A. The Investment Counsel Company of Nevada (the “Registrant”) is a corporation formed
on March 26, 1987 in the state of Nevada. The Registrant became registered as an
Investment Advisor Firm in January 1988. The Registrant is owned by the Garcia Family
Trust dated 8/29/91, Randy A. Garcia and Staci R. Garcia, Trustees.
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-only basis. The Registrant’s annual
investment advisory fee is based upon a percentage (%) of the market value of the assets
placed under the Registrant’s management. The Registrant may also charge an hourly
rate for consulting services determined based on the agreed upon services. For additional
information, please refer to Item 5, Fees and Compensation.
CONSULTING SERVICES (STAND-ALONE)
To the extent specifically requested by the client, the Registrant may determine to
provide consulting services (including investment and non-investment related matters)
on a stand-alone hourly fee 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 consulting services, clients are generally required to enter into a Limited
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. 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 recommended
professional, and a dispute arises thereafter, the client agrees to seek recourse exclusively
from the engaged professional. It remains the client’s responsibility to promptly notify
the Registrant if there is ever any change in their financial situation or investment
objectives so that the Registrant can review and revise its previous recommendations and
services.
MISCELLANEOUS
Unaffiliated Private Investment Funds. The Registrant may discuss private investment
funds that clients may wish to make investments in from time to time. The Registrant’s
role relative to the private investment funds shall be limited to its initial and ongoing due
diligence and investment monitoring services. The amount of assets invested in the any
private investment fund will be included for purposes of Registrant calculating its annual
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
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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, the value for all private investment
funds owned by the client will reflect the most recent valuation provided by the fund
sponsor. However, if after the purchase, the fund has not provided an updated valuation,
the valuation will reflect the initial purchase price. If after the 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 an updated value.
The current value of an investor’s holding 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.
Limitations of Financial Planning and Non-Investment Consulting/Implementation
Services. 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. The Registrant does not serve as a law firm,
accounting firm, or insurance agency, and no portion of Registrant’s services should be
construed as legal, accounting, or insurance implementation services. Accordingly,
Registrant does not prepare estate planning documents, tax returns or sell insurance
products. To the extent requested by a client, Registrant may recommend the services of
other professionals for certain non-investment implementation purposes (i.e., attorneys,
accountants, insurance agents, etc.). Clients are reminded that they are under no
obligation to engage the services of any recommended professional. The client retains
absolute discretion over all such implementation decisions and is free to accept or reject
any recommendation made by Registrant or its representatives. If the client engages any
unaffiliated recommended professional, and a dispute arises, the client agrees to seek
recourse exclusively from and against the engaged professional.
Tradeaway/Prime Broker Fees. Relative to its discretionary investment management
services, when beneficial to the client, individual fixed income transactions may be
effected through broker-dealers other than the account custodian, in which event, the
client generally will incur both the fee (commission, mark-up/mark-down) charged by the
executing broker-dealer and a separate “tradeaway” and/or prime broker fee charged by
the account custodian (Schwab).
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.
Cash Sweep Accounts. Certain account custodians can require that cash proceeds from
account transactions or new deposits, be swept to and/or initially maintained in a
specific custodian designated sweep account. The yield on the sweep account will
generally be lower than those available for other money market accounts. When this
occurs, to help mitigate the corresponding yield dispersion Registrant shall (usually within
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30 days thereafter) generally (with exceptions) purchase a higher yielding money market
fund (or other type security) available on the custodian’s platform, unless Registrant
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, the size of the cash balance, 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.
The above does not apply to the cash component maintained within a Registrant actively
managed investment strategy (the cash balances for which shall generally remain in the
custodian designated cash sweep account), an indication from the client of a need for
access to such cash, assets allocated to an unaffiliated investment manager and cash
balances maintained for fee billing purposes.
The client shall remain exclusively responsible for yield dispersion/cash balance decisions
and corresponding transactions for cash balances maintained in any Registrant
unmanaged accounts.
Independent Managers. Registrant may recommend that a client invest a portion of their
assets in unaffiliated independent investment managers (“Independent Manager(s)”) in
accordance
with the client’s designated investment objectives. In such situations, the
Independent Managers will have day-to-day responsibility for the discretionary
management of the allocated assets. Registrant will continue to monitor and review the
client’s account performance, asset allocation and investment objectives. The factors
Registrant considers in recommending Independent Managers may include the client’s
designated investment objectives, and the manager’s management style, performance,
reputation, financial strength, reporting, pricing, and research. The investment
management fee charged by any Independent Manager is in addition to the Registrant’s
advisory fee as set forth in Item 5.
Use of Mutual Funds and Exchange Traded Funds: While the Registrant may recommend
allocating investment assets to mutual funds that are not available directly to the public,
the Registrant may also recommend that clients allocate investment assets to publicly
available mutual funds and exchange traded funds that the client could obtain without
engaging Registrant as an investment adviser. However, if a client or prospective client
determines to allocate investment assets to publicly available mutual funds or exchange
traded funds without engaging Registrant as an investment adviser, the client or
prospective client would not receive the benefit of Registrant’s initial and ongoing
investment advisory services.
Mutual funds, such as those issued by Dimensional Fund Advisors (“DFA”), are generally
only available through registered investment advisers. Registrant may allocate client
investment assets to DFA mutual funds. Therefore, upon the termination of Registrant’s
services to a client, restrictions regarding transferability and/or additional purchases of,
or reallocation among DFA funds will apply. Any decision made by a client to sell securities
upon termination could result in tax consequences and clients should discuss the
potential consequences with their tax advisors.
Non-Discretionary Service Limitations. Clients that determine to engage Registrant on a
non-discretionary investment advisory basis must be willing to accept that Registrant
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cannot effect any account transactions without obtaining prior consent to such
transaction(s) from the client. Thus, in the event that Registrant would like to make a
transaction for a client’s account (including in the event of an individual holding or general
market correction), and the client is unavailable, the Registrant will be unable to effect
the account transaction(s) (as it would for its discretionary clients) without first obtaining
the client’s consent.
Socially Responsible Investing Limitations. Socially Responsible Investing involves the
incorporation of Environmental, Social and Governance (“ESG”) considerations into the
investment due diligence process. ESG investing incorporates a set of criteria/factors used
in evaluating potential investments: Environmental (i.e., considers how a company
safeguards the environment); Social (i.e., the manner in which a company manages
relationships with its employees, customers, and the communities in which it operates);
and Governance (i.e., company management considerations). The number of companies
that meet an acceptable ESG mandate can be limited when compared to those that do
not and 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 limited 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. Registrant does not maintain or advocate an ESG
investment strategy but will seek to employ ESG if directed by a client to do so. If
implemented, Registrant shall rely upon the assessments undertaken by the unaffiliated
mutual fund, exchange traded fund or separate account portfolio manager to determine
that the fund’s or portfolio’s underlying company securities meet a socially responsible
mandate.
Other Services. The Registrant provides its clients with other services such as Qualified
Plan Provider Search and Independent Manager Search. The costs of these services are
generally included in our services for current clients. However, for prospective clients,
we reserve the right to charge separately for these services as agreed to by and between
the Registrant and client in advance.
Retirement Rollovers. 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 (whether it is from an employer’s plan or an existing IRA), 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, whether it is from an employer’s plan or an existing IRA.
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 designated
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professionals, and is expressly authorized to rely thereon. It remains the client’s
responsibility to promptly notify the Registrant if there is ever any change in their financial
situation or investment objectives so that the Registrant can review and revise its
previous recommendations and/or services.
Cybersecurity Risk. The information technology systems and networks that Registrant
and its third-party service providers use to provide services to Registrant’s clients employ
various controls, which are designed to prevent cybersecurity incidents stemming from
intentional or unintentional actions that could cause significant interruptions in
Registrant’s operations and result in the unauthorized acquisition or use of clients’
confidential or non-public personal information. Clients and Registrant 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 Registrant has established procedures to
reduce the risk of cybersecurity incidents, there is no guarantee that these efforts will
always be successful, especially considering that Registrant 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.
Disclosure Statement. A copy of the Registrant’s written disclosure statement and Client
Relationship Summary, as set forth on Part 2 of Form ADV and Form CRS respectively,
shall be provided to each client before, or contemporaneously with, the execution of the
Investment 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. The Registrant does not participate in a wrap fee program.
E. As of December 31, 2023, the Registrant had $1,753,929,823 in assets under
management and $423,122,733 in assets under consultation. Of the assets under
management, $1,217,413,586 were managed on a discretionary basis and $423,122,733
were managed on a non-discretionary basis.