A. JCN Financial & Tax Advisory Group (the “Registrant”) is a limited liability company
formed in the state of Louisiana. The Registrant is owned by John Neyland. Mr. Neyland
is also the Registrant’s Managing Member.
B.
INVESTMENT ADVISORY SERVICES
The Registrant provides discretionary investment advisory services on a wrap or non-wrap
fee basis. However, the Registrant is no longer offering wrap fee services to new advisory
clients. Prior to engaging the Registrant to provide investment advisory services, clients
are required to enter into an Investment Advisory Agreement which contains the terms and
conditions of the engagement.
To begin the investment advisory process, an investment adviser representative will first
determine the client’s investment objectives and goals and then invest the client’s assets
consistent with their objectives and goals. Once invested, Registrant provides periodic
monitoring and review of account performance and compares the account’s asset allocation
with the client’s investment objectives.
When requested by the client, financial planning and consulting services will generally be
provided. In the event that the client requires extraordinary planning or consultation
services, the Registrant may determine to charge for these additional services in its sole
discretion. Prior to charging for these services, the Registrant will provide the client with
a separate written notice listing the cost of these additional services.
JCN FINANCIAL & TAX ADVISORY GROUP WRAP PROGRAM
The Registrant provides investment management services on a wrap fee basis to existing
clients in accordance with the Registrant’s investment management wrap fee program (the
“Program”). Although the Program is no longer offered to new clients, the services offered
under, and the corresponding terms and conditions pertaining to, the Program are discussed
in the Wrap Fee Program Brochure. Under the Program, the Registrant is able to offer
participants discretionary investment management services, for a single specified annual
Program fee, inclusive of trade execution, custody, reporting, account maintenance,
investment management fees, and fees charged by independent managers. However, clients
may pay fees for, but not limited to, trustee fees, mutual fund expenses, ETF expenses,
mark-ups, mark-downs, or spreads paid to market makers from whom securities were
obtained by the broker. Such fees are in addition to any fees paid to Registrant and are
between the client and the account custodian. The current annual Program fee ranges from
negotiable to 2.20%, depending upon the amount and type of the Program assets.
The terms and conditions for client participation in the Program are set forth in detail in
the Wrap Fee Program Brochure, which is available to all Program participants in
accordance with the disclosure requirements of Part 2A Appendix 1 of Form ADV. TD
Ameritrade Institutional, a division of TD Ameritrade, Inc. Member of FINRA/SIPC
(“Ameritrade”) shall serve as the custodian for Program accounts.
As indicated in the Wrap Fee Program Brochure, participation in the Program may cost
more or less than purchasing such services separately. As also indicated in the Wrap Fee
Program Brochure, the Program fee charged by Registrant for participation in the Program
may be higher or lower than those charged by other sponsors of comparable wrap fee
programs.
Beginning in January 2020, TD Ameritrade (“Ameritrade”), stopped charging transaction
fees for individual equities (i.e., common stocks and ETFs). As the result of Ameritrade’s
decision, total transaction fees paid by Registrant under the Registrant’s wrap program
decreased. Registrant did not alter its advisory fee schedule as result of this change.
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
The Registrant may 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 are negotiable, but generally range from $500 to $5,000 on a fixed 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 planning or consulting services, clients are
generally required to enter into a Financial Planning and 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, including Mr. Neyland in his individual capacity as a licensed insurance agent.
(See disclosure below at Items 10.C).
The client is under no obligation to engage the services of any such recommended
professionals. The client retains absolute discretion over all such implementation decisions
and is free to accept or reject any recommendation from the Registrant.
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, insurance, etc. Neither the Registrant, nor any of its
representatives, serves as an attorney or accountant and no portion of the Registrant’s
services should be construed otherwise.
To the extent requested by a client, the Registrant may recommend the services of other
professionals for certain non-investment implementation purposes (i.e. attorneys,
accountants, insurance, etc.), including Mr. Neyland in his individual licensed capacity 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 recommended unaffiliated professional, and a dispute arises
thereafter relative to such engagement, the client agrees to seek recourse exclusively from
and against the engaged professional.
At all times, the engaged licensed professional[s] (i.e. attorney, accountant, insurance
agent, etc.), and not the Registrant, shall be responsible for the quality and competency of
the services provided.
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 Plan Rollovers – No Obligation / 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). 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, 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.
Use of Mutual Funds and Exchange Traded Funds: Most mutual funds and exchange
traded funds (“ETFs”) are available directly to the public. Therefore, a client or prospective
client can obtain many of the mutual funds or ETFs that may be recommended and/or
utilized by Registrant independent of engaging Registrant as an investment advisor.
However, if a client or prospective client determines to do so, they will not receive
Registrant's initial and ongoing investment advisory services.
Portfolio Activity. Registrant has a fiduciary duty to provide services consistent with the
client’s best interest. As part of its investment advisory services, Registrant will review
client portfolios on an ongoing basis to determine if any changes are necessary based
upon
various factors, including, but not limited to, investment performance, fund manager
tenure, style drift, account additions/withdrawals, and/or a change in the client’s
investment objective. Based upon these factors, there may be extended periods of time
when Registrant determines that changes to a client’s portfolio are neither necessary nor
prudent. Clients nonetheless remain subject to the fees described in Item 5 below during
periods of account inactivity.
Cryptocurrency. For clients who want exposure to cryptocurrencies, including Bitcoin,
the Registrant, will advise the client to consider a potential investment in corresponding
exchange traded securities, or an allocation to separate account managers and/or private
funds that provide cryptocurrency exposure. Crypto is a digital currency that can be used
to buy goods and services, but uses an online ledger with strong cryptography (i.e., a
method of protecting information and communications through the use of codes) to secure
online transactions. Unlike conventional currencies issued by a monetary authority,
cryptocurrencies are generally not controlled or regulated and their price is determined by
the supply and demand of their market. Because cryptocurrency is currently considered to
be a speculative investment, the Registrant will not exercise discretionary authority to
purchase a cryptocurrency investment for client accounts. Rather, a client must expressly
authorize the purchase of the cryptocurrency investment.
The Registrant does not recommend or advocate the purchase of, or investment in,
cryptocurrencies. The Registrant considers such an investment to be speculative.
Clients who authorize the purchase of a cryptocurrency investment must be prepared for
the potential for liquidity constraints, extreme price volatility and complete loss of
principal.
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. Account custodians generally require that cash proceeds from
account transactions or cash deposits be swept into and/or initially maintained in the
custodian’s sweep account. The yield on the sweep account is generally lower than those
available in money market accounts. To help mitigate this issue, Registrant generally
purchases a higher yielding money market fund available on the custodian’s platform with
cash proceeds or deposits, 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, 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.
Account Aggregation Platform. Registrant, in conjunction with the services provided by
an account aggregation software provider, may also provide, for a separate fee, periodic
comprehensive reporting services which can incorporate all of the client’s investment
assets, including those investment assets that are not part of the assets managed by
Registrant (the “Excluded Assets”). Unless agreed to otherwise in writing, Registrant does
not provide investment management, monitoring, or implementation services for the
Excluded Assets. Unless otherwise specifically agreed to, in writing, Registrant’s service
relative to the Excluded Assets is limited to reporting only. Therefore, Registrant shall not
be responsible for the investment performance of the Excluded Assets. Rather, the client
and/or their advisor(s) that maintain management authority for the Excluded Assets, and
not Registrant, shall be exclusively responsible for such investment performance. Without
limiting the above, the Registrant shall not be responsible for any implementation error
(timing, trading, etc.) relative to 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 Investment Advisory Agreement between Registrant and the client.
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.
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.
Disclosure Statement. A copy of the Registrant’s written Brochure as set forth on Part 2
of Form ADV 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. Wrap Program-Conflict of Interest. Under the Registrant’s wrap program, the client
generally receives investment advisory services, the execution of securities brokerage
transactions, custody and reporting services for a single specified fee. When managing a
client’s account on a wrap fee basis, the Registrant shall receive as payment for its
investment advisory services, the balance of the wrap fee after all other costs incorporated
into the wrap fee have been deduct Participation in a wrap program may cost the client
more or less than purchasing such services separately. The terms and conditions of a wrap
program engagement are more fully discussed in the Registrant’s Wrap Fee Program
Brochure.
Because wrap program transaction fees and/or commissions are being paid by the
Registrant to the account custodian/broker-dealer, Registrant could have an economic
incentive to maximize its compensation by seeking to minimize the number of trades in the
client's account. See separate Wrap Fee Program Brochure.
E. As of March 10, 2023, the Registrant had $83,247,087 in assets under management on a
discretionary basis.