The Junk Investment Group, LLC (“Advisor”) is an investment advisor registered with the Securities and
Exchange Commission. The Junk Investment Group, LLC is solely owned by Eli Adams.
The Junk Investment Group, LLC offers portfolio management services through a wrap fee management
program. In our wrap fee management program, clients pay a bundled “wrap fee.” This means that advisory
services (including portfolio management) and transaction costs (including ticket charges) are provided for
one fee. Whenever a fee is charged for services described in this Wrap Fee Program Brochure, we will
receive all of the fee charged.
The Junk Investment Group, LLC absorbs transaction costs in wrap fee accounts. Additionally, The Junk
Investment Group, LLC does not charge clients higher advisory fees based on their trading activity. As
such, The Junk Investment Group, LLC may have a financial incentive not to place transaction orders in
those accounts since doing so increases its transaction costs. Thus, an incentive exists to place trades
less frequently under a wrap fee arrangement. Additionally, individual stocks and ETFs have a lower
transaction fee than mutual funds. Therefore, the firm and its investment advisor representatives have an
economic incentive to recommend stocks and ETFs over mutual funds, which is a conflict of interest.
The fees not included in the advisory fee for our wrap services are charges imposed directly by a mutual
fund, index fund, or exchange traded fund (“ETF”) which shall be disclosed in the fund’s prospectus (i.e.,
fund management fees and other fund expenses), mark-ups and mark-downs, spreads paid to market
makers, fees for trades executed away from custodian, wire transfer fees, and other fees and taxes on
brokerage accounts and securities transactions.
When making the determination of whether the advisory program available through The Junk Investment
Group, LLC is appropriate for your needs, you should bear in mind that fee-based accounts, when
compared with commission-based accounts, often result in lower costs during periods when trading activity
is heavier, such as the year an account is established. However, during periods when trading activity is
lower, the fee-based account arrangements may result in a higher annual cost for transactions. Thus,
depending on a number of factors, the total cost for transactions under a fee account versus a commission
account can vary significantly. Factors which affect the total cost include account size, amount of turnover,
type and quantities of securities purchased or sold, commission rates, and your tax situation. It should also
be noted that lower fees for comparable service may be available from other sources. The exact fees and
other terms will be outlined in the agreement between you and The Junk Investment Group, LLC.
You should discuss the advantages and disadvantages of fee-based and commission-based accounts with
your Investment Advisor Representatives and you should read this Wrap Fee Disclosure Brochure carefully
as it explains, in detail, our Portfolio Management Services.
Portfolio Management Services
The Junk Investment Group, LLC offers discretionary and non-discretionary portfolio management services,
which involves the Advisor providing you with continuous and ongoing supervision over your accounts. The
Portfolio Management Services Program is a wrap fee program. In providing portfolio management
services, The Junk Investment Group, LLC will continuously monitor your account and make trades in your
accounts when necessary. Your account will be managed by The Junk Investment Group, LLC based on
your financial situation, investment objectives, and risk tolerance. The Advisor will actively monitor your
account and will make management recommendations and decisions regarding buying, selling, reinvesting
or holding securities, cash or other investments. For more information on the nature and scope of services
we offer, please see our Form ADV Part 2A Disclosure Brochure, including Items 4, 5, and 16 therein.
We recommend that your assets to be allocated to our Portfolio Management Services Program be
maintained in a brokerage account with Schwab Advisor Services division of Charles Schwab & Co., Inc.
(“Schwab”), an SEC registered broker/dealer and member NYSE/SIPC. Schwab is the qualified custodian
for all accounts established through our Portfolio Management Services Program. You will appoint The
Junk Investment Group, LLC as your investment advisor of record on specified accounts. Your account will
consist only of separate account(s) held by the qualified custodian under your name. The Junk Investment
Group, LLC does not act as custodian and does not have direct access to your funds and securities
except to have advisory fees deducted from your account with your prior written authorization. The
qualified custodian will maintain physical custody of all funds and securities of your Account, and you will
retain all rights of ownership (e.g., right to withdraw securities or cash, exercise or delegate proxy voting,
and receive transaction confirmations) for your account.
You will authorize The Junk Investment Group, LLC to have trading authorization on your account and we
will provide portfolio management services.
Fees for our portfolio management services are charged based on a percentage of assets under
management, billed in advance (at the start of the billing period) on a quarterly calendar basis. When an
account is opened, we begin charging fees at the start of the next calendar quarter, once all monies have
been deposited. The initial management fee is calculated based on the initial portfolio value. Prior to
entering into a fee arrangement, our Investment Advisor Representatives work with you on fact-finding, risk
tolerance, presentation, and implementation.
For our portfolio management services, client will be charged the following annual fee based upon the
amount of assets under management:
Total Portfolio Value Fee Rate
To $499,999 1.00%
$500,000 to $749,999 0.95%
$750,000 to $999,999 0.85%
$1,000,000 to $1,499,999 0.80%
Over $1,500,000 0.75%
There is a minimum fee of $300 per quarter. Our annual management fee is calculated based on the value
of your assets on the last business day of the previous calendar year. Our fee is paid in advance in four
equal quarterly payments (on or about April 1, July 1, October 1, and January 1). You are notified in writing
by March of each year, by way of a Fee Notification Statement, of the updated fee for the coming year.
The only compensation received by The Junk Investment Group, LLC for portfolio management services is
the annual fee as specified in the client’s investment advisory retainer agreement. The Junk Investment
Group, LLC receives no other forms of compensation in connection with providing portfolio management
services.
The Junk Investment Group, LLC believes that its annual fee is reasonable in relation to: (1) services
provided and (2) the fees charged by other local investment advisers offering similar services/programs.
However, our annual investment advisory fee may be higher than that charged by other investment advisers
offering similar services/programs.
You can choose how to pay your investment advisory fees. The investment advisory fees can be deducted
from your account and paid directly to our firm by the qualified custodian(s) of your account, or you can pay
our firm upon receipt of a billing notice sent directly to you.
If you choose to have the investment advisory fees deducted from your account, you must authorize the
qualified custodian(s) of your account to deduct fees from your account and pay such fees directly to The
Junk Investment Group, LLC. This authorization is included in the application to open an account.
You should review your account statements received from the qualified custodian(s) and verify that
appropriate investment advisory fees are being deducted. The qualified custodian(s) will not verify the
accuracy of the investment advisory fees deducted.
If you choose to pay the fees out-of-pocket, fees are due upon your receipt of a billing notice sent directly
to you. Fees for the services of our firm will be due within 30 days after your receipt of the billing notice.
Transaction ticket fees that are charged by the qualified custodian will be bundled with the fee for our
Portfolio management Services. The transaction ticket fees charged by the qualified custodian will be billed
directly to The Junk Investment Group, LLC by the qualified custodian for your account.
Management services can be terminated by either party by providing written notice to the other.
Termination is effective immediately. You are responsible for our time expended to the effective date of
termination. Time expended is calculated on a pro-rated basis of time elapsed in the quarter. The balance
(if any) of unearned fees is refunded to you.
Block Trades
Investment advisors may elect to purchase or sell the same securities for several clients at approximately
the same time when they believe such action may prove advantageous to clients. This process is referred
to as aggregating orders, batch trading or block trading. The Junk Investment Group, LLC does not engage
in block trading.
It should be noted that implementing trades on a block or aggregate basis may be less expensive for client
accounts; however, it is our trading policy to implement all client orders on an individual basis. Therefore,
we do not aggregate or “block” client transactions. Considering the types of investments we hold in advisory
client accounts, we do not believe clients are hindered in any way because we trade accounts individually.
This is because we develop individualized investment strategies for clients, and holdings will vary. Our
strategies are primarily developed for the long-term. Minor differences in price execution are not material
to our overall investment strategy.
Suitability and Investment Strategy
The Junk Investment Group, LLC will assist clients in determining their objective(s), investment strategy,
and investment suitability prior and subsequent to opening an Portfolio management account. Clients must
contact us to notify of any changes in their investment objective(s) and/or financial situation. Investment
strategies used to implement our investment advice include, but are not necessarily limited to, long-term
purchases (securities held at least a year); and margin transactions.