A. Sierra Ocean, LLC (“Sierra Ocean”) is a limited liability company formed in the state of
Delaware in February, 2021. Sierra Ocean became registered as a registered investment
advisor with the Securities and Exchange Commission in May, 2021 and is principally
owned by Jeffrey S. Burrow.
B.
INVESTMENT ADVISORY SERVICES
Sierra Ocean provides investment management services and stands to provide financial
planning and consulting services. Sierra Ocean provides investment advisory services
specific to the needs of each client. Before providing investment advisory services, a
financial advisor will ascertain the client’s investment objectives. Thereafter, Sierra Ocean
will recommend that the client allocate investment assets consistent with the client’s
designated investment objectives. Once allocated, Sierra Ocean provides ongoing
monitoring and review of account performance, asset allocation and client investment
objectives.
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
Sierra Ocean may 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. Sierra Ocean offers financial planning
on a project and ongoing basis.
Prior to engaging Sierra Ocean to provide planning or consulting services, clients are
generally required to enter into a consulting agreement with Sierra Ocean 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
Sierra Ocean commencing services. If requested by the client, Sierra Ocean may
recommend the services of other professionals for implementation purposes, including
certain of Sierra Ocean’s representatives in their individual capacities as licensed insurance
agents (See disclosure at Item 10.C below). The client is under no obligation to engage the
services of any such recommended professional. The client retains absolute discretion over
all implementation decisions and is free to accept or reject any recommendation from Sierra
Ocean.
If the client engages any recommended professional, and a dispute arises thereafter relative
to such engagement, the client agrees to seek recourse exclusively from and against the
engaged professional. At all times, the licensed professional(s) (i.e. attorney, accountant,
insurance agent, etc.), and not Sierra Ocean, shall be responsible for the quality and
competency of the services provided.
Please Note: Planning Limitations. Sierra Ocean believes that it is important for the client
to address financial planning issues on an ongoing basis. Sierra Ocean’s advisory fee, as
set forth at Item 5 below, will remain the same regardless of whether or not the client
determines to address financial planning issues with Sierra Ocean. It remains each client’s
responsibility to promptly notify Sierra Ocean if there is ever any change in his/her/its
financial situation or investment objectives for the purpose of
reviewing/evaluating/revising our previous recommendations and/or services.
Miscellaneous
Limitations of Financial Planning and Non-Investment Consulting/Implementation
Services. As indicated above, to the extent requested by a client, Sierra Ocean will
generally provide financial planning and related consulting services as part of its services
(exceptions may occur based upon assets under management, special projects, etc. for
which Sierra Ocean may charge a separate fee). However, neither Sierra Ocean nor its
employees are responsible for implementing any aspect of a financial plan, unless they
have agreed to do so in writing. Sierra Ocean does not monitor a client’s financial plan,
and it is the client’s responsibility to revisit the financial plan with Sierra Ocean, if desired.
Furthermore, although Sierra Ocean may provide recommendations regarding non-
investment related matters, such as estate planning, tax planning and insurance, Sierra
Ocean does not serve as an attorney or accountant, and no portion of its services should be
construed as legal or accounting services. Accordingly, Sierra Ocean does not prepare
estate planning documents or tax returns.
To the extent requested by a client, Sierra Ocean may recommend the services of other
professionals for certain non-investment implementation purposes (i.e. attorneys,
accountants, insurance, etc.), including certain of Sierra Ocean’s representatives in their
individual capacities as licensed insurance agents (See disclosure at Item 10.C below). 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 Sierra Ocean 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. At all times, the engaged third party licensed professional(s) (i.e.
attorney, accountant, insurance agent, etc.), and not Sierra Ocean, shall be responsible for
the quality and competency of the services provided. Sierra and its representatives also
remain responsible for recommendations to the extent that they provide such
recommendations relative to insurance products or services..
Right Capital/ByAllAccounts Client Access. In conjunction with the services provided
by Right Capital and ByAllAccounts, Sierra Ocean may also provide periodic
comprehensive reporting services, which can incorporate all of the client’s investment
assets including those investment assets that are not part of the assets managed by Sierra
Ocean (the “Excluded Assets”). Sierra Ocean’s service relative to the Excluded Assets is
limited to reporting services only, which does not include investment implementation.
Because Sierra Ocean does not have trading authority for the Excluded Assets, to the extent
applicable to the nature of the Excluded Assets (assets over which the client maintains
trading authority vs. trading authority designated to another investment professional), the
client (and/or the other investment professional), and not Sierra Ocean, shall be exclusively
responsible for directly implementing any recommendations relative to the Excluded
Assets. The client and/or their other advisors that maintain trading authority, and not Sierra
Ocean, shall be exclusively responsible for the investment performance of the Excluded
Assets. Without limiting the above, Sierra Ocean shall not be responsible for any
implementation error (timing, trading, etc.) relative to the Excluded Assets. In the event
the client desires that Sierra Ocean provide investment management services with respect
to the Excluded Assets, the client may engage Sierra Ocean to do so pursuant to the terms
and conditions of the Investment Advisory Agreement between Sierra Ocean and the client.
Custodian Charges-Additional Fees. As discussed below at Item 12 below, when
requested to recommend a broker-dealer/custodian for client accounts, Sierra Ocean
generally recommends that Charles Schwab and Co. (“Schwab”) serves as the broker-
dealer/custodian for client investment management assets. Broker-dealers such as Schwab
charge brokerage commissions, transaction, and/or other types of fees for effecting certain
types of securities transactions (i.e., including transaction fees for certain mutual funds,
and mark-ups and mark-downs charged for fixed income transactions, etc.). The types of
securities for which transaction fees, commissions, and/or other type fees (as well as the
amount of those fees) shall differ depending upon the broker-dealer/custodian (while
certain custodians, including Schwab, do not currently charge fees on individual equity
transactions, others do). Please Note: there can be no assurance that Schwab will not
change their transaction fee pricing in the future. Please Also Note: Schwab may also
assess fees to clients who elect to receive trade confirmations and account statements by
regular mail rather than electronically. These fees/charges are in addition to Sierra Ocean’s
investment advisory fee at Item 5 below. Sierra Ocean does not receive any portion of these
fees/charges.
Please Note: Fee Differentials. Sierra Ocean shall generally price its advisory services
based upon various objective and subjective factors. As a result, our clients could pay
diverse fees based upon the type, amount and market value of their assets, the anticipated
complexity of the engagement, the anticipated level and scope of the overall investment
advisory and consulting services to be rendered. Additional factors effecting pricing can
include related accounts, employee accounts, competition, and negotiations. Please Also
Note: As a result of these objective and subjective factors, similarly situated clients could
pay diverse fees, and the services to be provided by Sierra Ocean to any particular client
could be available from other advisers at lower fees. All clients and prospective clients
should be guided accordingly.
Cash Sweep Accounts. Account custodians generally require that cash proceeds from
account transactions or cash deposits be swept into and/or initially maintained in the
custodian’s sweep account. The yield on the sweep account is generally lower than those
available in money market accounts. To help mitigate this issue, Sierra Ocean shall
generally purchase a higher yielding money market fund available on the custodian’s
platform with cash proceeds or deposits, unless Sierra Ocean reasonably anticipates that it
will utilize the cash proceeds during the subsequent 30-day period to purchase additional
investments for the client’s account. Exceptions and/or modifications can and will occur
with respect to all or a portion of the cash balances for various reasons, including, but not
limited to, the amount of dispersion between the sweep account and a money market fund,
an indication from the client of an imminent need for such cash, or the client has a
demonstrated history of writing checks from the account
Cybersecurity Risk. The information technology systems and networks that Sierra Ocean
and its third-party service providers use to provide services to Sierra Ocean’s clients
employ various controls, which are designed to prevent cybersecurity incidents stemming
from intentional or unintentional actions that could cause significant interruptions in Sierra
Ocean’s operations and result in the unauthorized acquisition or use of clients’ confidential
or non-public personal information. Clients and Sierra Ocean are nonetheless subject to the
risk of cybersecurity incidents that could ultimately cause them to incur losses, including
for example: financial losses, cost and reputational damage to respond to regulatory
obligations, other costs associated with corrective measures, and loss from damage or
interruption to systems. Although Sierra Ocean has established its systems to reduce the
risk of cybersecurity incidents from coming to fruition, there is no guarantee that these
efforts will always be successful, especially considering that Sierra Ocean does not directly
control the cybersecurity measures and policies employed by third-party service providers.
Clients could incur similar adverse consequences resulting from cybersecurity incidents
that more directly affect issuers of securities in which those clients invest, broker-dealers,
qualified custodians, governmental and other regulatory authorities, exchange and other
financial market operators, or other financial institutions.
Pontera. Sierra Ocean uses Pontera, a third party platform to facilitate the management of
held away assets such as defined contribution plan participant accounts, with discretion.
Those clients who choose to engage Sierra Ocean to service their held away accounts will
be
provided a link to connect their outside accounts to the platform. Once the client’s
account(s) is connected to the platform, Sierra Ocean will review the client’s current
account allocations. Sierra Ocean will rebalance the connected outside accounts consistent
with the client’s investment goals and risk tolerance. Client account(s) will be reviewed at
least quarterly. To facilitate use of the Pontera platform, the client securely logs into the
Pontera site and entitles Sierra Ocean to manage the assets. Pontera charges Sierra Ocean
25 bps for each managed account. Clients do not pay any additional fee to Pontera or to
Sierra Ocean in connection with platform participation. Sierra Ocean is not affiliated with
the Pontera platform in any way and receives no compensation from them for using their
platform.
Borrowing Against Assets/Risks. A client who has a need to borrow money could
determine to do so by using:
● Margin-The account custodian or broker-dealer lends money to the client. The
custodian charges the client interest for the right to borrow money, and uses the assets
in the client’s brokerage account as collateral; and,
● Pledged Assets Loan- In consideration for a lender (i.e., a bank, etc.) to make a loan
to the client, the client pledges its investment assets held at the account custodian as
collateral;
These above-described collateralized loans are generally utilized because they typically
provide more favorable interest rates than standard commercial loans. These types of
collateralized loans can assist with a pending home purchase, permit the retirement of more
expensive debt, or enable borrowing in lieu of liquidating existing account positions and
incurring capital gains taxes. However, such loans are not without potential material risk
to the client’s investment assets. The lender (i.e. custodian, bank, etc.) will have recourse
against the client’s investment assets in the event of loan default or if the assets fall below
a certain level. For this reason, Sierra Ocean does not recommend such borrowing unless
it is for specific short-term purposes (i.e. a bridge loan to purchase a new residence). Sierra
Ocean does not recommend such borrowing for investment purposes (i.e. to invest
borrowed funds in the market). Regardless, if the client were to determine to utilize margin
or a pledged assets loan, the following economic benefits would inure to Sierra Ocean:
● by taking the loan rather than liquidating assets in the client’s account, Sierra Ocean
continues to earn a fee on such Account assets; and,
● if the client invests any portion of the loan proceeds in an account to be managed by
Sierra Ocean, Sierra Ocean will receive an advisory fee on the invested amount
Please Note: The Client must accept the above risks and potential corresponding
consequences associated with the use of margin or a pledged assets loans.
Independent Managers. As indicated above, Sierra Ocean may allocate a portion of the
client’s investment assets among unaffiliated independent investment managers in
accordance with the client’s designated investment objective(s). In such situations, the
Independent Manager[s] shall have day-to-day responsibility for the active discretionary
management of the allocated assets. Sierra Ocean shall continue to render investment
supervisory services to the client relative to the ongoing monitoring and review of account
performance, asset allocation and client investment objectives. Factors that Sierra Ocean
shall consider in recommending Independent Manager[s] include the client’s designated
investment objective(s), management style, performance, reputation, financial strength,
reporting, pricing, and research. The client is under no obligation to engage an Independent
Manager[s]. ANY QUESTIONS: Sierra Ocean’s Chief Compliance Officer remains
available to address any questions that a client or prospective client may have regarding the
allocation of account assets to an Independent Manager(s), including the specific additional
fee to be charged by such Independent Manager(s).
Unaffiliated Private Investment Funds. Sierra Ocean also provides investment advice
regarding private investment funds. Sierra Ocean, on a non-discretionary basis, may
recommend that certain qualified clients consider an investment in private investment
funds, the description of which (the terms, conditions, risks, conflicts and fees, including
incentive compensation) is set forth in the fund’s offering documents. Sierra Ocean’s role
relative to unaffiliated private investment funds shall be limited to its initial and ongoing
due diligence and investment monitoring services. If a client determines to become an
unaffiliated private fund investor, the amount of assets invested in the fund(s) shall be
included as part of “assets under management” for purposes of Sierra Ocean calculating its
investment advisory fee. Sierra Ocean’s fee shall be in addition to the fund’s fees. Sierra
Ocean’s clients are under absolutely no obligation to consider or make an investment
in any private investment fund(s).
Please Note: 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 own, 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.
Please Also Note: Valuation. In the event that Sierra Ocean references private investment
funds owned by the client on any supplemental account reports prepared by Sierra Ocean,
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. Please Also Note: 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, Sierra Ocean
shall calculate its fee based upon the latest value provided by the fund sponsor.
Nonetheless, Sierra Ocean periodically contacts the fund sponsor to verify current
pricing of private funds in connection with its billing process.
Non-Discretionary Service Limitations. Clients that determine to engage Sierra Ocean
on a non-discretionary investment advisory basis must be willing to accept that Sierra
Ocean 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, Sierra Ocean will be unable to effect any account transactions (as it
would for its discretionary clients) without first obtaining the client’s consent.
Retirement Plan Rollovers–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 Sierra Ocean recommends that a client roll over their
retirement plan assets into an account to be managed by Sierra Ocean, such a
recommendation creates a conflict of interest if Sierra Ocean will earn an advisory fee on
the rolled over assets. If Sierra Ocean provides a recommendation as to whether a client
should engage in a rollover or not (whether it is from an employer’s plan or an existing
IRA), Sierra Ocean 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 Sierra Ocean, whether it is from an
employer’s plan or an existing IRA.
Trustee Directed Plans. Sierra Ocean can be engaged to provide discretionary investment
advisory services to ERISA retirement plans, whereby the Firm shall manage Plan assets
consistent with the investment objective designated by the Plan trustees. In such
engagements, Sierra Ocean will serve as an investment fiduciary as that term is defined
under The Employee Retirement Income Security Act of 1974 (“ERISA”). Sierra Ocean
will generally provide services on an “assets under management” fee basis per the terms
and conditions of an Investment Advisory Agreement between the Plan and the Firm.
Participant Directed Retirement Plans. Sierra Ocean can also provide investment
advisory and consulting services to participant directed retirement plans per the terms and
conditions of a Retirement Plan Services Agreement between Sierra Ocean and the plan.
For such engagements, Sierra Ocean shall assist the Plan sponsor with the selection of an
investment platform from which Plan participants shall make their respective investment
choices (which may include investment strategies devised and managed by Sierra Ocean),
and, to the extent engaged to do so, may also provide corresponding education to assist the
participants with their decision making process.
Client Obligations. In performing its services, Sierra Ocean 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 Sierra Ocean if there is ever any change in their financial
situation or investment objectives for the purpose of reviewing, evaluating or revising
Sierra Ocean’s previous recommendations and/or services.
Investment Risk. Different types of investments involve varying degrees of risk, and it
should not be assumed that future performance of any specific investment or investment
strategy (including the investments and/or investment strategies recommended or
undertaken by Sierra Ocean) will be profitable or equal any specific performance level(s).
Disclosure Statement: A copy of Sierra Ocean's written Brochure as set forth on Part 2A
of Form ADV, along with our Form CRS Relationship Summary, shall be provided to
each client prior to, or contemporaneously with, the execution of the Investment Advisory
Agreement.
C. Sierra Ocean 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, Sierra Ocean 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 Sierra Ocean’s services.
D. Sierra Ocean does not participate in a wrap fee program.
E. As of December 31, 2022, Sierra Ocean had $173,245,163 in assets under management on
a discretionary basis and $156,916,673 in assets under management on a non-discretionary
basis.