A. Hicks Capital Management, LLC (“the Registrant”) is a limited liability company formed
on June 28, 2011 in the state of Ohio and has been registered as an investment advisor firm
since August of 2011. The Registrant is owned by Timothy D. Hicks. Mr. Hicks is also the
Registrant’s Managing Member.
B.
INVESTMENT ADVISORY SERVICES
The client can determine to engage the Registrant to provide discretionary and/or non-
discretionary investment advisory services on a fee basis. (See discussion below). If the
client determines to engage the Registrant on a fee basis the client will select individual
services on an unbundled basis, paying for each service separately (i.e. investment
advisory, brokerage, custody).
The Registrant's annual investment advisory fee shall include investment advisory services,
and, to the extent specifically requested by the client, financial planning and consulting
services. In the event that the client requires extraordinary planning and/or consultation
services (to be determined in the sole discretion of the Registrant), the Registrant may
determine to charge for such additional services, the dollar amount of which shall be set
forth in a separate written notice to the client.
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
To the extent requested by a client, the Registrant may determine to provide financial
planning and/or consulting services (including investment and non-investment related
matters, including estate planning, insurance planning, etc.) on a stand-alone separate fee
basis. Registrant’s planning and consulting fees are negotiable, but generally range from
$500 to $25,000 on a fixed fee basis, and from $75 to $500 on an hourly rate basis,
depending upon the level and scope of the service(s) required and the professional(s)
rendering the service(s).
Prior to engaging the Registrant to provide planning or consulting services, clients are
generally required to enter into a Financial Planning and Consulting Agreement with
Registrant setting forth the terms and conditions of the engagement (including
termination), describing the scope of the services to be provided, and the portion of the fee
that is due from the client prior to Registrant commencing services.
If requested by the client, Registrant may recommend the services of other professionals
for implementation purposes, including the Registrant’s Managing Member in his
individual capacity as a registered representative of a broker-dealer and/or licensed
insurance agent. (See disclosure at Item 10 C). The client is under no obligation to engage
the services of any such recommended professional. The client retains absolute discretion
over all such implementation decisions and is free to accept or reject any recommendation
from the Registrant.
If the client engages any such recommended professional, and a dispute arises thereafter
relative to such engagement, the client agrees to seek recourse exclusively from and against
the engaged professional.
Each client is advised that it remains the client’s responsibility to promptly notify the
Registrant if there is ever any change in client’s financial situation or investment objectives
for the purpose of reviewing, evaluating or revising Registrant’s previous
recommendations and/or services.
RETIREMENT CONSULTING
The Registrant may also provide non-discretionary consulting services to 401(k)s, defined
contribution and profit sharing plans, pursuant to which it assists plan sponsors with the
selection and/or monitoring of investment alternatives (generally open-end mutual funds)
from which plan participants shall choose in self-directing the investments for their
individual plan retirement accounts. In addition, to the extent requested by the plan
sponsor, the Registrant may also provide participant education designed to assist
participants in identifying the appropriate investment strategy for their retirement plan
accounts. The terms and conditions of the engagement shall generally be set forth in a
Retirement Plan Consulting Agreement between the Registrant and the plan sponsor.
MISCELLANEOUS
Limitations of Financial Planning and Non-Investment Consulting/Implementation
Services. As indicated above, to the extent requested by a client, Registrant may provide
financial planning and related consulting services regarding non-investment related
matters, such as estate planning, tax planning, insurance, etc. Registrant does not serve as
an attorney or accountant, and no portion of its services should be construed as legal or
accounting services. Accordingly, Registrant does not prepare estate planning documents
or tax returns. To the extent requested by a client, Registrant may recommend the services
of other professionals for certain non-investment implementation purpose (i.e. attorneys,
accountants, insurance agents, etc.), including representatives of Registrant in their
separate individual capacities as representatives of Purshe Kaplan Sterling (“PKS”), a
FINRA member broker-dealer or as a licensed insurance agents.
The client is under no obligation to engage the services of any such recommended
professional. The client retains absolute discretion over all such implementation decisions
and is free to accept or reject any recommendation from Registrant and/or its
representatives.
If the client engages any recommended unaffiliated professional, and a dispute arises
thereafter relative to such engagement, the client agrees to seek recourse exclusively from
and against the engaged professional.
Retirement Rollovers-Potential for Conflict of Interest: A client or prospective client
leaving an employer typically has four options regarding an existing retirement plan (and
may engage in a combination of these options): (i) leave the money in the former
employer’s plan, if permitted, (ii) roll over the assets to the new employer’s plan, if one is
available and rollovers are permitted, (iii) roll over to an Individual Retirement Account
(“IRA”), or (iv) cash out the account value (which could, depending upon the client’s age,
result in adverse tax consequences). If Registrant recommends that a client roll over their
retirement plan assets into an account to be managed by Registrant, such a recommendation
creates a conflict of interest if Registrant will earn new (or increase its current)
compensation as a result of the rollover. If Registrant provides a recommendation as to
whether a client should engage in a rollover or not, Registrant is acting as a fiduciary within
the meaning of Title I of the Employee Retirement Income Security Act and/or the Internal
Revenue Code, as applicable, which are laws governing retirement accounts. No client is
under any obligation to roll over retirement plan assets to an account managed by
Registrant.
Inverse/Enhanced Market Strategies. The Registrant may utilize long and short mutual
funds and/or exchange traded funds that are designed to perform in either an: (1) inverse
relationship to certain market indices (at a rate of 1 or more times the inverse [opposite]
result of the corresponding index) as an investment strategy and/or for the purpose of
hedging against downside market risk; and (2) enhanced relationship to certain market
indices (at a rate of 1 or more times the actual result of the corresponding index) as an
investment strategy and/or for the purpose of increasing gains in an advancing market.
There can be no assurance that any such strategy will prove profitable or successful. In
light of these enhanced risks/rewards, a client may direct the Registrant, in writing, not to
employ any or all such strategies for his/her/their/its accounts.
Private Investment Funds. The Registrant may provide investment advice regarding
unaffiliated private investment funds. The Registrant’s role relative to the private
investment funds shall be limited to its initial and ongoing due diligence and investment
monitoring services. If a client determines to become a private fund investor, the amount
of assets invested in the fund(s) shall be included as part of “assets under management” for
purposes of the Registrant calculating its investment advisory fee. Registrant’s clients are
under absolutely no obligation to consider or make an investment in a private investment
fund(s).
Private investment funds generally involve various risk factors, including, but not limited
to, potential for complete loss of principal, liquidity constraints and lack of transparency,
a complete discussion of which is set forth in each fund’s offering documents, which will
be provided to each client for review and consideration. Unlike liquid investments that a
client may maintain, private investment funds do not provide daily liquidity or pricing.
Each prospective client investor will be required to complete a Subscription Agreement,
pursuant to which the client shall establish that he/she is qualified for investment in the
fund, and acknowledges and accepts the various risk factors that are associated with such
an investment.
Valuation: In the event that the Registrant references private investment funds owned by
the client on any supplemental account reports prepared by Registrant, the value(s) for all
private investment funds owned by the client shall reflect the most recent valuation
provided by the fund sponsor. However, if subsequent to purchase, the fund has not
provided an updated valuation, the valuation shall reflect the initial purchase price. If
subsequent to purchase, the fund provides an updated valuation, then the statement will
reflect that updated value. The updated value will continue to be reflected on the report
until the fund provides a further updated value. As result of the valuation process,
if the
valuation reflects initial purchase price or an updated value subsequent to purchase price,
the current value(s) of an investor’s fund holding(s) could be significantly more or less
than the value reflected on the report. Unless otherwise indicated, the client’s advisory fee
shall be based upon the value reflected on the report.
Independent Managers. The Registrant may direct a certain portion of client assets to be
managed by 55ip, an unaffiliated investment adviser, who serves as sub-adviser. When
engaged on behalf of Registrant’s clients, 55ip is granted limited discretionary investment
authority over directed assets.
Through relationships with BlackRock and Fidelity, 55ip is able to offer its sub-advisory
services at little or no additional cost to the Registrant so long as models selected for client
management are approved by either BlackRock or Fidelity. Approved models will
generally include BlackRock or Fidelity products. This relationship creates a conflict of
interest, as the Registrant is incentivized to select approved models for client’s asset
management.
Non-Discretionary Service Limitations. Clients that determine to engage the Registrant
on a non-discretionary investment advisory basis must be willing to accept that the
Registrant cannot effect any account transactions without obtaining prior consent to any
such transaction(s) from the client. Thus, in the event of a market correction during which
the client is unavailable, the Registrant will be unable to effect any account transactions
(as it would for its discretionary clients) without first obtaining the client’s consent.
Use of Exchange Traded Funds: Most exchange traded funds are available directly to the
public. Thus, a prospective client can obtain many of the funds that may be utilized by
Registrant independent of engaging Registrant as an investment advisor. However, if a
prospective client determines to do so, he/she will not receive Registrant’s initial and
ongoing investment advisory services.
In addition to Registrant’s investment advisory fee described below, and transaction and/or
custodial fees discussed below, clients will also incur, relative to all mutual fund and
exchange traded fund purchases, charges imposed at the fund level (e.g. management fees
and other fund expenses).
Cash Positions. Registrant continues to treat cash as an asset class. As such, unless
determined to the contrary by Registrant, all cash positions (money markets, etc.) shall
continue to be included as part of assets under management for purposes of calculating
Registrant’s advisory fee. At any specific point in time, depending upon perceived or
anticipated market conditions/events (there being no guarantee that such anticipated market
conditions/events will occur), Registrant may maintain cash positions for defensive
purposes. In addition, while assets are maintained in cash, such amounts could miss market
advances. Depending upon current yields, at any point in time, Registrant’s advisory fee
could exceed the interest paid by the client’s money market fund.
Socially Responsible Investing Limitations. Socially Responsible Investing involves the
incorporation of Environmental, Social and Governance considerations into the investment
due diligence process (“ESG). There are potential limitations associated with allocating a
portion of an investment portfolio in ESG securities (i.e., securities that have a mandate to
avoid, when possible, investments in such products as alcohol, tobacco, firearms, oil
drilling, gambling, etc.). The number of these securities may be limited when compared to
those that do not maintain such a mandate. ESG securities could underperform broad
market indices. Investors must accept these limitations, including potential for
underperformance. Correspondingly, the number of ESG mutual funds and exchange
traded funds are few when compared to those that do not maintain such a mandate. As with
any type of investment (including any investment and/or investment strategies
recommended and/or undertaken by Registrant), there can be no assurance that investment
in ESG securities or funds will be profitable, or prove successful.
Cryptocurrency. For clients who want exposure to cryptocurrencies, including Bitcoin,
Registrant, will advise the client to consider a potential investment in corresponding
exchange traded securities or private funds that provide cryptocurrency exposure. Crypto
is a digital currency that can be used to buy goods and services, but uses an online ledger
with strong cryptography (i.e., a method of protecting information and communications
through the use of codes) to secure online transactions. Unlike conventional currencies
issued by a monetary authority, cryptocurrencies are generally not controlled or regulated
and their price is determined by the supply and demand of their market. Because
cryptocurrency is currently considered to be a speculative investment, Registrant will not
exercise discretionary authority to purchase a cryptocurrency investment for client
accounts. Rather, a client must expressly authorize the purchase of the cryptocurrency
investment. Registrant does not recommend or advocate the purchase of, or investment in,
cryptocurrencies. Registrant considers such an investment to be speculative. Clients who
authorize the purchase of a cryptocurrency investment must be prepared for the potential
for liquidity constraints, extreme price volatility and complete loss of principal.
Portfolio Activity. Registrant has a fiduciary duty to provide services consistent with the
client’s best interest. As part of its investment advisory services, Registrant will review
client portfolios on an ongoing basis to determine if any changes are necessary based upon
various factors, including, but not limited to, investment performance, fund manager
tenure, style drift, account additions/withdrawals, and/or a change in the client’s
investment objective. Based upon these factors, there may be extended periods of time
when Registrant determines that changes to a client’s portfolio are neither necessary nor
prudent. Of course, as indicated below, there can be no assurance that investment decisions
made by Registrant will be profitable or equal any specific performance level(s).
eMoney and ByAllAccounts – Account Aggregators. Registrant may provide its clients
with access to an online platform hosted by “eMoney Advisor” (“eMoney”) and/or
ByAllAccounts, together “Account Aggregators”. The Account Aggregators allow clients
to view their complete asset allocation, including those assets that Registrant does not
manage (the “Excluded Assets”). Registrant does not provide investment management,
monitoring, or implementation services for the Excluded Assets. Unless otherwise
specifically agreed to, in writing, Registrant’s service relative to the Excluded Assets is
limited to reporting only. Registrant shall not be responsible for the investment
performance of the Excluded Assets. Rather, the client and/or their advisor(s) that maintain
management authority for the Excluded Assets, and not Registrant, shall be exclusively
responsible for such investment performance.
Without limiting the above, the Registrant shall not be responsible for any implementation
error (timing, trading, etc.) relative to the Excluded Assets. The client may choose to
engage Registrant to manage some or all of the Excluded Assets pursuant to the terms and
conditions of an Investment Advisory Agreement between Registrant and the client.
Furthermore, the eMoney platform also provides access to other types of information and
applications including financial planning concepts and functionality, which should not, in
any manner whatsoever, be construed as services, advice, or recommendations provided
by Registrant. Registrant shall not be held responsible for any adverse results a client may
experience if the client engages in financial planning or other functions available on the
eMoney platform without Registrant’s assistance or oversight.
Trade Error Policy. Registrant shall reimburse accounts for losses resulting from the
Registrant’s trade errors, but shall not credit accounts for such errors resulting in market
gains. The gains and losses are reconciled within the Registrant’s custodian firm account
and Registrant retains the net gains and losses.
Client Obligations. In performing its services, Registrant shall not be required to verify
any information received from the client or from the client’s other professionals, and is
expressly authorized to rely thereon. Moreover, each client is advised that it remains their
responsibility to promptly notify the Registrant if there is ever any change in their financial
situation or investment objectives for the purpose of reviewing, evaluating or revising
Registrant’s previous recommendations and/or services.
Disclosure Statement. A copy of the Registrant’s written Brochure and Client
Relationship Summary, as set forth on Part 2 of Form ADV and Form CRS respectively,
shall be provided to each client prior to, or contemporaneously with, the execution of an
advisory agreement.
C. The Registrant shall provide investment advisory services specific to the needs of each
client. Prior to providing investment advisory services, an investment adviser
representative will ascertain each client’s investment objective(s). Thereafter, the
Registrant shall allocate and/or recommend that the client allocate investment assets
consistent with the designated investment objective(s). The client may, at any time, impose
reasonable restrictions, in writing, on the Registrant’s services.
D. As of March 10,2022 the Registrant had $168,164,267 in assets under management on a
discretionary basis and $14,502,162 in assets under management on a non-discretionary
basis.