Description of Advisory Firm
Bay Capital Advisors, LLC (referred to as “Bay Capital” or “BCA” throughout this document) is an
investment advisor registered with the Securities and Exchange Commission. Bay Capital is a limited
liability company formed under the laws of the Commonwealth of Virginia.
• Bay Capital has been registered as an investment advisor since May 2006.
• Bay Capital’s controlling owners and managing members are Jim Flinchum, Joe Sallee and
Vivian Honeycutt.
• Bay Capital’s Chief Compliance Officer is Jim Flinchum.
• Bay Capital offers personalized investment advisory services, as well as individualized financial
planning services, including estate planning.
General Description of Primary Advisory Services
The following are brief descriptions of Bay Capital’s primary services. A detailed description of Bay
Capital’s services is provided in Item 5 – Fees and Compensation so that clients and prospective clients
can review the services and description of fees in a side-by-side manner.
Bay Capital considers itself experienced enough to specialize in the following areas:
• Investment management and estate planning
• Investment Management specializing in a suitable mix of mutual funds, exchange traded funds
(ETFs), equities, fixed income investments, options, and other general securities
• Investment management services focusing on fundamental analysis on a top-down basis,
beginning with a macro-economic analysis
• Comprehensive financial planning
Client Assets Managed by Bay Capital
The amount of client assets managed by Bay Capital totaled $155,149,960 as of January 1, 2024. The
entire amount is managed on a discretionary basis. See Item 16 – Investment Discretion for more
information.
Portfolio Management Services
This is the main service offered by Bay Capital and most clients receiving this Disclosure Brochure will be
signing up for Portfolio Management Services. The service involves providing clients with continuous and
on-going supervision over client accounts. This means that Bay Capital will monitor a client’s account as
appropriate and make trades in client accounts when appropriate. Typically, Bay Capital will have
discretion on the client’s accounts which means Bay Capital can buy and sell securities without talking to
the client prior to each buy/sell decision.
Types of Investments
When providing Portfolio Management Services, Bay Capital typically constructs each client’s asset
allocation using exchange-traded funds, institutional and no-load mutual funds, fixed income and other
types of investments, as appropriate, to help achieve the Client’s investment goals. When appropriate for
building a core-satellite portfolio, managed mutual or exchange traded funds are often used and preferred
for small-cap and emerging market exposure. It is not Bay Capital’s typical investment strategy to attempt
to time the market but may increase or decrease cash holdings modestly as deemed appropriate by the
firm, based on the client’s risk tolerance and the firm’s expectations of market behavior. Bay Capital
prefers not to select individual securities but will do so if client has a history of and a preference for such
investments. Bay Capital may change its investment strategy to accommodate special situations
like: low basis stock, stock options, legacy holdings, inheritances, closely held businesses, collectibles,
or special tax situations.
With some exceptions, Bay Capital is willing to offer advice on most types of investments owned by a
client and, at the specific request of a client, will explore investment options not currently owned by a
client.
The following are some of the general categories of securities that Bay Capital will advise.
• Exchange-listed securities
• Securities traded over-the-counter
• Exchange Traded Funds (ETFs), including Exchange Traded Notes (ETNs)
• Foreign issues
• Corporate debt securities (other than commercial paper)
• Commercial paper
• Certificates of deposit
• Municipal securities
• Mutual fund shares
• United States government securities
• Options contracts on securities
• Interests in partnerships investing in real estate, oil and gas interests
• Bay Capital may provide advice to a client regarding real estate investment trusts, real estate
partnerships and other private placement investments. These types of investments are often
illiquid, which means that the investments can be difficult to trade and consequently can limit a
client’s ability to sell the investments in a timely manner and at an advantageous price.
Additionally, some investments may not have registered pursuant to the Securities Act of 1933,
and therefore the client will need to complete a subscription agreement showing the client is an
“accredited” investor (as defined by applicable law and rules and regulations) and acknowledge
that he or she has read and understands the private placement memorandum and is aware of the
various risk factors associated with such an investment.
Tailor Advisory Services to Individual Needs of Clients
Bay Capital’s services are always provided based on the individual needs of the individual client.
Because of this, the portfolios of different clients will often be very different, reflecting the individual client.
Clients are given the ability to impose restrictions on their accounts including specific investment
selections and sectors. We work with each client on a one-on-one basis through interviews and question-
and-answer sessions to determine the client’s investment objectives and suitability information.
During our data-gathering process, we help clients determine their individual objectives, time horizons,
risk tolerance, and liquidity needs. We may also review and discuss a client’s prior investment history, as
well as family composition and background. Account supervision is guided by the stated objectives of the
client (i.e., maximum capital appreciation, growth, income, or growth and income), as well as tax
considerations.
Investment Analysis and Corporate Planning Services. Investment Analysis Services are best
described as providing specific advice regarding the portfolio or asset holdings of the client, but not
implementing investment decisions or having any trading authority over account holdings. Corporate
Planning Services are designed to assist businesses and corporations make cash management and
refinancing decisions. These services can be combined or provided separately depending on the needs
of each individual client and are less commonly provided than Portfolio Management Services.
In these cases, the services provided by BCA will address those specific areas of concern and will be
included in a Financial Planning/Consulting Agreement negotiated by BCA and the client.
Advice is based on objectives communicated, either orally or in writing, by the client and the BCA advisor.
Consulting services may be provided through individual consultations and/or a written project document.
Project-Based Consulting Fee
BCA may provide, to the extent requested by the client, non-discretionary project-based consulting
services on a negotiable, stand-alone separate fee basis. Consulting services are typically offered to non-
portfolio management clients who do not require ongoing investment counsel but seek advice in one or
more specific areas of their life (including investment and non-investment related matters). To
accommodate those individuals, BCA is able to provide Project-Based Consulting Services on a more
modular level. Fees for this service are discussed in Item 5, below.
Comprehensive Subscription Based Financial Planning
This service involves working one-on-one with a planner over an extended period of time. By paying a
monthly or quarterly subscription fee, clients get continuous access to a planner who will work with them
to design their plan. The planner will monitor the plan, recommend any changes and ensure the plan is up
to date.
Upon requesting a comprehensive plan, a client will be taken through establishing their goals and
values
around money. They will be required to provide information to help complete the following areas of
analysis: net worth, cash flow, insurance, credit scores/reports, employee benefit, retirement planning,
insurance, investments, college planning and estate planning. Once the client’s information is reviewed,
their plan will be built and analyzed, and then the findings, analysis and potential changes to their current
situation will be reviewed with the client. Clients subscribing to this service will receive a written or an
electronic report, providing the client with a detailed financial plan designed to achieve his or her stated
financial goals and objectives. If a follow up meeting is required, we will meet at the client's convenience.
The plan and the client’s financial situation and goals will be monitored throughout the year and follow-up
phone calls and emails will be made to the client to confirm that any agreed upon action steps have been
carried out. On an annual basis there will be a full review of this plan to ensure its accuracy and ongoing
appropriateness. Any needed updates will be implemented at that time.
Comprehensive Financial Planning and Project-Based Consulting Topics
We provide financial planning services on topics such as retirement planning, risk management, college
savings, cash flow, debt management, work benefits, and estate and incapacity planning.
Financial planning is a comprehensive evaluation of a client’s current and future financial state by using
currently known variables to predict future cash flows, asset values and withdrawal plans. Clients
purchasing this service will receive a report, providing the client with a detailed financial plan designed to
assist them in achieving their stated financial goals.
In general, the financial plan will address one or more of the areas described below. The client and
advisor will work together to select the specific areas to cover. These areas include, but are not limited
to, the following:
• Business Planning: We provide consulting services for clients who currently operate their own
business, are considering starting a business, or are planning for an exit from their current
business. Under this type of engagement, we work with you to assess your current situation,
identify your objectives, and develop a plan aimed at achieving your goals.
• Cash Flow and Debt Management: We will review your income and expenses to determine your
current cash flow situation and provide advice on how to use any surplus or how to reduce
expenses if they exceed your income. Advice may also be provided on which debts to pay off first
based on factors such as the interest rate of the debt and any income tax ramifications. We may
also recommend what we believe to be an appropriate emergency fund, along with a review of
accounts (such as money market funds) for such emergency fund.
• College Savings: We will develop a plan to assist you in reaching your college savings goals for
yourself, your children or your grandchildren, as appropriate. This includes projecting the amount
that will be needed to achieve college or other post-secondary education funding needs, along
with strategies for ways to save and invest for the projected amount.
• Employee Benefits Optimization: We will review and provide an analysis as to whether you, as
an employee, are taking the maximum advantage possible of your employee benefits. If you are
a business owner, we will consider and/or recommend the various benefit programs that can be
structured to meet both business and personal retirement goals.
• Estate Planning: We always recommend that you consult with a qualified attorney when you
initiate, update, or complete estate-planning activities. We will review and provide an analysis of
your current estate plan, which includes, as applicable, your will, powers of attorney, trusts and
other related documents. Our analysis will typically discuss appropriate estate planning
strategies that should be discussed with your estate planning attorney as useful in meeting your
goals. If new documents are prepared by your attorney, we will assist you in reviewing these
documents.
• Financial Goals: We will help clients identify financial goals and develop a plan to reach them.
We will assist you in identifying your goals and developing a plan of action to meet your goals.
• Insurance: We will review existing policies to assist in determining if you have proper coverage
for life, health, disability, long-term care, liability, home and automobile.
• Investment Analysis: We will help you determine your risk tolerance and investment goals. We
will develop an asset allocation strategy for your current investable assets within your tolerance
and designed to meet your goals. We will provide information on investment vehicles and
strategies, reviewing employee stock options, as well as assisting you in establishing your own
investment account at a selected broker/dealer or custodian, if appropriate. The strategies and
types of investments we may recommend are further discussed in Item 8 of this brochure.
• Retirement Planning: We will provide a projection on the likelihood of achieving your retirement
goals using your current and projected retirement assets, focusing on financial independence as
the primary goal. For situations where projections show less than the needed retirement assets,
we will make recommendations on ways to get closer to or attain your retirement goals (e.g.,
working longer, saving more, spending less). If you are near retirement or already retired, advice
may be given on appropriate distribution strategies to minimize the likelihood of running out of
money or having to adversely alter spending during your retirement years.
• Risk Management: We will conduct a risk management review including an analysis of your
exposure to major risks that could have a significant adverse impact on your financial picture,
such as premature death, disability, property and casualty losses. Advice may be provided on
ways to minimize such risks and about weighing the costs of purchasing insurance versus the
benefits of doing so and, likewise, the potential cost of not purchasing insurance (“self-insuring”).
• Tax Efficiency Strategies: We will provide advice on ways to minimize current and future
income taxes as a part of your overall financial planning picture. For example, we may make
recommendations on which type of account(s) or specific investments should be owned based in
part on their “tax efficiency,” with consideration that there is always a possibility of future changes
to federal, state or local tax laws and rates that may impact your situation.
We always
recommend that you consult with a qualified tax professional before initiating any tax planning
strategy. With your approval, we will participate, as appropriate, in meetings or phone calls
between you and your tax professional.
If you do not work with a tax professional, we may
provide you with contact information for accountants and/or attorneys who specialize in this area.
Note: BCA is not compensated by any accountants, attorneys, or other tax professionals that we
refer you to.
• Educational Workshops and Seminars.
BCA may periodically host educational workshops
and/or seminars about a variety of financial related topics. The workshops or seminars are not
designed to provide specific and personal advice to a specific Client. The workshops and/or
seminars are educational in nature and provide impersonal advice to attendees.
Client Tailored Services and Client Imposed Restrictions
We offer the same suite of services to all BCA clients; however, specific client financial plans and their
implementation are dependent upon the client and their current situation (e.g., income, investable assets,
tax brackets, and risk tolerances), which is used to construct a client specific plan. Before financial
planning or project-based consulting occurs, your BCA advisor will provide an engagement letter with an
outline of the financial planning areas and topics that will be evaluated during the process, and the
expected fee for completion of the plan or project.