Only Qualified Clients with either $1,000,000 under management with the Advisor or a net worth of $2.0 million will be charged a Performance Fee. Qualified Clients that are charged a Performance Fee may be offered a lower Investment Advisory Fee. The Performance Fee will be calculated at the close of each calendar quarter and deducted from Client accounts directly by the Custodian. The Performance Fee will be equal to 15% to 25% of any gains in the Client account for the quarter depending on the nature and complexity of the services. The Advisor will receive the Performance Fee only to the extent that there are cumulative gains (Net New Profits) in the Client's account for the quarter. The receipt of a Performance Fee by certain Clients results in a potential conflict of interest, where JSPM has the potential for higher compensation from a Client. JSPM may charge a lower Investment Advisory Fee to Clients that are charged a Performance Fee. Who is a Qualified Client? The Investment Advisers Act of 1940 (the Advisers Act ), Rule 205-3(d)(1) defines a Qualified Client who is financially sophisticated and meets one or more of the following conditions: Page 8
9 1. Client is a natural person who or a company that immediately after entering into the contract has at least $1,000,000 under the management of the Advisor; 2. Client is a natural person who or a company that immediately prior to entering into the contract, has a net worth (together, in the case of a natural person, with assets held jointly with a spouse) of more than $2,000,000 at the time the contract is entered into. Additional Qualifications JSPM operates in accordance with Rule 4.7 of the Commodity Exchange Act (CEA). Accordingly, JSPM currently only offers futures-based trading strategies to Qualified Eligible Persons (QEPs), as defined by the Commodity Futures Trading Commission (CFTC). For more information, including the definition of a QEP, please visit the NFA s website at This additional QEP qualification requirement applies specifically to Actively-Managed Strategy investors wishing to invest in The JSI Select Absolute-Return and The JSI Worldwide Opportunity Strategies. JSPM maintains an Investor Qualification Questionnaire to ensure compliance with Rule 4.7 of the Commodity Exchange Act. Item 7 Types of Clients JSPM provides investment advisory services to the following types of Clients: Individuals, Personal Trusts and Estates private investors, investing their personal assets High Net Worth Individuals - private investors with more than one million dollars invested with the Advisor or more than two million in net worth Corporations and Businesses taxable business entities, investing cash reserves The relative percentage each type of Client is available on JSPM s Form ADV Part 1. These percentages will change over time. JSPM generally does not impose a minimum account size for establishing a relationship. Item 8 Methods of Analysis, Investment Strategies and Risk of Loss A. Methods of Analysis JSPM primarily employs fundamental and technical analysis methods in developing investment strategies for its Clients. Research and analysis from JSPM is derived from numerous sources, including financial media companies, third-party research materials, Internet sources, and review of company activities, including annual reports, prospectuses, press releases and research prepared by others. As noted above, JSPM generally employs a long-term investment strategy for its Clients, as consistent with their financial goals. JSPM will typically hold all or a portion of a security for more than a year, but may hold for shorter periods for the purpose of rebalancing a portfolio or meeting the cash needs of Clients. At times, JSPM may also buy and sell positions that are more short-term in nature, depending on the goals of the Client and/or the fundamentals of the security, sector or asset class. B. Risk of Loss Investing in securities involves certain investment risks. Securities may fluctuate in value or lose value. Clients should be prepared to bear the potential risk of loss. JSPM will assist Clients in determining an appropriate strategy based on their tolerance for risk and other factors noted above. However, there is no guarantee that a Client will meet their investment goals. Page 9
10 Fundamental analysis utilizes economic and business indicators as investment selection criteria. These criteria are generally ratios and trends that may indicate the overall strength and financial viability of the entity being analyzed. Assets are deemed suitable if they meet certain criteria to indicate that they are a strong investment with a value discounted by the market. While this type of analysis helps the Advisor in evaluating a potential investment, it does not guarantee that the investment will increase in value. Assets meeting the investment criteria utilized in the fundamental analysis may lose value and may have negative investment performance. The Advisor monitors these economic indicators to determine if adjustments to strategic allocations are appropriate. More details on the Advisor s review process are included in Item 13. Technical analysis is used for analyzing various economic and market trends. These trends, both short- and longterm, are used for determining specific trade entry and exit points and broad economic analysis. These trends may include put/call ratios, pricing trends, moving averages, volume, and changes in volume, among many others. These indicators do not speak to the financial health of a particular issuer. Rather, indicators are used to gauge market sentiment regarding a given issue. Technical analysis will be used primarily for the timing of a particular trade, and not security selection. Each Client engagement will entail a review of the Client's investment goals, financial situation, time horizon, tolerance for risk and other factors to develop an appropriate strategy for managing a Client's account. Client participation in this process, including full and accurate disclosure of requested information, is essential for the analysis of a Client's account. The Advisor shall rely on the financial and other information provided by the Client or their designees without the duty or obligation to validate the accuracy and completeness of the provided information. It is the responsibility of the Client to inform the Advisor of any changes in financial condition, goals or other factors that may affect this analysis. The risks associated with a particular strategy are provided to each Client in advance of investing Client accounts. The Advisor will work with each Client to determine their tolerance for risk as part of the portfolio construction process. JSPM may use margin in Client accounts to manage the timing of purchases and sales, as appropriate. JSPM may employ options strategies to hedge or gain additional exposure to a particular asset class or sector. JSPM s investment strategy encompasses active trading in concentrated portfolios. Following are some of the risks associated with certain transactions: Options Contracts Investments in options contracts have the risk of losing value in a relatively short period of time. Option contracts are leveraged instruments that allow the holder of a single contract to control many shares of an underlying stock. This leverage can compound gains or losses. Margin Borrowings The use of short-term margin borrowings may result in certain additional risks to a Client. For example, if securities pledged to brokers to secure a Client's margin accounts decline in value, the Client could be subject to a "margin call", pursuant to which it must either deposit additional funds with the broker or be the subject of mandatory liquidation of the pledged securities to compensate for the decline in value. Short Sales A short sale involves the sale of a security that the Client does not own in the hope of purchasing the same security at a later date at a lower price. To make delivery to the buyer, the Client must borrow the security and is obligated to return the security to the lender, which is accomplished by a later purchase of the security. The Client realizes a profit or a loss as a result of a short sale if the price of the security decreases or increases respectively between the date of the short sale and the date on which the Client covers its short position, i.e., Page 10
11 purchases the security to replace the borrowed security. A short sale involves the theoretically unlimited risk of an increase in the market price of the security that would result in a theoretically unlimited loss. Alternative Investments (Limited Partnerships) The performance of alternative investments (limited partnerships) can be volatile and may have limited liquidity. An investor could lose all or a portion of their investment. Such investments often have concentrated positions and investments that may carry higher risks. Client should only have a portion of their assets in these investments. Concentrated Portfolios Concentrated portfolios are an aggressive and highly volatile approach to trading and investing and should be viewed as complementary to a stable, highly predictable investment approach. Concentrated portfolios hold fewer different stocks than a diversified portfolio and are much more likely to experience sudden dramatic price swings. In addition, the rise or drop in price of any given holding in the portfolio is likely to have a larger impact on portfolio performance, than a more broadly diversified portfolio. Frequent Trading Frequent trading in securities can result in higher transaction costs in the Client s account[s]. For taxable accounts, frequent trading can also result in taxable transactions each year that would not be present in a buyand-hold strategy. There are no guarantees that a frequent trading strategy will correctly time purchases and sales of any particular security. Past performance is not a guarantee of future returns. Investing in securities and other investments involve a risk of loss that each Client should understand and be willing to bear. Clients are reminded to discuss these risks with the Advisor. For more information on our investment management services, please contact us at (866) or via at Item 9 Disciplinary Information There are no legal, regulatory or disciplinary events involving JSPM or any of its employees. JSPM and its advisory personnel value the trust you place in us. As we advise all Clients, we encourage you to perform the requisite due diligence on any advisor or service provider in which you partner. Our backgrounds are on the Investment Adviser Public Disclosure website at To review the firm information contained in ADV Part 1, select the option for Investment Adviser Firm and enter in the field labeled Firm IARD/CRD Number. This will provide access to Form ADV Parts 1 and 2. Item 11 of the ADV Part 1 lists legal and disciplinary questions. You may also research the background of Ryan D. Morse by selecting the Investment Adviser Representative and entering Mr. Morse s Individual CRD# in the field labeled Individual CRD Number. Item 10 Other Financial Industry Activities and Affiliations Insurance Agency Affiliations Mr. Morse, President of JSPM, may serve as sales agent for various insurance companies. This activity is done separate and apart from his role with the JSPM. As an insurance agent, Mr. Morse may receive customary commissions and other related revenues from the various insurance companies whose products are sold. Commissions generated by insurance sales do not offset regular advisory fees. This may cause a conflict of interest in recommending certain products of the insurance companies. Clients are under no obligation to implement any recommendations made by Mr. Morse or the Advisor. Page 11
12 National Futures Association (NFA) Affiliation JSPM has registered with the National Futures Association (NFA) under NFA ID# as a Commodity Trading Advisor (CTA) and Commodity Pool Operator (CPO). Mr. Morse maintains an active Series 3 National Commodities Futures Exam License with the National Futures Association (NFA). While JSPM does not currently manage a private investment fund, the firm does have plans to form and act as the general partner and principal investment advisor to at least one private investment fund in the near future, and will update this filing in accordance at that time. Other Business Activities Advisory Persons of JSPM have additional business activities that are separate from the services provided to Clients under the Advisor. Details are provided in each Advisory Person s Form ADV 2B below. Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading A. Code of Ethics JSPM has implemented a Code of Ethics that defines our fiduciary commitment to each Client. This Code of Ethics applies to all persons associated with JSPM. The Code of Ethics was developed to provide general ethical guidelines and specific instructions regarding our duties to you, our Client. JSPM and its personnel owe a duty of loyalty, fairness and good faith towards each Client. It is the obligation of JSPM associates to adhere not only to the specific provisions of the Code, but also to the general principles that guide the Code. The Code of Ethics covers a range of topics that may include; general ethical principles, reporting personal securities trading, reportable securities, initial public offerings and private placements, reporting ethical violations, distribution of the Code of Ethics, review and enforcement processes, amendments to Form ADV and supervisory procedures. JSPM has written its Code of Ethics to meet and exceed regulatory standards. To request a copy of our Code of Ethics, please contact us at (866) or via at B. Personal Trading with Material Interest JSPM allows our employees to purchase or sell the same securities that may be recommended to and purchased on behalf of Clients. JSPM does not act as principal in any transactions. In addition, the Advisor does currently not act as the general partner of a fund, or advise an investment company. JSPM does have plans to act as the general partner to a fund in the future, and will update this filing in accordance at that time. JSPM does not have a material interest in any securities traded in Client accounts. C. Personal Trading in Same Securities as Clients JSPM allows our employees to purchase or sell the same securities that may be recommended to and purchased on behalf of Clients. Owning the same securities we recommend (purchase or sell) to you presents a potential conflict of interest that, as fiduciaries, we must disclose to you and mitigate through policies and procedures. As noted above, we have adopted, consistent with Section 204A of the Investment Advisers Act of 1940, a Code of Ethics, which addresses insider trading (material non-public information controls) and personal securities reporting procedures. We have also adopted written policies and procedures to detect the misuse of material, non-public information. We may have an interest or position in certain securities, which may also be recommended to you. Depending on the strategy, time horizon and objectives of each individual Client as well as the current market conditions, in certain instances the Advisor may take a position in a security opposite of its Clients. In addition the Code of Ethics governs Gifts and Entertainment given by and provided to the Advisor, outside employment activities of employees, Employee reporting, sanctions for violations of the Code of Ethics, and records retention requirements for various aspects of the Code of Ethics. Page 12
13 D. Personal Trading at Same Time as Client While JSPM allows our employees to purchase or sell the same securities that may be recommended to and purchased on behalf of Clients, these trades do not occur at the same time. JSPM will place trades only after Client orders have been placed and filled. At no time, will JSPM or any associated person of JSPM, transact in any security to the detriment of any Client. Item 12 Brokerage Practices A. Recommendation of Custodian[s] JSPM does not have discretionary authority to select the broker-dealer/custodian for custodial and execution services or the administrator for defined contribution accounts. The Client will select the broker-dealer or custodian (herein the "custodian") to safeguard Client assets and authorize JSPM to direct trades to this custodian as agreed in the Investment Advisory Agreement. Further, JSPM does not have the discretionary authority to negotiate commissions on behalf of our Clients on a trade-by-trade basis. Where JSPM does not exercise discretion over the selection of the custodian, it may recommend the custodian[s] to Clients for execution and/or custodial services. JSPM generally recommends Interactive Brokers, LLC ( IB ), a custodian in which the Advisor has access to the IB Institutional Platform. Clients are not obligated to use the recommended custodian and will not incur any extra fee or cost associated with using a broker not recommended by JSPM. JSPM may recommend a custodian based on criteria such as, but not limited to, reasonableness of commissions charged to the Client, services made available to the Client, and location of the custodian s offices. JSPM does not receive research services, other products, or compensation as a result of recommending a particular broker that may result in the Client paying higher commissions than those obtainable through other brokers. Following are additional details regarding the brokerage practices of the Advisor: 1. Soft Dollars - Soft dollars are revenue programs offered by broker-dealers whereby an advisor enters into an agreement to place security trades with the broker in exchange for research and other services. JSPM does not participate in soft dollar programs sponsored or offered by any broker-dealer. 2. Brokerage Referrals - JSPM does not receive any compensation from any third party in connection with the recommendation for establishing a brokerage account. 3. Directed Brokerage - All Clients are serviced on a directed brokerage basis, where JSPM will place trades within the established account[s] at the custodian designated by the Client. Further, all Client accounts are traded within their respective brokerage account[s]. The Advisor will not engage in any principal transactions (i.e., trade of any security from or to the Advisor s own account) or cross transactions with other Client accounts (i.e., purchase of a security into one Client account from another Client s account[s]). In selecting the custodian, JSPM will not be obligated to select competitive bids on securities transactions and does not have an obligation to seek the lowest available transaction costs. These costs are determined by the designated custodian. B. Aggregating and Allocating Trades The primary objective in placing orders for the purchase and sale of securities for Client accounts is to obtain the most favorable net results taking into account such factors as 1) price, 2) size of order, 3) difficulty of execution, 4) confidentiality and 5) skill required of the broker. JSPM will execute its transactions through an unaffiliated broker-dealer selected by the Client. JSPM may aggregate orders in a block trade or trades when securities are purchased or sold through the same broker-dealer for multiple (discretionary) accounts. If a block trade cannot be executed in full at the same price or time, the securities actually purchased or sold by the close of each business day must be allocated in a manner that is consistent with the initial pre-allocation or other written Page 13
14 statement. This must be done in a way that does not consistently advantage or disadvantage particular Client accounts. Item 13 Review of Accounts A. Frequency of Reviews Accounts are monitored on a regular and continuous basis by Mr. Morse, President of JSPM. Formal reviews are generally conducted at least quarterly or more or less frequently depending on the needs of the Client. B. Causes for Reviews In addition to the investment monitoring noted in Item 13.A., each Client account shall be reviewed at least annually. Reviews may be conducted more or less frequently at the Client s request. Accounts may be reviewed as a result of major changes in economic conditions, known changes in the Client s financial situation, and/or large deposits or withdrawals in the Client s account. The Client is encouraged to notify JSPM if changes occur in his/her personal financial situation that might adversely affect his/her investment plan. Additional reviews may be triggered by material market, economic or political events. C. Review Reports The Client will receive brokerage statements no less than quarterly from the trustee or custodian. These brokerage statements are sent directly from the custodian to the Client. The Client may also establish electronic access to the custodian s website so that the Client may view these reports and their account activity. Client brokerage statements will include all positions, transactions and fees relating to the Client s account[s]. The Advisor will provide year-end performance and tax reporting and may provide additional reports on request. Item 14 - Client Referrals and Other Compensation A. Compensation Received by JSPM JSPM is a fee-only advisory firm, who, in all circumstances, is compensated solely by the Client. JSPM does not receive commissions or other compensation from product sponsors, broker dealers or any un-related third party. JSPM may refer Clients to various third-parties to provide certain financial services necessary to meet the goals of its Clients. Likewise, JSPM may receive referrals of new Clients from a third-party. B. Client Referrals from Solicitors JSPM does not engage paid solicitors for Client referrals. Item 15 Custody JSPM does not accept or maintain custody of any Client accounts. All Clients must place their assets with a qualified custodian. Clients are required to select their own custodian to retain their funds and securities and direct JSPM to utilize that custodian for the Client s security transactions. JSPM encourages Clients to review statements provided by account custodian. For more information about custodians and brokerage practices, see Item 12 - Brokerage Practices. Item 16 Investment Discretion JSPM generally has discretion over the selection and amount of securities to be bought or sold in Client accounts without obtaining prior consent or approval from the Client. However, these purchases or sales may be subject to specified investment objectives, guidelines, or limitations previously set forth by the Client and agreed to by JSPM. Discretionary authority will only be authorized upon full disclosure to the Client. The granting of such authority Page 14
15 will be evidenced by the Client's execution of an Investment Advisory Agreement containing all applicable limitations to such authority. All discretionary trades made by JSPM will be in accordance with each Client's investment objectives and goals. Item 17 Voting Client Securities JSPM does not accept proxy-voting responsibility for any Client. Clients will receive proxy statements directly from the Custodian. The Advisor will assist in answering questions relating to proxies, however, the Client retains the sole responsibility for proxy decisions and voting. Item 18 Financial Information Neither JSPM, nor its management has any adverse financial situations that would reasonably impair the ability of JSPM to meet all obligations to its Clients. Neither JSPM, nor any of its advisory persons, has been subject to a bankruptcy or financial compromise. JSPM is not required to deliver a balance sheet along with this Brochure as the firm does not collect advance fees for services to be performed six months or more in advance. Item 19 Requirements for State Registered Advisors A. Educational Background and Business Experience of Principal Officer The President of JSPM is Ryan D. Morse. Information regarding the formal education and background of Mr. Morse is included in Item 2 of Part 2B below. B. Other Business Activities of Principal Officer Mr. Morse has additional business activities that are detailed in Item 10 - Other Financial Activities and Affiliations. C. Performance Fee Calculations JSPM may receive a Performance Fee based upon any gains obtained in the accounts of Qualified Clients. Performance-based compensation may create an incentive for the Advisor to recommend an investment that may carry a higher degree of risk to the Client. Please see Item 6 Performance Fees for additional information. D. Disciplinary Information There are no legal, civil or disciplinary events to disclose regarding JSPM or Mr. Morse. Neither JSPM nor Mr. Morse has ever been involved in any regulatory, civil or criminal action. There have been no client complaints, lawsuits, arbitration claims or administrative proceedings against JSPM or Mr. Morse. Securities laws require an advisor to disclose any instances where the advisor or its advisory persons have been found liable in a legal, regulatory, civil or arbitration matter that alleges violation of securities and other statutes; fraud; false statements or omissions; theft, embezzlement or wrongful taking of property; bribery, forgery, counterfeiting, or extortion; and/or dishonest, unfair or unethical practices. As previously noted, there are no legal, civil or disciplinary events to disclose regarding JSPM or Mr. Morse. E. Material Relationships with Issuers of Securities Neither JSPM nor Mr. Morse has any relationships or arrangements with issuers of securities. Page 15
16 Form ADV Part 2B Brochure Supplement for Ryan D. Morse, CMT, CFP President Effective: March 10, 2015 This Brochure Supplement provides information about the background and qualifications of Ryan D. Morse (CRD# ) in addition to the information contained in the ( JSPM or the Advisor - CRD #164487) Disclosure Brochure. If you have not received a copy of the Disclosure Brochure or if you any questions about the contents of the JSPM Disclosure Brochure or this Brochure Supplement, please contact us at (866) or by at Additional information about Mr. Morse is available on the SEC s Investment Adviser Public Disclosure website at Page 16