A. Westside Investment Management (the “Registrant”) was originally formed as a
limited liability company on June 28, 2010, in the state of California. On January
1st, 2015, the Registrant converted to a corporation and operated as Westside
Investment Management, Inc. As of January 19, 2022, the Registrant now operates
as Westside Investment Management, LLC. The Registrant became registered as
an Investment Adviser Firm in August 2010. The Registrant is owned by David T.
Clark and James M. Frawley, the Registrant’s shareholders.
B.
INVESTMENT ADVISORY SERVICES
The Registrant provides discretionary investment advisory services on a fee basis.
The Registrant’s annual investment advisory fee is based upon a percentage (%)
of the market value of the client’s assets placed under the Registrant’s
management.
The Registrant’s annual investment advisory fee typically includes investment
advisory services and financial planning and consulting services. In the event the
client requires extraordinary planning and/or consultation services (to be
determined in the sole discretion of the Registrant), Registrant may determine to
charge for such additional services, the dollar amount of which shall be set forth in
a separate written notice to the client.
Before engaging Registrant to provide investment advisory services, clients are
required to enter into an Agreement setting forth the terms and conditions of the
engagement (including termination), describing the scope of the services to be
provided, and the fee that is due from the client. Before providing investment
advisory services, an investment adviser representative will ascertain each client’s
investment objectives. Thereafter, Registrant will allocate and/or recommend that
the client allocate investment assets consistent with the designated investment
objectives. Once allocated, Registrant provides ongoing monitoring and review of
account performance, asset allocation and client investment objectives.
SERVICES AVAILABLE THROUGH SEI THIS PROGRAM IS FOR EXISTING
CLIENTS ONLY AND IS NO LONGER OFFERED TO NEW CLIENTS
Managed Accounts Program:
Registrant participates in the Managed Accounts Program (the “MAP”) sponsored
by SEI Investments Management Corporation (“SEI”), a registered investment
adviser. To participate in the MAP, Registrant, SEI and each client investor execute
a tri-party agreement (a “Managed Account Agreement”) providing for the
management of certain clients’ assets. Pursuant to the Managed Account
Agreement, the client appoints Registrant as its investment adviser to assist the
client in selecting an asset allocation strategy, which would include a percentage of
client assets allocated to designated portfolios of separate securities (each, a
“Separate Account Portfolio”) and may include a percentage of assets allocated to
a portfolio of mutual funds sponsored by SEI or its affiliates. The client appoints SEI
to manage the assets in each Separate Account Portfolio in accordance with a
strategy selected by the client together with Registrant. SEI may delegate its
responsibility for selecting particular securities to one or more portfolio managers.
The MAP seeks to provide a globally diversified portfolio in order to meet a client's
long-term investment goals. Registrant provides recommendations regarding a
client's asset allocation strategy and the choice of portfolio managers within the
program on a non-discretionary basis only. All changes require the prior approval of
the client. Registrant will recommend changes to the client based on the individual
needs of the client and changes within the MAP.
Clients should refer to SEI’s program disclosure document for a full description of
the services offered in the MAP.
Mutual Fund Allocation Program:
Registrant manages client portfolios through the SEI Mutual Fund Allocation
Program (the "Mutual Fund Program"). In this program, SEI provides advisory
services to Registrant (but not to the client) involving the structure and design of
asset allocation portfolios comprised solely of mutual funds advised by SEI. SEI also
advises Registrant with respect to reallocation and rebalancing of investments within
such asset allocation programs.
The Mutual Fund Program is designed as follows:
1. Registrant will determine the client's current financial situation, financial
goals and attitudes towards risk through various analyses and questionnaires. This
process will help Registrant review the client's situation and enable Registrant to
recommend an initial asset allocation based on the client's specific needs and goals.
2. In determining the initial allocation to be used, Registrant will use several
model portfolios of no-load mutual funds provided to Registrant by SEI. Registrant
will, if appropriate, suggest modifications to these models to more adequately
address the client's individual needs.
3. The client may place reasonable restrictions on the nature of the funds held
in the portfolio or the allocation among the various classes, and Registrant will assist
the client in understanding and evaluating the potential impact of these restrictions
on the model portfolios. Once the client's asset allocation has been established, the
portfolio will be implemented using the mutual funds advised by SEI. SEI selects the
investment managers of the underlying mutual funds. SEI utilizes institutional
investment management firms. The fund managers are monitored by SEI to ensure
that their investment styles and performance remain consistent with the objectives
of the mutual funds.
4. Accounts will be monitored at least semi-annually and, when appropriate,
Registrant will suggest a reallocation of the portfolio based on changing economic
conditions or changes in the client's individual circumstances. These suggested
reallocations will be implemented without prior notice to discretionary clients. For
nondiscretionary clients, Registrant will obtain the client's prior approval for all such
changes.
5. As economic or market changes occur; SEI will make a quarterly review of
its model allocations and may recommend changes in these model allocations to
Registrant. SEI will automatically reallocate all client holdings in model portfolios
unless instructed to do otherwise by Registrant. If Registrant does not contact SEI
prior to the first Friday of the month following the end of each calendar quarter, SEI
will take Registrant's silence as a direction from Registrant to make the
recommended reallocations. SEI will not, however, make any ongoing
recommendations concerning portfolios which deviate from SEI's models ("Custom
Portfolios"). Registrant is responsible for all reviews of Custom Portfolios and must
instruct SEI to make any changes to such portfolios.
Clients may also instruct SEI to automatically rebalance the client's account if the
allocation among the underlying mutual funds deviates from the prescribed quarterly
allocation by greater than a 2% variance. For the tax-managed models, the variance
is 3%. Rebalancing occurs monthly, with no transaction fees.
Should the client's individual situation change, the client should notify Registrant,
who will assist the client in revising the current portfolio and/or re-evaluate their
financial situation to determine if a different model portfolio would be appropriate to
the client's new situation.
Registrant will provide services to Mutual Fund Allocation Program accounts on a
discretionary basis.
Clients should refer to SEI’s disclosure document for a full description of the services
offered in the Mutual Fund Program.
Clients should refer to the applicable SEI disclosure documents for a full description
of the fees charged in the MAP and the Mutual Fund Allocation Program.
MONEY MANAGER SEARCH AND MONITORING
Registrant may also perform management searches of various independent
investment advisers on behalf of a client. Registrant will typically recommend
advisers available on “Manager Access Select,” a separate account platform
sponsored and maintained by LPL Financial (“LPL”).
Based on a client's individual circumstances and needs, Registrant will determine
which independent adviser's portfolio management service is appropriate for that
client. Factors considered in making this determination include account size, risk
tolerance, the opinion of each client, and the investment philosophy of the
independent adviser. Clients should refer to the independent adviser's disclosure
document for a full description of the services offered. Registrant will meet with the
client on a periodic basis to review the account.
Once Registrant determines which selected investment adviser(s) are most
appropriate for the client, Registrant will provide the selected investment adviser(s)
with the client's personal investment policy. The selected investment adviser(s) will
then create and manage the client's portfolio based upon the client's individual
needs as exhibited in the client's personal investment policy.
Registrant will continuously monitor the performance of the selected investment
adviser(s). If Registrant believes that a particular independent adviser is performing
inadequately, or if Registrant believes that a different manager is more suitable for
a client's particular needs, then Registrant may suggest that the client contract with
a different adviser. Where Registrant has been provided with appropriate
discretionary authority by the client, Registrant will remove the client's assets from
that selected investment adviser(s) and place the client's assets with another
investment adviser(s) at Registrant’s discretion.
FINANCIAL PLANNING AND CONSULTING (STAND-ALONE)
The Registrant be engaged to provide financial planning and/or consulting services
(including investment and non- investment related matters, including estate
planning, insurance planning, etc.) on a stand-alone separate fee basis. Registrant’s
planning and consulting fees may vary depending upon the level and scope of the
service(s) required and the professional(s) rendering the service(s). The client maybe
charged an hourly or fixed rate depending upon level and scope of service.
Prior to engaging the Registrant to provide planning or consulting services, clients
are generally required to enter into a Consulting Services 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, including the Registrant’s representatives in their
individual capacities as registered representatives of a broker-dealer and/or licensed
insurance agents. (See disclosure at Item 10.C below). 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 such recommended professional, and a dispute arises
thereafter relative to such engagement, the client agrees to seek recourse
exclusively from and against 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 for the purpose of
reviewing, evaluating or revising Registrant’s previous recommendations and/or
services.
RETIREMENT CONSULTING
The Registrant also provides retirement plan consulting/management services,
pursuant to which it assists sponsors of self-directed retirement plans organized
under the Employee Retirement Security Act of 1974 (“ERISA”). The terms and
conditions of the engagement shall be set forth in a Retirement Plan Services
Agreement between the Registrant and the plan sponsor.
If the plan sponsor engages the Registrant in an ERISA Section 3(21) capacity, the
Registrant will assist with the selection and/or monitoring of investment options
(generally open-end mutual funds and exchange traded funds) from which plan
participants shall choose in self-directing the investments for their individual plan
retirement accounts. If the plan sponsor chooses to engage the Registrant in an
ERISA Section 3(38) capacity, Registrant may provide the same services as
described above, but may also: create specific asset allocation models that
Registrant manages on a discretionary basis, which plan participants may choose
in managing their individual retirement account; and/or modify the investment
options made available to plan participants on a discretionary basis.
MISCELLANEOUS
Non-Investment Consulting/Implementation Services. To the extent requested
by the client, the Registrant may provide consulting services regarding non-
investment related matters, such as estate planning, tax planning, insurance, etc.
Neither the Registrant, nor any of its
representatives, serves as an attorney or an
accountant and no portion of the Registrant’s services should be construed as same.
To the extent requested by a client, the Registrant may recommend the services of
other professionals for certain noninvestment implementation purposes (i.e.,
attorneys, accountants, insurance, etc.), including representatives of the Registrant
in their separate registered/licensed capacities as discussed below. 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 such recommended professional, and a dispute arises
thereafter relative to such engagement, the client agrees to seek recourse
exclusively from and against the engaged professional.
It remains the client’s responsibility to promptly notify the Registrant if there is ever
any change in his/her/its financial situation or investment objectives for the purpose
of reviewing/evaluating/revising Registrant’s previous recommendations and/or
services.
Socially Responsible (ESG) 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.
Retirement Rollovers-Potential for Conflict of Interest: 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). The
Registrant does not make recommendations regarding rollovers. Instead, if
requested, the Registrant may provide educational information to clients to assist
the client with determining whether a Rollover is appropriate for their situation. 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.
Private Investment Funds. Registrant may provide investment advice regarding
private investment funds. Registrant, on a non-discretionary basis, may recommend
that certain qualified clients consider an investment in private investment funds, the
description of which (the terms, conditions, risks, conflicts and fees, including
incentive compensation) is set forth in the fund’s offering documents. Registrant’s
role relative to unaffiliated private investment funds shall be limited to its initial and
ongoing due diligence and investment monitoring services. If a client determines to
become an unaffiliated private fund investor, the amount of assets invested in the
fund(s) shall be included as part of “assets under management” for purposes of
Registrant calculating its investment advisory fee. Registrant’s fee shall be in
addition to the fund’s fees. Registrant’s clients are under absolutely no obligation to
consider or make an investment in any private investment fund(s).
Risks: 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 own, 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 the client
is qualified for investment in the fund, and acknowledges and accepts the various
risk factors that are associated with such an investment.
Valuation: In the event that Registrant references private investment funds owned
by the client on any supplemental account reports prepared by Registrant, the
value(s) for all private investment funds owned by the client shall reflect the most
recent valuation provided by the fund sponsor. However, if subsequent to purchase,
the fund has not provided an updated valuation, the valuation shall reflect the initial
purchase price. If subsequent to 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 a further updated value.
As result of the valuation process, if the valuation reflects initial purchase price or an
updated value subsequent to purchase price, the current value(s) of an investor’s
fund holding(s) could be significantly more or less than the value reflected on the
report. Unless otherwise indicated, Registrant shall calculate its fee based upon the
latest value provided by the fund sponsor.
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 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.
eMoney Advisor Platform. Registrant may provide its clients with access to an
online platform hosted by “eMoney Advisor” (“eMoney”). eMoney allows a client to
view their complete asset allocation, including those assets that Registrant does not
manage (the “Excluded Assets”). Registrant does not provide investment
management, monitoring, or implementation services for the Excluded Assets.
Therefore, Registrant shall not be responsible for the investment performance of the
Excluded Assets. The client may choose to engage Registrant to manage some or
all of the Excluded Assets pursuant to the terms and conditions of an Agreement
between Registrant and the client.
The eMoney platform also provides access to other types of information, including
financial planning concepts, which should not, in any manner whatsoever, be
construed as services, advice, or recommendations provided by Registrant. Finally,
Registrant shall not be held responsible for any adverse results a client may
experience if the client engages in financial planning or other functions available on
the eMoney platform without Registrant’s assistance or oversight.
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 its systems to reduce
the risk of cybersecurity incidents from coming to fruition, 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.
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 professionals
and is expressly authorized to rely thereon. Moreover, each client is advised that it
remains their responsibility to promptly notify the Registrant if there is ever any
change in their financial situation or investment objectives for the purpose of
reviewing, evaluating or revising Registrant’s previous recommendations and/or
services.
Disclosure Statement. A copy of the Registrant’s written Brochure as set forth on
Part 2 of Form ADV and Client Relationship Summary as set forth in Form CRS shall
be provided to each client prior to, or contemporaneously with, the execution of the
Investment Advisory Agreement or Financial Planning and Consulting 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 $659,440,332 in assets under
management on a discretionary basis.