Services
Gimbal Financial, LLC (“Gimbal”, we” or “our”) became registered as an investment
advisor in 2011 and is owned by Keith A. Tyner and Douglas A. Shrieve. Gimbal offers
discretionary asset management services through a program account (the “Program”)
based on the individual needs of clients (“client”, “you” or “your”). We will determine your
financial goals and objectives through discussions and completion of a questionnaire. The
investment objective you select (e.g., growth with income, growth, or aggressive growth)
will guide us in managing your account. In the Program we provide management services
using a variety of investment types, including but not limited to, individual equities, fixed
income securities, exchange traded funds (“ETF”), no-load and load-waived mutual funds,
structured products, and cash and cash equivalents.
For Gimbal to manage your assets, you will be required to establish a Program account in
your name at an approved and qualified custodian. We can assist you with this process.
The custodian provides clearing, custody and other services for accounts established
through the Program. You will retain all rights of ownership of your account, including the
right to withdraw securities or cash, vote proxies, and receive transaction confirmations. In
addition, you can impose restrictions on investing in certain securities or types of securities
at the time you open the account.
To hire us to provide management services, you will be asked to enter into a written
investment advisory agreement with us. This agreement will set forth the terms and
conditions of our relationship, including the amount of your investment advisory fee. You
will also be asked to complete an account application with the custodian.
Fees
In a Program account, the client pays a single annual advisory fee for advisory services
and execution of transactions. The advisory fee is negotiable between the client and
Gimbal and is set out in the written investment advisory agreement. Fees are negotiable
and differ based upon a number of factors including pre-existing or employee relationships,
the nature of services to be provided, types of investments, portfolio makeup, whether the
client has elected to receive electronic delivery or mailed copies of custodian account
statements, and/or the complexity of the client’s situation. In addition, assets in related
accounts may be aggregated to establish the amount upon which advisory fees will be
based.
The advisory fee is based on a percentage of the market value of your account, including
cash holdings, according to the schedule below. Advisory fees are billed monthly in arrears
and calculated by Gimbal based on the account’s average daily value during the month.
Instructions are provided to the custodian to deduct the advisory fee from your account.
Market Value of Accounts Advisory Fee
$0 - $999,999 1.25%
$1,000,000 - $1,999,999 1.00%
$2,000,000 - $4,999,999 0.90%
$5,000,000 + Negotiable
The advisory fee may be higher than the fee charged by other investment advisors for
similar services. The advisory fee is paid to Gimbal and is shared between Gimbal and its
advisory representatives. Gimbal does not accept performance-based fees for Program
accounts.
Gimbal has established an institutional relationship with a qualified custodian based on the
scope of business Gimbal engages in with the custodian, including the aggregate value of
Gimbal’s client assets with the custodian. While clients do not pay transaction charges for
trades in Program accounts, clients should be aware that Gimbal pays transaction charges
to the custodian under certain circumstances. The transaction charges to Gimbal range
from $0 to $30 and vary based on Gimbal’s overall relationship with the custodian, the type
of security (e.g., equity, ETF, mutual fund, etc.) being purchased or sold, whether the
custodian receives other compensation directly from the product provider (e.g., mutual
fund, ETF, or variable annuity), and whether the client elects to receive electronic delivery
or mailed copies of custodian account statements (e.g., transaction charges apply for
some security types if client’s household account is below the custodian’s criteria). We will
provide you with a schedule of transaction charges upon account opening and as
amended by the custodian from time to time. The fact that Gimbal pays the transaction
charges presents a conflict of interest as Gimbal has a financial incentive not to place a
transaction in your account if Gimbal incurs a transaction charge. It also presents a
conflict of interest in that Gimbal may consider the amount of anticipated transaction
charges in determining the amount of the advisory fee to charge to clients.
Clients should also be aware that Gimbal pays the custodian an asset-based fee for
services such as transaction costs, fee deduction services, and other administrative
processing and support services. This presents an incentive for Gimbal to recommend
that you use a specific custodian and executing broker/dealer for your Program account so
that Gimbal retains favorable asset-based pricing. We believe this arrangement benefits
you because you do not pay transaction charges. As a result, we believe that using the
recommended custodian to execute transactions for your account is consistent with our
duty to obtain best execution. The existence of an asset-based fee also presents a conflict
of interest in that Gimbal may consider the amount of this asset-based fee in determining
the amount of the advisory fee to charge clients.
You should also be aware that in certain circumstances the custodian will receive other
types of compensation from third parties such as mutual fund, money market, and variable
annuity product providers, including but not limited to, revenue sharing, networking fees,
transfer agent fees or other fees based on asset balances in Program accounts. The
custodian may also impose markups or markdowns on fixed income transactions. Gimbal
does not receive any portion of these fees.
Other Important Considerations
In certain circumstances, clients will incur certain charges imposed by the custodian and/or
other third parties in connection with investments made through a Program account
depending upon the type of investments made. Gimbal does not receive
any portion of
these fees. The fees and charges include, but are not limited to, the following:
1. Mutual funds – mutual fund 12b-1 fees, mutual fund management fees and
administrative expenses, mutual fund transaction fees and redemption
charges (if applicable) and deferred sales charges on previously purchased
mutual funds transferred into the account.
2. ETFs – fund management fees and expenses
3. Variable annuities – mortality, expense and administrative charges, fees for
additional riders purchased by you on the contract, and charges for
excessive transfers within a calendar year if imposed by the variable annuity
sponsor.
4. Certain retirement accounts – administrative servicing fees for trust
accounts
5. Certain trust accounts – administrative servicing fees for trust accounts
6. Sweep money market funds and cash balances – 12b-1 fees or other fees
based on average daily deposit balances
7. Custodian service fees – fees imposed by the custodian for specific
additional services requested by the client (e.g., wire fees, overnight check
fees, check reorder fees, retirement account termination fees, etc.)
8. Other charges required by law and imposed by the executing broker/dealer
and custodian
The advisory fee is an ongoing wrap fee for investment advisory services, the execution of
transactions and other administrative and custodial services. The advisory fee may cost
the client more than purchasing the program services separately, for example, paying an
advisory fee plus commissions for each transaction in the account. Factors that bear upon
the cost of the account in relation to the cost of the same services purchased separately
include the type and size of the account, historical and or expected size or number of
trades for the account, and number and range of supplementary advisory and client-
related services provided to the client.
The advisory fee also may cost the client more than if assets were held in a traditional
brokerage account. In a brokerage account, a client is charged a commission for each
transaction, and the representative has no duty to provide ongoing advice with respect to
the account. If the client plans to follow a buy and hold strategy for the account or does not
wish to purchase ongoing investment advice or management services, the client should
consider opening a brokerage account rather than a Program account.
The investment products available to be purchased in the program can be purchased by
clients outside of a Program account, through investment firms not affiliated with Gimbal.
Within the Program account, Gimbal uses mutual funds that the custodian makes available
within their custodial platform. Mutual funds may offer multiple classes of shares for
purchase in a fee-based investment advisory program. In certain instances, a mutual fund
may offer only class A shares, but another similar mutual fund may be available that offers
an institutional or fee-based advisory share class.
When a Program account purchases class A shares, the custodian receives from the
mutual fund a portion of the 12b-1 fees charged by the mutual fund. Gimbal does not
receive any portion of these 12b-1 fees. Institutional or fee-based advisory share classes
generally are not subject to 12b-1 fees. It is generally more expensive for a client to own
class A shares than an institutional or fee-based advisory share class. An investor in an
institutional or fee-based advisory share class will pay lower fees over time and keep more
of his or her investment returns than an investor who holds class A shares of the same
fund. Gimbal takes care to identify the least expensive share class to the client. However,
clients should understand that in certain circumstances the share class offered for a
particular mutual fund through the Program will not be the least expensive share class that
the mutual fund makes available. In an advisory program, the appropriateness of a
particular mutual fund share class should be determined based on a variety of different
considerations, including but not limited to: the advisory fee that is charged; whether
transaction charges are applied and the amount of the transaction charges applied to the
purchase or sale of mutual funds; the anticipated frequency of transactions; the holding
period for the mutual funds; the overall cost structure of the advisory program; share class
eligibility or minimum requirements; and potential tax consequences.
ERISA and Retirement Accounts
If client is a qualified plan subject to the Employee Retirement Income Security Act of 1974
(ERISA) or a plan within the meaning of Section 4975(e) of the Internal Revenue Code of
1986 (the Code), Gimbal is acting as a fiduciary under ERISA as defined in Section (21) of
ERISA or Section 4975 of the Code with respect to services listed in Item 4 of this
Brochure.
There is a conflict of interest for individuals that currently invest in an employer-sponsored
retirement plan or individual retirement account that are considering a roll out of assets
from the retirement plan or account. A conflict of interest exists because Gimbal will be
compensated only if the individual rolls over the proceeds into an IRA that is then
managed by Gimbal. As a result, it can be construed that Gimbal has a financial incentive
to recommend a rollover. Client should understand that Gimbal maintains an education-
only policy with respect to client rollovers. Gimbal will not make a recommendation; the
client is solely responsible for all decisions. Therefore, the individual should include in
his/her decision making process, a thorough review of all options; for example (i) remain
invested in the current retirement plan or account (if available), (ii) transfer assets to a new
employer-sponsored retirement plan (if available), (iii) transfer assets to an IRA with a
financial institution, or (iv) withdraw assets directly which would be subject to federal and
applicable state and local taxes and possibly subject to an IRS penalty depending upon
the age of the individual. Individuals are encouraged to consider the advantages and
disadvantages of each option, including any applicable fees and all features of each
option. A decision to roll over assets to an IRA should reflect consideration of various
factors, the importance of which will depend on the individual’s needs and circumstances.