A. Description of the Advisory Firm
Kinetic Investment Management, Inc. (hereinafter “Kinetic Investment Management”) is a corporation
organized in the State of California. The firm was formed in January 2016, and the principal owner is Ali
Hashemian.
B. Types of Advisory Services
Portfolio Management Services
Kinetic Investment Management offers ongoing portfolio management services based on the individual
goals, objectives, time horizon, and risk tolerance of each client. We create an Investment Policy Statement
for you which outlines your current situation (income and risk tolerance levels) and then we construct a
plan to aid in the selection of a portfolio that matches your specific situation. Portfolio management
services include but are not limited to the following:
• Investment strategy • Asset selection
• Personal investment policy • Risk tolerance
• Asset allocation • Regular portfolio monitoring
We evaluate your current investments with respect to your risk tolerance level and time horizon. We will
request discretionary authority from you to select securities and execute transactions without permission
from you prior to each transaction. Risk tolerance levels are documented in the Investment Policy
Statement which is given to each client.
We seek to provide investment decisions that are made in accordance with the fiduciary duties owed to
our clients’ accounts and without consideration of our economic, investment, or other financial interests.
To meet our fiduciary obligations, we attempt to avoid, among other things, investment or trading
practices that systematically advantage or disadvantage individual client portfolios. Thus accordingly,
our policy is to seek fair and equitable allocation of investment opportunities/transactions among our
clients to avoid favoring one client over another. It is our policy to allocate investment opportunities and
transactions we identify as being appropriate and prudent among our clients on a fair and equitable basis.
We may direct our clients to third-party investment advisers. Before selecting other investment advisers
for clients, we will verify that all recommended advisers are properly licensed, notice filed or exempt in
the states where we are recommending the adviser.
Sub-Advisory Investment Management Services
Kinetic Investment Management provides sub-advisory investment management services to unaffiliated
registered investment advisers, RIA firms. Unaffiliated RIA firms may access third-party investment
advisers through us for investment management of some or all their clients’ assets.
We provide back-office services including but not limited to processing investment management requests
and processing custodial relationship applications for the RIA firms in return for fees deducted from the
advisor fee. The advisor fee is itemized on the third-party adviser’s platform on the statement of
investment selection. Kinetic Investment Management is shown as the adviser/sub-adviser.
Financial Planning
Financial plans may include but are not limited to investment planning, tax planning, retirement
planning, insurance planning, business consulting, and estate planning.
Investment planning includes but is not limited to risk management, portfolio performance, asset
allocation, and diversification. Tax planning includes but is not limited to tax forecasting, tax efficiency,
and tax-advantaged strategies. Retirement planning includes but is not limited to income/distribution
maximization, budgeting, inflation, and taxes. Insurance planning includes but is not limited to life
insurance, long-term care insurance, health insurance, car insurance, and homeowner’s insurance. Estate
planning includes but is not limited to trust strategies, incorporation strategies, and charitable/gifting
strategies.
Financial planning services are offered to all our clients, and it is anticipated that each of these services
will take approximately 2-4 hours of planning. The
final fee structure for these services is based on hourly
rates and is documented in Exhibit II of the Financial Planning Agreement.
Educational seminars/workshops
Kinetic Investment Management may provide educational seminars/workshops/presentations for free
to ongoing or prospective clients. These services include presentations to individuals or groups about
various aspects of wealth management. These seminars/workshops/presentations will be offered on an
ad hoc basis. We do not charge for these educational seminars/workshops/ presentations.
Services Limited to Specific Types of Investments
We generally limit our investment advice to equity investments, fixed income investments, exchange
traded fund (ETF) investments, real estate investments, commodities investments, international
investments, and mutual fund investments. We may use other securities as well to help diversify a
portfolio when applicable.
Written Acknowledgement of Fiduciary Status
When we provide investment advice to you regarding your retirement plan account or individual
retirement account, we are fiduciaries 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. The way we make money creates some conflicts with your interests, so we operate under a
special rule that requires us to act in your best interest and not put our interest ahead of yours. Under
this special rule’s provisions, we must:
• Meet a professional standard of care when making investment recommendations (give
prudent advice).
• Never put our financial interests ahead of yours when making recommendations (give loyal
advice).
• Avoid misleading statements about conflicts of interest, fees, and investments.
• Follow policies and procedures designed to ensure that we give advice that is in your best
interest.
• Charge no more than is reasonable for our services.
• Give you basic information about conflicts of interest.
C. Client Tailored Services and Client Imposed Restrictions
Kinetic Investment Management will tailor a program for each client. This will include an interview
session to get to know your specific needs and requirements as well as a plan that will be executed by us
on your behalf. We may use “model portfolios” together with a specific set of recommendations for you
based on your personal restrictions, needs, and targets. In addition to risk tolerance, we will use other
quantitative factors such as investment goals, time horizon, lifestyle needs, retirement plans, and legacy
concerns. We will also look at your entire portfolio (even the portions not managed by us) to align your
risk tolerance in aggregate. You may impose restrictions on investing in certain securities or types of
securities in accordance with your values or beliefs. However, if the restrictions prevent us from properly
servicing your account or if the restrictions would require us to deviate from our standard suite of
services, we reserve the right to terminate the relationship.
D. Wrap Fee Programs
A wrap fee program is an investment program where you pay one stated fee that includes management
fees, transaction costs, fund expenses, and other administrative fees. Kinetic Investment Management
may recommend various third-party money managers that manage a wrap fee program.
E. Assets Under Management
As of December 31, 2023, Kinetic Investment Management had $343,579,081 in assets under management,
of which $319,281,071 in assets under management we manage on a discretionary basis, and $24,298,010 in
assets under management on a non-discretionary basis. Additionally, Kinetic Investment Management had
$50,144,010 in assets under administration. While we provide administrative services, we are not currently
providing continuous investment management services regarding these assets under administration.
Consequently, we have total assets of $393,723,091.