A. Firm Information
Guidance Capital, Inc. (“Guidance Capital” or the “Advisor”) is a registered investment advisor
with the U.S. Securities and Exchange Commission (“SEC”). The Advisor is organized as a
Corporation under the laws of the Commonwealth of Kentucky. Guidance Capital was founded
in July 2005 and became a registered investment advisor in October 2022. Guidance Capital is
owned and operated by Stephen R, Gibson, CPA (Managing Partner and Wealth Planner) and
Beau J. Handy, CFPÒ, CFSÒ (Managing Partner and Wealth Planner / Chief Compliance
Officer). This Disclosure Brochure provides information regarding the qualifications, business
practices, and the advisory services provided by Guidance Capital.
B. Advisory Services Offered
Guidance Capital offers investment advisory services to individuals, high net worth individuals,
trusts, estates, businesses, and retirement plans (each referred to as a “Client”).
The Advisor serves as a fiduciary to Clients, as defined under the applicable laws and
regulations. As a fiduciary, the Advisor upholds a duty of loyalty, fairness and good faith towards
each Client and seeks to mitigate potential conflicts of interest. Guidance Capital's fiduciary
commitment is further described in the Advisor’s Code of Ethics. For more information
regarding the Code of Ethics, please see Item 11 – Code of Ethics, Participation or Interest in
Client Transactions and Personal Trading.
Investment Management Services
Guidance Capital provides customized investment advisory solutions for its Clients. This is
achieved through continuous personal Client contact and interaction while providing
discretionary investment management and related advisory services. Guidance Capital works
closely with each Client to identify their investment goals and objectives as well as risk tolerance
and financial situation in order to create a portfolio strategy.
Guidance Capital will construct Client investment portfolios either through its internal
investment management or an allocation to other money managers (Please see User of Other
Managers below). For its internal investment management, the Advisor primarily utilizes
diversified mutual funds, exchange-traded funds (“ETFs”), individual stocks and/or individual
bonds to achieve the Client’s investment goals. The Advisor may also utilize other types of
investments, as appropriate to meet the needs of the Client. The Advisor may retain legacy
investments based on portfolio fit and/or tax considerations.
Guidance Capital’s investment strategies are primarily long-term focused, but the Advisor may
buy, sell or re- allocate positions that have been held for less than one year to meet the objectives
of the Client or due to market conditions. Guidance Capital will construct, implement and
monitor the portfolio to ensure it meets the goals, objectives, circumstances, and risk tolerance
agreed to by the Client. Each Client will have the opportunity to place reasonable restrictions on
the types of investments to be held in their respective portfolio, subject to acceptance by the
Advisor.
Guidance Capital evaluates and selects investments for inclusion in Client portfolios only after
applying its internal due diligence process. Guidance Capital may recommend, on occasion,
redistributing investment allocations to diversify the portfolio. Guidance Capital may
recommend specific positions to increase sector or asset class weightings. The Advisor may
recommend employing cash positions as a possible hedge against market movement.
Guidance Capital may recommend selling positions for reasons that include, but are not limited
to, harvesting capital gains or losses, business or sector risk exposure to a specific security or
class of securities, overvaluation or overweighting of the position[s] in the portfolio, change in
risk tolerance of the Client, generating cash to meet Client needs, or any risk deemed
unacceptable for the Client’s risk tolerance.
At no time will Guidance Capital accept or maintain custody of a Client’s funds or securities,
except for the limited authority as outlined in Item 15 – Custody. All Client assets will be
managed within the designated account[s] at the Custodian, pursuant to the terms of the advisory
agreement. Please see Item 12 – Brokerage Practices.
Retirement Accounts – When the Advisor provides investment advice to Clients regarding ERISA
retirement accounts or individual retirement accounts (“IRAs”), the Advisor is a fiduciary within
the meaning of Title I of the Employee Retirement Income Security Act (“ERISA”) and/or the
Internal Revenue Code (“IRC”), as applicable, which are laws governing retirement accounts.
When deemed to be in the Client’s best interest, the Advisor will provide investment advice to a
Client regarding a distribution from an ERISA retirement account or to roll over the assets to an
IRA, or recommend a similar transaction including rollovers from one ERISA sponsored Plan to
another, one IRA to another IRA, or from one type of account to another account (e.g.
commission-based account to fee-based account). Such a recommendation creates a conflict of
interest if the Advisor will earn a new (or increase its current) advisory fee as a result of the
transaction. No client is under any obligation to roll over a retirement account to an account
managed by the Advisor.
Use of Other Managers – Guidance Capital may recommend that a Client utilize one or more
other registered investment advisors to provide discretionary investment management. The
Advisor may recommend unaffiliated investment managers or investment platforms or its
affiliated registered investment advisor, Dynamic Market Advantage, LLC (herein collectively
referred to as “Other Managers ”). Other Managers may be engaged to manage all or a portion of
a Client’s investment portfolio. In such instances, the Client will typically be required to enter
into a separate investment management agreement with the Other Manager that defines the terms
in which the Other Manager will provide its services. The exception to this is when Advisor
utilizes its affiliated
investment advisor, in which case the Client will sign a dual agreement that
encompasses services provided by both Guidance and Guidance’s affiliate advisor. The Advisor
may also assist in the development of the initial policy recommendations and managing the
ongoing Client relationship. The Advisor will perform initial and ongoing oversight and due
diligence over the selected Other Manager[s] to ensure each Other Manager’s strategies and
target allocations remain aligned with the Client’s investment objectives and overall best
interests. The Client, prior to entering into an agreement with unaffiliated investment manager[s]
or investment platform[s], will be provided with the Other Manager's Form ADV 2A (or a
brochure that makes the appropriate disclosures). Guidance Capital advises the Client that a
recommendation to use Dynamic Market Advantage, LLC (“DMA”) presents a conflict of
interest due to the common ownership. Please see Item 10 below.
Financial Planning Services
Guidance Capital will typically provide a variety of financial planning and consulting services to
Clients. Financial planning services may be offered as part of an overall wealth management
engagement and single fee or under a separate financial planning engagement. Services are
offered in several areas of a Client’s financial situation, depending on their goals and objectives.
Generally, such financial planning services involve preparing a formal financial plan or
rendering a specific financial consultation based on the Client’s financial goals and objectives.
This planning or consulting may encompass one or more areas of need, including but not limited
to, investment planning, retirement planning, personal savings, education savings, insurance
needs, and other areas of a Client’s financial situation.
A financial plan developed for, or financial consultation rendered to the Client will usually
include general recommendations for a course of activity or specific actions to be taken by the
Client. For example, recommendations may be made that the Client start or revise their
investment programs, commence or alter retirement savings, establish education savings and/or
charitable giving programs.
Guidance Capital may also refer Clients to an accountant, attorney or other specialists, as
appropriate for their unique situation. For certain financial planning engagements, the Advisor
will provide a written summary of the Client’s financial situation, observations, and
recommendations. For consulting or ad-hoc engagements, the Advisor may not provide a written
summary. Plans or consultations are typically completed within six (6) months of contract date,
assuming all information and documents requested are provided promptly.
Financial planning and consulting recommendations pose a conflict between the interests of the
Advisor and the interests of the Client. For example, the Advisor has an incentive to recommend
that Clients engage the Advisor for investment management services or to increase the level of
investment assets with the Advisor, as it would
increase the amount of advisory fees paid to the Advisor. Clients are not obligated to implement
any recommendations made by the Advisor or maintain an ongoing relationship with the Advisor.
If the Client elects to act on any of the recommendations made by the Advisor, the Client is
under no obligation to implement the transaction through the Advisor.
Retirement Plan Advisory Services
Guidance Capital provides non-discretionary and discretionary retirement plan advisory services
on behalf of the retirement plans (each a “Plan”) and the company (the “Plan Sponsor”). The
Advisor’s retirement plan advisory services are designed to assist the Plan Sponsor in meeting its
fiduciary obligations to the Plan and its Plan Participants. Each engagement is customized to the
needs of the Plan and Plan Sponsor. Services generally include:
• Vendor Analysis
• Plan Participant Enrollment and Education Tracking
• Investment Policy Statement (“IPS”) Design and Monitoring
• Investment monitoring and oversight
• Performance Reporting
• Ongoing Investment Recommendation and Assistance
• ERISA 404(c) Assistance
These services are provided by Guidance Capital serving in the capacity as a fiduciary under the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”). In accordance with
ERISA Section 408(b)(2), the Plan Sponsor is provided with a written description of Guidance
Capital’s fiduciary status, the specific services to be rendered and all direct and indirect
compensation the Advisor reasonably expects under the engagement.
C. Client Account Management
Prior to engaging Guidance Capital to provide investment advisory services, each Client is
required to enter into one or more agreements with the Advisor that define the terms, conditions,
authority and responsibilities of the Advisor and the Client. These services may include:
• Establishing an Investment Strategy – Guidance Capital, in connection with the Client,
will develop a strategy that seeks to achieve the Client’s goals and objectives.
• Asset Allocation – Guidance Capital will develop a strategic asset allocation that is
targeted to meet the investment objectives, time horizon, financial situation and tolerance
for risk for each Client.
• Portfolio Construction – Guidance Capital will develop a portfolio for the Client that is
intended to meet the stated goals and objectives of the Client.
• Investment Management and Supervision – Guidance Capital will provide investment
management and ongoing oversight of the Client’s investment portfolio.
D. Wrap Fee Programs
Guidance Capital does not manage or place Client assets into a wrap fee program. Investment
management services are provided directly by Guidance Capital.
E. Assets Under Management
As of December 31, 2023, Guidance Capital manages $288,312,717 in Client assets, all of which
are managed on a discretionary basis. Clients may request more current information at any time
by contacting the Advisor.