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portfolio on an ongoing basis. Versant has contracted with SPT to provide Versant with the Platform,
which consists of technology and related trading and account management services for the OPP.
The Platform enables Versant to make the OPP available to clients online and includes a system that
automates certain key parts of its investment process (the “System”). The System includes an online
questionnaire that helps Versant determine the client’s investment objectives and risk tolerance and
select an appropriate investment strategy and portfolio. Clients should note that Versant will
recommend a portfolio via the System in response to the client’s answers to the online questionnaire.
The client may then indicate an interest in a portfolio that is one level less or more conservative or
aggressive than the recommended portfolio, but Versant then makes the final decision and selects a
portfolio based on all the information it has about the client. The System also includes an automated
investment engine through which Versant manages the client’s portfolio on an ongoing basis through
automatic rebalancing and tax-loss harvesting (if the client is eligible and elects).
Versant charges clients a fee for its services as described below under Item 5, Fees and
Compensation. Versant’s fees are not set or supervised by Schwab. Clients do not pay brokerage
commissions or any other fees to CS&Co. as part of the OPP. Schwab does receive other revenues
in connection with the OPP, which are described below under Item 5.
Versant does not pay SPT fees for the Platform so long as it maintains $100 million in client assets in
accounts at CS&Co. that are not enrolled in the OPP. If Versant does not meet this condition, then it
must pay SPT an annual licensing fee of 0.10% of the value of its clients’ assets in the OPP. This
arrangement presents a conflict of interest, as it provides an incentive for Versant to recommend that
clients maintain their accounts at CS&Co. Notwithstanding, Versant may generally recommend to its
clients that investment management accounts be maintained at CS&Co. based on the considerations
discussed in Item 12 below, which mitigates this conflict of interest.
Clients enrolled in the OPP are limited in the universe of investment options available to them. For
example, the investment options available are limited to ETFs, whereas Versant recommends
various other types of securities in its other services. The OPP is designed to provide guidance and
professional assistance to individuals who are beginning the process of accumulating wealth.
Clients will have access to their accounts and a financial interface online but will also have the
opportunity to confer with Versant with respect to their account.
Rebalancing
The System will rebalance a client’s account periodically by generating instructions to CS&Co. to
buy and sell shares of ETFs and depositing or withdrawing funds through the “Sweep Program”,
considering the asset allocation for the client’s investment strategy. Rebalancing trade instructions
can be generated by the System when (i) the percentage allocation of an ETF varies by a set
parameter established by Versant, (ii) Versant decides to change the ETFs or their percentage
allocations for an investment strategy or (iii) Versant decides to change a client’s investment
strategy, which could occur, for example, when a client makes changes to their investment profile or
imposes or modifies restrictions on the management of their account. Accounts below $5,000 may
deviate farther than the set parameters as well as the target allocation of the selected investment
profile. Rebalancing below $5,000 may impact the ability to maintain positions in selected asset
classes due to the inability to buy or sell at least one share of an ETF. For example, withdrawal
requests may require entire asset classes to be liquidated to generate and disburse the requested
cash.
Sweep Program
Each investment strategy involves a cash allocation (“Cash Allocation”) that will be held in a sweep
program at Charles Schwab Bank (the “Sweep Program”). The Cash Allocation will be a minimum of
4% of an account’s value to be held in cash, and may be higher, depending on the investment
strategy chosen for a client. The Cash Allocation will be accomplished through enrollment in the
Sweep Program, a program sponsored by CS&Co. By enrolling in the OPP, clients consent to having
the free credit balances in their brokerage accounts at CS&Co. swept into deposit accounts (“Deposit
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Accounts”) at Charles Schwab Bank (“Schwab Bank”) through the Sweep Program.
Schwab Bank is an FDIC-insured depository institution that is a Schwab affiliate. The Sweep
Program is a required feature of the OPP. If the Deposit Account balances exceed the Cash
Allocation for a client’s investment strategy, the excess over the rebalancing parameter will be used
to purchase securities as part of rebalancing. If clients request cash withdrawals from their accounts,
this likely will require the sale of ETF positions in their accounts to bring their Cash Allocation in line
with the target allocation for their chosen investment strategy. If those clients have taxable accounts,
those sales may generate capital gains (or losses) for tax purposes. In accordance with an
agreement with CS&Co., Schwab Bank has agreed to pay an interest rate to depositors participating
in the Sweep Program that will be determined by reference to an index.
Comprehensive Investment Advisory, Financial Planning, and Consulting Services (Wealth
Management) and/or Family Office Services
Versant also provides comprehensive investment advisory, financial planning, and consulting
services on a fee-only basis in accordance with the traditional fee table described in Item 5A, based
upon the amount of the assets placed under management and the level and scope of the financial
planning and consulting services (see Comprehensive Investment Advisory, Financial Planning, and
Consulting Services). Comprehensive wealth management services include investment advice,
financial planning, estate planning and administration, succession planning, charitable planning, tax
planning, as well as family governance and next-generation education.
In the event a client requires extraordinary planning and/or consultation services (to be determined
in the sole discretion of Versant), Versant 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.
In addition to the wealth management services described above, Versant offers Family Office
services to high-net-worth individuals and their families. The specific services provided are tailored
to the needs and complexities of the client.
Financial Planning and Consulting Services (Stand-Alone)
To the extent requested by a client, Versant may determine 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. Versant’s planning and
consulting fees are negotiable, but generally range from $400 to $800 on an hourly rate basis,
depending upon the level and scope of the service(s) required and the professional(s) rendering the
service(s). Versant may also provide consulting services on a mutually agreed upon fixed-fee basis.
Prior to engaging Versant to provide planning or consulting services, clients are generally required to
enter into a Financial Planning and Consulting Agreement between the parties, 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 Versant commencing
services. If requested by the client, Versant 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 Versant.
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. At all times, the engaged licensed professional(s) (i.e., attorney, accountant, insurance
agent, etc.), and not Versant, shall be responsible for the quality and competency of the services
provided.
It remains the client's responsibility to promptly notify Versant if there is ever any change in their
financial situation or investment objectives for the purpose of reviewing, evaluating or revising
Versant’s previous recommendations and/or services.
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Retirement 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
Versant recommends that a client roll over their retirement plan assets into an account to be managed
by Versant, such a recommendation creates a conflict of interest if Versant will earn new (or increase
its current) compensation as a result of the rollover. If Versant 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), Versant 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 rollover retirement plan assets to an account
managed by Versant.
ERISA PLAN and 401(k) INDIVIDUAL ENGAGEMENTS
Trustee Directed Plans
Versant may be engaged to provide discretionary investment advisory services to ERISA
retirement plans, whereby Versant shall manage Plan assets consistent with the investment
objective designated by the Plan trustees. In such engagements, Versant will serve as an
investment fiduciary as that term is defined under The Employee Retirement Income Security
Act of 1974 (“ERISA”). Versant will generally provide services on an “assets under
management” fee basis per the terms and conditions of an Investment Advisory Agreement
between the Plan and Versant.
Client Retirement Plan Assets
If requested to do so, Versant shall provide investment advisory services relative to 401(k) plan
assets maintained by the client in conjunction with the retirement plan established by the client’s
employer. In such event, Versant shall allocate (or recommend that the client allocate) the
retirement account assets among the investment options available on the 401(k) platform.
Versant’s ability shall be limited to the allocation of the assets among the investment alternatives
available through the plan. Versant will not receive any communications from the plan sponsor
or custodian, and it shall remain the client’s exclusive obligation to notify Versant of any changes
in investment alternatives, restrictions, etc. pertaining to the retirement account. Unless
expressly indicated by Versant to the contrary, in writing, the client’s 401(k) plan assets shall be
included as assets under management for purposes of Versant calculating its advisory fee.
Miscellaneous
Planning and Non-Investment Consulting/Implementation Services
To the extent specifically requested by the client, Versant may provide consulting services regarding
non-investment related matters, such as estate planning, tax planning, insurance, etc. We do not
serve as an attorney, accountant, or insurance agency, and no portion of our services should be
construed as same. Accordingly, we do not prepare estate planning documents, tax returns or sell
insurance products. To the extent requested by a client, we may recommend the services of other
professionals for certain non-investment implementation purpose (i.e., attorneys, accountants,
insurance, etc.). 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 Versant.
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. At all times, the engaged licensed professional(s) (i.e., attorney, accountant, insurance
agent, etc.), and not Versant, shall be responsible for the quality and competency of the services
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provided.
It remains the client’s responsibility to promptly notify Versant if there is ever any change in their
financial situation or investment objectives for the purpose of reviewing, evaluating or revising
Versant’s previous recommendations.
Variable Products
Versant also may render investment advisory services to clients relative to: (1) a variable investment
product that they may own, and/or (2) their individual employer-sponsored retirement plans. In so
doing, Versant either directs or recommends the allocation of client assets among the various mutual
investment alternatives (generally mutually funds) that comprise the variable life/annuity product or
the retirement plan. The client assets shall be maintained at either the specific insurance company
that issued the variable life/annuity product which is owned by the client, or at the custodian designated
by the sponsor of the client’s retirement plan. In the event that Versant is requested to provide advisory
services with respect to a variable investment product and/or retirement plan sponsored by the client’s
employer, Versant’s advice is limited to the investment alternatives provided by the variable product
and/or retirement plan sponsor.
Independent Managers
Versant may allocate (and/or recommend that the client allocate) a portion of the client's investment
assets among unaffiliated independent investment managers in accordance with the client's
designated investment objective(s). In such situations, the Independent Manager(s) shall have day-
to-day responsibility for the active discretionary management of the allocated assets. Versant shall
continue to render investment supervisory services to the client relative to the ongoing monitoring
and review of account performance, asset allocation, and client investment objectives. Factors
which Versant shall consider in recommending Independent Manager[s] include the client's
designated investment objective(s), management style, performance, reputation, financial strength,
reporting, pricing, and research. Please Note: The investment management fee charged by the
Independent Manager[s] is separate from, and in addition to, Versant’s advisory fee as set forth in
Item 5 below.
Non-Discretionary Service Limitations
Clients that determine to engage Versant on a non-discretionary investment advisory basis must be
willing to accept that Versant cannot affect any account transactions without obtaining prior consent
to any such
transaction(s) from the client. Thus, in the event that Versant would like to make a
transaction for a client's account, and the client is unavailable, Versant will be unable to effect the
account transaction (as it would for its discretionary clients) without first obtaining the client’s consent.
Use of Mutual and Exchange Traded Funds
Most mutual funds and exchange traded funds are available directly to the public. Thus, a
prospective client can obtain many of the funds that may be utilized by Versant independent of
engaging Versant as an investment advisor. However, if a prospective client determines to do so,
he/she will not receive Versant’s initial and ongoing investment advisory services.
Use of DFA and Stone Ridge Mutual Funds
Versant utilizes mutual funds and exchange traded funds (ETFs) issued by Dimensional Fund Advisors
(“DFA”), and Stone Ridge Funds (“Stone Ridge”). These funds are generally only available through
certain registered investment advisers. Thus, if the client was to terminate Versant’s services, and not
transition to another adviser who utilizes DFA, Stone Ridge funds, and Elements, restrictions
regarding additional purchases, or reallocation among other, of these funds will generally apply.
Interval Funds/Risks and Limitations: Where appropriate, Versant Capital Management, Inc.
(“Versant”) may utilize interval funds. An interval fund is a non-traditional type of
closed-end mutual
fund that periodically offers to buy back a percentage of outstanding shares from
shareholders.
Investments in an interval fund involve additional risk, including lack of liquidity and restrictions on
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withdrawals. During any time periods outside of the specified repurchase offer window(s), investors
will be unable to sell their shares of the interval fund. There is no assurance that an investor will be
able to tender shares when or in the amount desired. There can also be situations where an interval
fund has a limited amount of capacity to repurchase shares, and may not be able to fulfill all purchase
orders. In addition, the eventual sale price for the interval fund could be less than the interval fund
value on the date that the sale was requested. While an internal fund periodically offers to repurchase
a portion of its securities, there is no guarantee that investors may sell their shares at any given time
or in the desired amount. As interval funds can expose investors to liquidity risk, investors should
consider interval fund shares to be an illiquid investment. Typically, the interval funds are not listed
on any securities exchange and are not publicly traded. Thus, there is no secondary market for the
fund’s shares. Because these types of investments involve certain additional risk, these funds will
only be utilized when consistent with a client’s investment objectives, individual situation, suitability,
tolerance for risk and liquidity needs. Investment should be avoided where an investor has a short-
term investing horizon and/or cannot bear the loss of some, or all, of the investment. There can be
no assurance that an interval fund investment will prove profitable or successful. In light of these
enhanced risks, a client may direct Versant, in writing, not to employ any or all such strategies
for the client’s account.
Unaffiliated Private Investment Funds. Versant does not generally recommend private
investment funds. However, Versant may introduce, on an extremely limited non-discretionary
basis, unaffiliated private investment funds to those clients who express an interest in investing in
such vehicles. The description of the private investment fund (the terms, conditions, risks, conflicts
and fees, including incentive compensation) is set forth in the fund’s offering documents. Versant’s
role relative to unaffiliated private investment funds shall be limited to its initial and ongoing review
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 not be included as part of “assets
under management” for purposes of Versant calculating its investment advisory fee, and shall not
be included on any quarterly portfolio reports. Versant’s clients are under absolutely no obligation
to consider or make an investment in any private investment fund(s).
Please Note: 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 he/she is qualified for investment in the
fund, and acknowledges and accepts the various risk factors that are associated with such
an investment.
Custodian Charges-Additional Fees. As discussed below at Item 12 below, when requested to
recommend a broker-dealer/custodian for client accounts, Versant generally recommends that
Schwab or Pershing
serve as the broker-dealer/custodian for client investment management assets.
Broker-dealers such as
Schwab and Pershing may charge brokerage commissions, transaction,
and/or other type fees for effecting certain types of securities transactions (i.e., including transaction
fees for certain mutual funds, and mark-ups and mark-downs charged for fixed income transactions,
etc.). The types of securities for which transaction fees, commissions, and/or other type fees (as well
as the amount of those fees) shall differ depending upon the broker-dealer/custodian (while certain
custodians, including Schwab and Pershing, generally do not currently charge fees on individual
equity transactions (including ETFs), others do. Please Note: there can be no assurance that the
relevant broker-dealer/custodian will not change their transaction fee pricing in the future. These
fees/charges are in addition to Versant’s investment advisory fee at Item 5 below. Versant does not
receive any portion of these fees/charges. ANY QUESTIONS: Versant’s Chief Compliance Officer,
Elizabeth Shabaker, remains available to address any questions that a client or prospective
client may have regarding the above.
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Portfolio Activity
Versant has a fiduciary duty to provide services consistent with the client’s best interest. As part of
its investment advisory services, Versant 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 Versant determines that changes to a client’s portfolio are neither necessary
nor prudent. Of course, as indicated below, there can be no assurance that investment decisions
made by Versant will be profitable or equal any specific performance level(s).
Plaid: Account Aggregation
Versant, in conjunction with the services provided by Plaid, may also provide 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 Versant (the “Excluded Assets”). The
client and/or their other advisors that maintain trading authority, and not Versant, shall be exclusively
responsible for the investment performance of the Excluded Assets. Unless otherwise specifically
agreed to, in writing, Versant’s service relative to the Excluded Assets is limited to reporting only. The
sole exception to the above shall be if Versant is specifically engaged to monitor and/or allocate the
assets within the client’s 401(k) account maintained away at the custodian directed by the client’s
employer. As such, except with respect to the client’s 401(k) account (if applicable), Versant does not
maintain any trading authority for the Excluded Assets. Rather, the client and/or the client’s designated
other investment professional(s) maintain supervision, monitoring and trading authority for the
Excluded Assets. If Versant is asked to make a recommendation as to any Excluded Assets, the client
is under absolutely no obligation to accept the recommendation, and Versant shall not be responsible
for any implementation error (timing, trading, etc.) relative to the Excluded Assets. In the event the
client desires that Versant provide investment management services for the Excluded Assets, the
client may engage Versant to do so pursuant to the terms and conditions of the Investment Advisory
Agreement between Versant and the client.
Please Note: Cash Positions. Versant continues to treat cash as an asset class. As such, unless
determined to the contrary by Versant, all cash positions (money markets, etc.) shall continue to be
included as part of assets under management for purposes of calculating Versant’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), Versant 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,
Versant’s advisory fee could exceed the interest paid by the client’s money market fund. Versant
earns an additional 0.10% fee in addition to its advisory fee as outlined in Item 5 below for assets
managed through the Cantor Fitzgerald Insured Cash Account Program administered by
StoneCastle Network, LLC. Please note: Versant does not manage cash balances held by the
Client with the Cantor Fitzgerald Insured Cash Account Program. ANY QUESTIONS: Versant’s
Chief Compliance Officer, Elizabeth Shabaker, remains available to address any questions
that a client or prospective may have regarding the above fee billing practice.
Margin Accounts: Risks/Conflict of Interest. Versant Capital Management, Inc. does not
recommend the use of margin for investment purposes. A
margin account is a brokerage
account
that allows investors to borrow money to buy securities and/or for other non-investment borrowing
purposes. The broker/custodian charges the investor interest for the right to borrow money and
uses the securities as collateral. By using borrowed funds, the customer is employing leverage that
will magnify both account gains and losses. Should a client determine to use margin, Versant
Capital Management, Inc. will include the entire market value of the margined assets when
computing its advisory fee. Accordingly, Versant Capital Management, Inc.’ fee shall be based upon
a higher margined account value, resulting in Versant Capital Management, Inc. earning a
correspondingly higher advisory fee. As a result, the potential of conflict of interest arises since
Versant Capital Management, Inc. may have an economic disincentive to recommend that the client
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terminate the use of margin. Please Note: The use of margin can cause significant adverse
financial consequences in the event of a market correction. ANY QUESTIONS: Our Chief
Compliance Officer, Elizabeth Shabaker, remains available to address any questions that a
client or prospective client may have regarding the use of margin.
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, Versant 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 his/her/its responsibility to promptly notify
Versant if there is ever any change in his/her/its financial situation or investment objectives for the
purpose of reviewing, evaluating or revising Versant’s previous recommendations and/or services.
Disclosure Brochure. A copy of Versant’s written Brochure as set forth on Form ADV Part 2A and
Form CRS shall be provided to each client prior to, or contemporaneously with, the execution of an
Agreement between Versant and the client (i.e., Investment Advisory Service Agreement and/or
Comprehensive Investment Advisory Services with Financial Planning Agreement).
Section C - TAILORED ADVISORY SERVICES
Versant 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, Versant 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 Versant’s services.
Section D - WRAP FEE PROGRAMS
Versant does not participate in a wrap fee program.
Section E - ASSETS UNDER MANAGEMENT
As of December 31, 2023, Versant had a total of $900,479,528 in assets under management. Of
this amount, $836,076,215 is managed on a discretionary basis and $64,403,313 is managed on a
non-discretionary basis.
Section A - COMPENSATION
The client can determine whether to engage Versant to provide the following types of advisory