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Who We Are
Rainey & Randall Investment Management, Inc. (hereinafter referred to as “Rainey & Randall”,
the “Company” “we”, “us” and “our”) is a registered investment advisor1 formed in February
1999 as a Florida corporation.
Owners
The following persons control Rainey & Randall:
Name Title CRD#
Michael D. Rainey Chief Executive Officer 2316398
Wayne F. Randall President 2173538
Assets Under Management
As of December 31, 2023, our assets under management totaled:
Client Discretionary Managed Accounts ......................... $761,783,637
We do not offer non-discretionary investment management services.
Our Mission
Our mission is to assist you, our client2, in dealing with the vast array of financial alternatives3
and implications of life events with one overall objective in mind – preserve and expand your
assets in a manner appropriate with your given level or risk.
What We Do
We offer financial solutions that stress fiscal responsibility and shrewd planning that is not
always about the accumulation of assets, which we believe has little to do with real happiness,
but what is best for your personal health and well-being.
Some of the best advice we could ever offer you is that success, achievement, and
contentment in life have little to do with personal wealth but are instead related to lifestyle
choices. These lifestyle choices are your unique values, life goals, and plans. Therefore, the
economic solutions we develop, whether portfolio management and/or financial planning,
reflects how you define true wealth, not us. Our services include:
1 The term “registered investment advisor” is not intended to imply that Rainey & Randall Investment Management, Inc. has attained a certain level of skill
or training. It is used strictly to reference the fact that we are “registered” as a licensed “investment advisor” with the United States Securities and
Exchange Commission – and with such other State Agencies that may have limited regulatory jurisdiction over our business practices.
2 A client could be a high net-worth individual and their family members, a family office, a foundation or endowment, a charitable organization, a
corporation and/or small business, a trust, a guardianship, an estate, or any other type of entity to which we choose to give investment advice.
3 Rainey & Randall Investment Management, Inc. is a fiduciary, as defined within the meaning of Title I of the Employer Retirement Income Security Act of
1974 (“ERISA”) and/or as defined under the Internal Revenue Code of 1986 (the “Code”) for any financial alternative services provided to a client who is:
(i) a plan participant or beneficiary of a retirement plan subject to ERISA or as described under the Code; or (ii) the beneficial owner of an Individual
Retirement Account (“IRA”).
Portfolio Management
Our Portfolio management strategies focus on designing a portfolio allocation of primarily
investment company (“mutual fund”) products, a small mix of equity (“stock”) positions,
fixed income (“bond”) instruments, and exchange traded funds (“ETFs”) to achieve the best
return on your investment capital.
With the complexity of today’s marketplace, it is critical for us to understand who you are
and what you want to accomplish financially. Our initial meetings with you, and the profile
questionnaires4 we have you complete, help us have a clearer picture of your personal
finances, investment return expectations, time horizon, and risk tolerance so that we can
develop a successful investment strategy and tailored asset allocation guideline unique to
your investment objectives. If you have difficulty expressing your monetary needs or do not
truly have a grasp of your overall personal finances, a financial plan may be suggested before
proceeding with any portfolio management services.
Our meetings with you to discuss your finances, and, if necessary, develop a financial plan,
will help to eliminate much of the guesswork in achieving the security and independence you
desire and simplify your financial alternatives. In return, we will have:
v Defined and narrowed objectives and investment options;
v Identified areas of greatest distress;
v Developed a strategy for addressing concerns about the future;
v Cultivated peace of mind; and,
v Created a unique picture of your overall economic personality.
Once your financial parameters have been identified, we will prepare a policy allocation
statement that outlines what asset mix is most suitable for your unique investment
expectations and risk tolerance. This investment plan will guide us in the management of
your account(s), and as a standard against which to measure future results and to make
modifications where necessary.
You will find more information about our management fees and services under “Portfolio
Management” in Item 5, “Fees & Compensation” and further description of our management
style under Item 8, “Methods of Analysis, Investment Strategies & Risk of Loss.”
Financial Planning
Financial planning is one of the most important services that successful people use to create
an extraordinary personal life and business career. However, it requires a lifetime
commitment, not only from us, the Financial Planner, but from you as well.
What is a Financial Plan?
Financial planning is an evaluation of the investment and financial options available to you
based upon your defined lifestyle choices. Planning includes: (i) attempting to make
optimal decisions; (ii) projecting the consequences of these decisions for you in the form of
a financial plan – a working blueprint; and, (iii) implementing the protocol to achieve the
objectives of the plan. Once complete, the plan is then used to compare future
performance against the working blueprint.
4 The profile questionnaires we use are important tools in gathering information about your investment methodology, risk tolerance, income/tax bracket,
liquidity, time horizons, etc. If you elect not to answer these questionnaires or choose to respond with limited input, it is possible that we could operate in
a handicapped capacity contrary to your investment needs. Therefore, if you desire the most effective and accurate recommendations regarding your
managed account(s), you should make every effort to provide us with your detailed personal needs and objectives, along with detailed financial and tax
information.
Financial Planning Composition
A financial plan may encompass one or more of the following areas of financial need as
communicated by you:
v Personal – Family records, budgeting, personal liability, estate information and
financial goals.
v Education – Education IRAs, financial aid, and state savings plans including 529
plans, grants and general assistance in preparing to meet dependents’ continuing
education needs.
v Taxes and Cash Flow – Understanding the impact of various investments on
current and future income tax liability.
v Survivor and Beneficiary Planning – Cash needs at death, income needs of
surviving dependents, estate planning and income analysis.
v Estate – Reviewing wills, trusts, and other estate planning documents to
determine if you should seek the assistance of an estate-planning attorney.
Reviewing powers of attorney, nursing home and assisted living agreements,
living trusts, and Medicare/Medicaid benefits.
v Retirement – Analysis of current strategies and investment plans to help achieve
retirement goals.
v Investments – Analysis of investment alternatives including risk and return
analysis and their effect on your investment portfolio(s). Assessment of your risk
tolerance profile.
v Real Estate – Analysis of real estate investment opportunities.
v Insurance – Review of existing policies to ensure proper coverage for life, health,
disability, long-term care, liability, home and automobile.
Preparing the Financial Plan
We gather the necessary information to complete our analysis through personal interviews,
review of various documents supplied by you, and completion of one or more profile
questionnaires. Information gathered may include statements regarding your current
financial status, a list of assets, insurance, wills and/or trust documents, income and
expenses, Social Security eligibility, and other information5 based on your financial status
and future goals.
You will find more information about our financial planning fees under “Financial Planning”
below in Item 5, “Fees & Compensation.”
Retirement Plans
We assist ERISA-qualified retirement and savings plans in the design of the fiduciary
governance structure and with the development of an investment management program. Our
services under ERISA are to act as a Limited-Scope 3(21) Fiduciary. As such, we
acknowledge we have a co-fiduciary role but do not take discretion or act as a 3(38)
Fiduciary to construct an investment menu, select and monitor money managers, mutual
funds, or ETFs or to replace the investment options within the plan.
Our responsibility to the plan sponsors and/or named fiduciary of the retirement plan
includes:
v Educating plan participants about general investment principles and the investment
alternatives available under the retirement plan.
5 All information provided by and to you will be kept entirely confidential. Such information will be disclosed to third parties only with mutual written
consent or as may be permitted by law.
v Assisting plan participants with investments available in the plan consistent with
the Department of Labor’s definition of investment education as described in their
Interpretive Bulletin 96-1.6
v Assist in the group enrollment meetings designed to increase retirement plan
participation among employees and investment and financial understanding by the
employees.
Fees for our retirement planning are disclosed below under “Retirement Plans” in Item 5,
“Fees & Compensation.”
FEES & COMPENSATION
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Portfolio Management
Portfolio management is provided on a asset-based fee arrangement. Management fees are
calculated based on the aggregate market value of your account on the last business day of the
previous calendar quarter multiplied by one-fourth of the corresponding annual percentage
rate for each portion of your portfolio assets that fall within each tier (See “Billing” below
under “Protocols for Portfolio Management” for more information.).
We retain discretion to negotiate the management fee within each tier on a client-by-client
basis depending on the size and complexity of the portfolio managed. In addition, fee breaks
occur as assets in your portfolio increase past the following tiers:
Account Value
Annual Fee
Rate
Not to Exceed
Asset Mix/Option Trading Portfolios
First $500,000 ................................................. 1.25%
Next $500,000 ................................................. 1.15%
Next $1,000,000 .............................................. 0.95%
Next $3,000,000
.............................................. 0.75%
Next $2,500,000 .............................................. 0.50%
Next $2,500,000 .............................................. 0.35%
Next $15,000,000 ............................................. 0.25%
Over $25,000,000 ............................................. 0.20%
We generally require a minimum initial investment of $100,000 to open a managed account;
however, we retain the right to waive or reduce this minimum if we choose to do so.
Protocols for Portfolio Management Services
The following protocols establish how we handle our portfolio management accounts and
what you should expect when it comes to: (i) managing your account; (ii) your bill for
investment services; and (iii) other fees charged to your account(s).
6 The Company is not providing fiduciary advice (as defined under ERISA) to the participants. The Company will not provide investment advice concerning the
prudence of any investment option or combination of investment options for a particular participant or beneficiary under the retirement plan.
Discretion
We will establish discretionary trading authority on all management accounts to execute
securities transactions at any time without your prior consent or advice. At any time
however, you may impose restrictions, in writing, on our discretionary authority (i.e., limit
the types/amounts of particular securities purchased for your account, exclude the ability
to purchase securities with an inverse relationship to the market, limit our use of leverage,
etc.)
Billing
Your account will be billed quarterly in advance based on the fair market value for the
portion of your portfolio that falls within each tier of our fee schedule. As your portfolio
value increases into the next tier level, either through additional deposits or asset growth,
the amount of assets above the fee-break will be billed the corresponding annual fee rate.
This results in a blended fee and effectively lowers the annual fee costs to manage your
portfolio.
For example:
Sample Portfolio Value: $1,300,000
Tier Fee-Breaks
(The $1.3 Million Broken Down Into Each Tear Level)
Annual Fee %
(Per Tier)
Tier Fee Contribution
(Based on the Account Value Within Each Tier)
$500,000 1.25% 0.481%
$500,000 1.15% 0.442%
$300,000 0.95% 0.219%
Blended Annual Fee % 1.142%
For new managed accounts opened in mid-quarter, our fee will be based upon a pro-rata
calculation of the fair market value of your assets to be managed for the period. Advisory
fees will be deducted first from any money market funds or cash balances. If such assets
are insufficient to satisfy payment of such fees, a portion of the account assets will be
liquidated to cover the fees.
Deposits and Withdrawals
Assets deposited by you into your portfolio management account between billing cycles will
not result in additional management fees being billed to your account unless such deposits
exceed $25,000. Such deposits of this amount or greater, in most cases, will require
modifications and adjustments to your investment allocation. Therefore, we reserve the
right to bill your account a pro-rated fee based upon the number of days remaining in the
current quarterly period for deposits exceeding the above amount.
For assets you may withdraw during the quarter, we do not make partial refunds of our
portfolio management fee. Just as with deposits, withdrawals from your account will
require modifications and adjustments to be made to correct the allocation of assets in
your portfolio.
Fee Exclusions
The above fees for all of our management services are exclusive of any charges imposed by
the custodial firm including, but not limited to: (i) any Exchange/SEC fees; (ii) certain
transfer taxes; (iii) service or account charges, including, postage/handling fees, electronic
fund and wire transfer fees, auction fees, debit balances, margin interest, certain odd-lot
differentials and mutual fund short-term redemption fees; and (iv) brokerage and
execution costs associated with securities held in your managed account. There can also
be other fees charged to your account that are unaffiliated with our management services.
In addition, all fees paid to us for portfolio management services are separate from any
fees and expenses charged on mutual fund shares by the investment company or by the
investment advisor managing the mutual fund portfolios. These expenses generally include
management fees and various fund expense, such as: redemption fees, account fees, and
purchase fees may occur but are the exception within managed accounts at institutional
custodians. A complete explanation of these expenses charged by the mutual funds is
contained in each mutual fund’s prospectus. You are encouraged to carefully read the
fund prospectus.
Termination of Investment Services
To terminate our investment advisory services, either party (you or us) by written
notification to the other party, may terminate the Investment Advisory Agreement at any
time, provided such written notification is received at least 30 days prior to the date of
termination (i.e.; To terminate services on October 1st, a request for termination should be
received in our office by September 1st.). Such notification should include the date the
termination will go into effect along with any final instructions on the account (i.e., liquidate
the account, finalize all transactions and/or cease all investment activity).
In the event termination does not fall on the last day of a calendar quarter, you shall be
entitled to a pro-rated refund of the prepaid quarterly management fee based upon the
number of days remaining in the quarter after the termination notice goes into effect. Once
the termination of investment advisory services has been implemented, neither party has any
obligation to the other – we no longer earn management fees or give investment advice and
you become responsible for making your own investment decisions.
Financial Planning
How we charge to develop a financial plan depends on the size, complexity, and nature of your
personal and financial situation and the amount of time it will take to analyze and summarize
the plan and perform the services you desire.
Planning Fees
We reserve the option to waive our financial planning fees should you want us to manage
your investment portfolio. Our financial planning services are offered on our hourly rate not
to exceed $225.00. Such fee will be fully disclosed up-front in a Financial Planning
Agreement (“Agreement”), which will include the cost7 to review your financial information
and prepare the desired financial planning service. We have the option to: (i) require full
payment up-front; or, (ii) require one-half the fee be paid at the time the Agreement is
signed, with the remaining balance due upon completion of the financial plan8.
Annual Retainer Fee
It is important to note that any planning is kinetic (always in motion) and alive. A financial
plan is a roadmap that is only as good as how well it reflects your current economic position
7 Rarely will a fee exceed those costs outlined in the Agreement. However, there can be instances where we did not contract with you to perform a
particular task and therefore merit notifying you of the additional cost prior to beginning such services.
8 The recommendations made in a financial plan are generally completed within 30 to 45 days from you signing the Agreement. However, implementing the
plan using outside professionals (i.e., attorneys, CPAs, etc...) may require additional time that is out of our control. Therefore when we refer to the
completion of the financial plan, we are referring to us (you and the Company) finalizing your financial benchmarks/objectives before approaching any
outside professional.
to then guide you on a clear path to a future financial destination. However, you can veer
off course, intentionally or unintentionally, as circumstances in your life take you down
another path. Our annual financial plan review is designed to systematically address these
unexpected diversions and continually keep you on the right road headed to your future
financial destination.
Therefore, we strongly suggest that the overall financial plan be reviewed not less than on an
annual basis. If you want us to annually review your financial plan, we will notify you of the
annual cost to perform the desired work at the beginning of each year. Generally, our
retainer fee will be equal to one-half of the financial planning fee we original charged. As
with the initial planning fee, we have the option to waive the annual retainer if we are
managing your investment portfolio.
Termination
You can terminate the Agreement at any time prior the presentation of the any financial
planning documents. We will be compensated through the date of termination for time
spent in design of such financial documents at the hourly rate agreed to in the Agreement. If
you have prepaid any fees, such fees will be returned on a pro-rata basis. After the financial
plan has been completed and presented to you, termination of the Agreement is no longer an
option.
Retirement Plans
As a Limited-Scope 3(21) Fiduciary our primary responsibility to the plan sponsors and/or
named fiduciary will be to assist plan participants with understanding general investment
principles under the plan, increase participation among employees at group enrollment
meetings, and monitor the retirement plan service providers to insure the plan is being services
as agreed.
Retirement Plan Fees
Retirement planning services are provided on an asset-based fee arrangement and the
retirement plan service provider will administer such fees. The plan providers will disclose
all fees to the plan sponsors and/or named fiduciary in a retirement planning agreement.
The fees that will be charged to retirement plan will include, but are not limited to:
1. The plan provider’s platform fees (plan level and participant level fees);
2. The investment manager’s management fee, if any, along with other management
costs; and,
3. Our fee (not to exceed 0.50%) that the Plan/Service Provider will pay us from the
total fee collected.
Separate Agreement
The agreement that the plan sponsor signs with the retirement plan service provider is
separate and distinct from any portfolio management or financial planning services the
Company offers individuals. If the plan sponsors or participants desire individual portfolio
management or financial planning services for assets held outside and separate from their
retirement plan, a separate portfolio management or financial planning agreement will be
required for that specific service.
PERFORMANCE-BASED FEES & SIDE-BY-SIDE MANAGEMENT
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We do not charge fees based on a share of capital gains or the capital appreciation of the
assets held in your accounts.