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Item 1
Cover Page
Part
2A of Form ADV
Firm
Brochure
1275
Shiloh Rd, Ste.
303
Kennesaw,
GA 30144
Tricord
Investment
Advisors, Inc.
Phone:
(404) 890-5588
Date: March 31, 2011
This brochure provides information about the
qualifications
and business practices of Tricord Investment Advisors, Inc. If you have any questions about the contents
of this brochure, please contact us at (404) 890-5588.
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
Tricord Investment Advisors,
Inc. is available on the SEC’s website at www.adviserinfo.sec.gov
Please note that registration as an
investment advisory firm
does not imply a certain level of skill or training.
Item 2
Material
Changes
There
are no material changes to our Form ADV at this time.
Item 3 Table
of Contents
Item 1
Cover Page . 1
Item 2 Material Changes. 1
Item 3
Table of
Contents. 3
Item 4
Advisory
Business. 4
Item 5
Fees and
Compensation. 4
Item 6
Performance-Based Fees and Side-by-Side Management. 5
Item 7
Types of
Clients. 6
Item 8
Methods of
Analysis, Investment Strategies and Risk of
Loss. 6
Item 9
Disciplinary
Information. 7
Item 10
Other Financial Industry
Activities and Affiliations. 7
Item 11 Code of Ethics, Participation or
Interest in Client
Transactions and Personal Trading. 7
Item 12
Brokerage Practices. 8
Item 13
Review of Accounts. 8
Item 14 Client Referrals and Other
Compensation. 9
Item 15
Custody. 9
Item 16
Investment Discretion. 9
Item 17
Voting Client Securities. 9
Item 18
Financial Information. 9
Item 19 Requirements for State-Registered
Advisers. 9
Brochure Supplement. 10
Item 1
Cover Page. 10
Item 2
Educational
Background and Business Experience. 10
Item 3
Disciplinary
Information. 10
Item 4
Other
Business Activities. 10
Item 5
Additional
Compensation. 10
Item 6
Supervision. 10
Item
4 Advisory
Business
About the Firm
Tricord
Investment Advisors, Inc. is a registered investment advisor
offering investment supervisory services and financial planning.
We
began business in 2005. Our owner is Lawrence McDonald.
Description of Advisory Services
Investment
Supervisory Services
We
provide discretionary portfolio management services where the
investment advice
provided is tailored to meet your needs and investment objectives.
Subject
to any written restrictions, which you may provide, we will be granted
discretion and authority to manage the account.
Accordingly, we are authorized to perform various
functions, at your
expense, without your further approval. Such functions include the
determination of securities to be purchased/sold and the amount of
securities
to be purchased/sold. Once the portfolio
is constructed, we provide continuous supervision and re-optimization
of the
portfolio as changes in market conditions and client circumstances may
require.
We also offer an investment
supervisory service called the Buy-Write strategy which seeks to
provide
consistent income derived from selling put or call options that are
written
against a stock or LEAPS (Long Term Equity Anticipation Security)
positions.
We manage
client assets. As of December 31, 2010,
our discretionary assets under management were $9 Million.
Financial
Planning
Services
We
offer financial planning services, which are independent of any
asset management services. When offering
our financial planning services we work to develop financial strategies
tailored to fit your needs. These areas may include your assets and
liabilities, cash-flow, insurance coverage, retirement planning,
education
planning, estate planning, and investment planning. We discuss these
topics and
others with you to develop an assessment of your current and long-term
financial needs. Major emphasis is placed on identifying goals,
assessing
progress toward reaching those goals, and developing measures for
achieving
those objectives.
Continuing
services include, but are not limited to, reviewing and updating your
written
plan on a periodic basis to update the analysis and to determine if
additional
or alternative strategies need to be employed
by you.
SubAdvisory
Services
We
offer subadvisory services to other investment advisory firms. When
doing so, we will have investment discretion for the other advisory
firm's
clients. The advice we give to these
clients may be similar or identical to the advice we give you.
Item
5 Fees
and Compensation
Fees
for Investment
Supervisory Services
The fee
for these services is calculated and payable monthly or
daily in advance and is based on the following rate schedule:
On the first $500,000 of assets under management:
1.50% per year
Portion
$500,001 - $1,000,000 under management:
1.00% per year
Portion
$1,000,001 - $5,000,000 under management:
.75% per year
Portion
over $5,000,001 under management:
To be negotiated
Fees
for Investment Supervisory services are paid either monthly
in advance or daily in arrears and are debited directly from your
account. The
initial billing for these investment supervisory services includes a
pro-rata
fee for the balance of the current month. Thereafter, your account will
be
debited at the beginning of each billing period. We refund any pre-paid
advisory fees for accounts terminated mid-quarter. You must notify us
of the
account termination to receive this refund. We calculate the amount
owed to you
based upon the number of days remaining in the month.
Fees
for Financial
Planning Services
We may
furnish investment analysis and advice through
consultations on an hourly basis, which would be billed at the rate of
$135 per
hour. You may also receive consultation regarding financial topics not
involving investments. This financial planning service is provided on
an hourly
basis, with the appropriate charges being the following: Financial
Analysis and
Consultation: $135 per hour; Administrative Services (such as typing,
collating, or computer assistance): $18 per hour. We may also offer
financial
planning services on a fixed fee basis.
The fee for this service depends on the complexity of the
client’s
situation and typically ranges from $1,000 to $3,000.
Fees
for SubAdvisory
Services
For providing subadvice, we are
compensated by third party adviser by a portion of the investment
advisory
fee.
Other
Information about Expenses
Our
advisory fees are negotiable, at our discretion.
In
addition to the advisory fee listed above, there may be an
annual platform fee per account charged by the custodian. This fee will
be
billed along with any transaction costs associated with the purchase
and sale
of securities in the account, and any charges
or expenses resulting from maintenance of the account. Any fees billed
to
Tricord will be charged as a pass through reimbursable expense. These
fees are
subject to change as dictated by the custodian.
Mutual
funds and exchange traded funds have operating expenses
which include a fee paid to an investment manager or management team.
Clients
using mutual funds incur such fees, although these fees are internal to
the
operation of mutual funds and are not separately billed to the client.
Termination
Termination
of this service may be accomplished, for any reason,
by either party giving written notice to the other. Notice given by the
client
is effective upon receipt by the firm. You have the right to terminate
our
services within five days of signing the client agreement. If you so,
you will
receive a refund of all pre-paid fees.
Notice
given by the firm is effective thirty days after receipt by
the client. In the event of termination, the regular management fee is
refunded
pro-rata from the date of termination to the date to which service has
been
prepaid.
Item
6 Performance-Based
Fees and
Side-by-Side
Management
We
do not accept performance-based fees.
Item
7 Types
of Clients
We
work with individuals, high net worth individuals, other businesses
and other registered investment advisors. We have a minimum
account size of $50,000 for clients who wish to work
with us. That amount is negotiable.
Item
8 Methods
of Analysis, Investment
Strategies and
Risk of Loss
We
may use the following methods of security analysis:
- Charting
- (analysis performed using
patterns to identify current trends and trend reversals to forecast the
direction of prices)
- Fundamental
- (analysis performed on historical and present data, with the goal of
making financial forecasts)
- Technical
– (analysis performed on historical and present data, focusing on
price and trade volume, to forecast the direction of prices)
We
may use the following investment strategies when implementing
investment advice given to clients:
- Long
Term Purchases (securities held at least a year)
- Short
Term Purchases (securities sold within a year)
- Trading
(securities sold within thirty (30) days)
- Options
(contract for the purchase or sale of a security at a predetermined
price during a specific period of time)
Our
methods of analysis and investment strategies do not present any
significant or unusual risks.
Our
primary investment strategies - Long Term Purchases, Short Term
Purchases, and Trading - are fundamental investment strategies.
However, every
investment strategy has its own inherent risks and limitations. For
example,
longer term investment strategies require a longer investment time
period to
allow for the strategy to potentially develop. Shorter term investment
strategies require a shorter investment time period to potentially
develop but,
as a result of more frequent trading, may incur higher transactional
costs when
compared to a longer term investment strategy. Trading, an investment
strategy
that requires the purchase and sale of securities within a thirty (30)
day
investment time period, involves a very short investment time period
but will
incur higher transaction costs when compared to a short term investment
strategy and substantially higher transaction costs than a longer term
investment strategy.
In
addition to the fundamental investment strategies discussed above, we
may also implement and/or recommend options transactions. Option
transactions
have a high level of inherent risk. (See discussion below).
The
use of options transactions as an investment strategy may involve
a high level of inherent risk. Option transactions establish a contract
between
two parties concerning the buying or selling of an asset at a
predetermined
price during a specific period of time. During the term of the option
contract,
the buyer of the option gains the right to demand fulfillment by the
seller.
Fulfillment may take the form of either selling or purchasing a
security
depending upon the nature of the option contract. Generally, the
purchase or
the recommendation to purchase an option contract by the Registrant
shall be
with the intent of producing income or offsetting/”hedging”
a potential market
risk in a client’s portfolio. Please Note: Although the intent of the options-related
transactions we implement is to produce income or hedge against
principal risk,
certain of the options-related strategies (i.e. straddles, short
positions,
etc), may produce principal volatility and/or risk. You must be willing
to
accept these enhanced volatility and principal risks associated with
such
strategies. In light of these enhanced risks, client may direct
us, in
writing, not to employ any or all such strategies for your accounts.
We
primarily allocate client
investment assets among various individual equity (stocks), debt
(bonds) and
fixed income securities, mutual funds, and exchange traded funds on a
discretionary basis, consistent with the client’s designated
objectives. We may
also engage in option strategies.
Item
9 Disciplinary
Information
Neither
we nor any of our management persons have been involved in any
events that are material to a client’s or prospective
client’s evaluation of
the Firm or the integrity of its management.
Item
10 Other
Financial Industry
Activities and Affiliations
Mr.
McDonald is the owner of L-J Financial Associates, Inc.(LJFA),Kennesaw,
GA.
LJFA is a life and health insurance, and employee benefits firm. If you purchase insurance or employee
benefits from him, he will receive compensation.
These activities create a conflict of
interest in that Mr. McDonald has a financial incentive to recommend
additional
products or services to you. We address these conflicts by doing the
following:
We must disclose any potential or
actual conflicts of interest when dealing with clients.
We are subject to the following
specific obligations when dealing with clients:
o
The
duty to have a reasonable, independent basis for its investment advice;
o
The
duty to ensure that investment advice is suitable to meeting the
client’s
individual objectives, needs, and circumstances; and,
o
A
duty to be loyal to clients.
Item
11 Code of
Ethics, Participation or
Interest in Client
Transactions and Personal Trading
Associated
persons may buy or sell for their own accounts the same
securities recommended to you. They may
do so at the same time as they, or a related person, buy or sell the
same
securities for their own account.
Associated persons seek to ensure that they do not
personally benefit
from the short-term market effects of their recommendations to you. We request information about all of our
associate's transactions and monitor them for any wrongdoing.
Associated
persons are aware of the rules regarding material
non-public information and insider trading. Associated persons may also
buy or
sell a specific security for their own account based on personal
investment
considerations, which the Advisor does not deem appropriate to buy or
sell for
clients.
We
have adopted a Code of Ethics to instruct its personnel in their
ethical obligations and to provide rules for their personal securities
transactions. The Firm and our personnel owe a duty of loyalty,
fairness and
good faith to their clients, and the obligation to adhere not only to
the
specific provisions of the code but also to the general principles that
guide
the Code. The Code covers a range of
topics including general ethical principles, reporting personal
securities
trading, exceptions to reporting securities trading, reportable
securities,
initial public offerings and private placements, reporting ethical
violations,
distribution of the Code, review and enforcement processes, amendments
to Form
ADV and supervisory procedures. We will
provide a copy of the Code to any client or prospective Client upon
request.
Item
12 Brokerage
Practices
We
do not receive any research or other products or services other
than execution from a broker-dealer or third party in connection with
your
securities transactions. Nor do we receive any client referrals from a
broker-dealer or third party.
Client accounts are established
either at
FolioFn or Interactive Brokers. The FolioFn platform allows for
customized
individual equity sector basket holdings employed primarily in sector
rotation
and dynamic asset allocation strategies, and are traded in two daily
window
trades. All platforms are utilized to minimize the transaction costs to
the
client. Clients should note that the
transaction costs associated with each platform vary and they are the
responsibility of the Client. Not all advisers will recommend a
custodian.
Not
every adviser will require you to use a particular custodian.
We
permit block trading when the following conditions are met:
Orders
of two or more clients may be bunched only if we have
determined, on an individual basis that the securities order is:
1.
In the best
interests of each client participating in the order;
2.
Consistent with our
duty to obtain best execution; and
3.
Consistent with the
terms of the investment advisory agreement of each participating client.
Where
conducting a block trade, we will determine the accounts that
will participate, and the specific allocations in advance of the
transaction.
If the entire order is filled, you will receive your portion of the
allocation
specified on the trade ticket. All allocations are prior to the close
of
business on trade date. Client accounts participating in the
transaction will
receive the weighted average price of the security and will incur a
pro-rata
share of the transaction cost.
If
part of the order is unfilled, the allocation is based on a
pro-rata share per client.
Our
books and records separately reflect, for each client for whom an
order is bunched, the securities held by, purchased, and sold for that
client.
Item
13 Review of
Accounts
Clients who have contrated for ongoing
financial planning services receive
annual reviews, if they so desire.
However, if circumstances dictate, your situation will be
reviewed as
often as required. As part of the
overall investment management service, there
is a continuing evaluation of the investments used in accounts.
Investment
management accounts are
reviewed monthly to determine if each investment continues to be
appropriate
and if there are any changes in the client's circumstances which would
alter
the choice of investments. Periodic
reviews of the goals and circumstnaces
of investment management clients are conducted as often as necessary. You are encouraged to have such reviews done
on an at least annual basis
Financial planning clients receive a written
financial plan analysis. Updated analysis
reports are provided as
dictated by the individual client's situation.
Investment management clients receive quarterly reports.
Item 14
Client
Referrals and Other Compensation
We may enter into arrangements
with individuals (“Solicitor”) whereby the Solicitor will
refer clients who may
be a candidate for investment advisory services to us.
In return, we will agree to compensate the
Solicitor for the referral. Compensation
to the Solicitor is dependent on the client entering into an advisory
agreement
with us for advisory services.
Compensation to solicitor
will be an agreed upon percentage of our advisory fee.
The solicitation/referral fee is paid
pursuant to a written agreement retained by us and the solicitor. The Solicitor will be required to provide the
client with a copy of the Applicant’s Form ADV Part 2 and a
Solicitor
Disclosure brochure prior to or at the time of entering into any
investment
advisory contract with Applicant.
Solicitor is not permitted to offer clients any investment
advice on
behalf of Applicant.
Item 15
Custody
We have custody of client
funds in that we deduct fees from your accounts. The
unaffiliated qualified custodian of your
assets sends quarterly statements directly to you.
You should carefully review those statements.
Item 16
Investment
Discretion
We require that you give us
discretionary authority to manage your accounts by signing our advisory
agreement. You may place reasonable
restrictions on the types of securities or on specific securities that
we may
purchase or sell.
Item 17
Voting
Client Securities
We will vote proxies on your behalf. We
typically vote as recommended by
management, unless we feel
there is reason not to do so. We have
adopted and implemented
policies and
procedures that we believe are reasonably
designed to ensure that proxies are voted in the best interest of clients, in accordance with our
fiduciary duties.
Item 18
Financial
Information
We have no financial
condition that is reasonably likely to impair our ability to meet
contractual
commitments to you.
Item 19
Requirements
for State-Registered Advisers
The below information is
given for our management person, Lawrence McDonald.
Tricord’s
investment policies are determined by Lawrence J.
McDonald, Jr., who has been the President of Tricord since its
inception. Mr. McDonald has a BAET degree
from Southern
Technical Institute, and has served as an investment advisor to clients
since 1995. He has also completed several
courses
required for the Certified Financial Planner designation.
Mr. McDonald was associated with USAllianz
Securities, Inc. as an investment adviser representative and registered
representative from January 2001 through July 2005.
Prior to his association with USAlliance, he
worked with Fortis Investors, Inc. in the same capacity from March 1999
through
December 2000.
Brochure
Supplement
Part 2B of Form ADV
Lawrence McDonald
1275 Shiloh Rd., Ste 303
Kennesaw, GA 30144
Tricord Investment Advisors,
Inc.
Phone: (404) 890-5588
Date: March 31, 2011
Item 1
Cover Page
This
brochure supplement provides information about Lawrence McDonald
that supplements our Disclosure Brochure.
Please contact us at (404) 890-5588if you did not receive
Tricord
Investment Advisors, Inc.'s brochure or if you have any questions about
the
contents of this supplement.
Item 2
Educational Background and Business
Experience
Tricord’s
investment policies are determined by
Lawrence J. McDonald, Jr., who has been the President of Tricord since
its
inception. Mr. McDonald has a BAET
degree from Southern Technical Institute, and has served as an
investment
advisor to clients since 1995. He has
also completed several courses required for the Certified Financial
Planner
designation. Mr. McDonald was associated
with USAllianz Securities, Inc. as an investment adviser representative
and
registered representative from January 2001 through July 2005. Prior to his association with USAlliance, he
worked with Fortis Investors, Inc. in the same capacity from March 1999
through
December 2000.
Item 3
Disciplinary Information
Mr.
McDonald is not subject to any material legal or disciplinary
event.
Item 4
Other Business Activities
Please
see item 10 of our firm brochure (attached) for more information
about our Other Business Activities.
Item 5
Additional Compensation
There
are no such issues to be disclosed.
Item 6
Supervision
Mr. McDonald is the sole advisory
representative and President of
Tricord Investment Advisors, Inc. He supervises himself. If you have
any
concerns or questions, please contact him at
(404) 890-5588.
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