Part 2A of Form ADV: Firm Brochure Rock Steady Wealth, Inc. CRD No Firm Brochure

Transcription

1 Item 1 Cover Page Firm Brochure CRD No ROCK STEADY WEALTH, INC Cherokee Rd. Richmond, VA (804) alex@rocksteadywealth.com June 11, 2015 This brochure provides information about the qualifications and business practices of Rock Steady Wealth, Inc. If you have any questions about the contents of this brochure, please contact us at or alex@rocksteadywealth.com. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority. Rock Steady Wealth, Inc. is a Registered Investment Advisor (RIA). Registration does not imply a certain level of skill or training. 1

2 Item 2 Material Changes This is the initial filing of Form ADV Part 2A for Rock Steady Wealth, Inc. ( Rock Steady Wealth or the Firm ). Form ADV Part 2A is also known as the brochure, and contains information about the Firm and its operations. This brochure is required to be updated annually. In future versions of this brochure, any material changes to the Firm or its business will be summarized in this section. 2

3 Item 3 Table of Contents Item 1 Cover Page... 1 Item 2 Material Changes... 2 Item 3 Table of Contents... 3 Item 4 Advisory Business... 4 Item 4 Advisory Business (cont.)... 5 Item 4 Advisory Business (cont.)... 6 Item 5 Fees and Compensation... 6 Item 5 Fees and Compensation (cont.)... 7 Item 6 Performance Based Fees and Side-by-Side Management... 7 Item 7 Types of Clients... 8 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss... 8 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss (cont.)... 9 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss (cont.) Item 8 Methods of Analysis, Investment Strategies and Risk of Loss (cont.) Item 9 Disciplinary Information Item 10 Other Financial Industry Activities and Affiliations Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Item 12 Brokerage Practices Item 12 Brokerage Practices (cont.) Item 13 Review of Accounts Item 14 Client Referrals and Other Compensation Item 15 Custody Item 16 Investment Discretion Item 17 Voting Client Securities Item 18 Financial Information Item 19 Requirements for State-Registered Advisers

4 Item 4 Advisory Business Rock Steady Wealth was founded by the principal owner, Alexander Casas, in October of 2014 in Richmond, Virginia and has been registered as an investment advisor in Virginia since Rock Steady Concierge Service Rock Steady Wealth offers fee-based investment advisory services based on a percentage of Assets Under Management (AUM). This service, Rock Steady Concierge Service (RSCS), is the primary advisory service offered. RSCS includes the following: 1. Risk Assessment and Client Intake Getting to know the client, gathering necessary information and documents, and determining the risk a client is willing to accept when investing. 2. Analysis of current portfolio(s) A client portfolio is analyzed using fundamental, technical, qualitative, and quantitative methods. 3. Design of new portfolio(s) A new portfolio is created and tailored to the client using information collected from client communications, risk assessment, investment policy statement, and fundamental technical qualitative and quantitative analysis methods. 4. Change of custodians to TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC Moving accounts from the client s prior custodian to TD Ameritrade Institutional. 5. Rock Steady Monitor Monitoring securities held in client accounts. Client held securities are put on alert through portfolio management software for major changes, including but not limited to earnings or revenue changes, analyst ratings changes, and change in management. Sovereign events are also monitored and may cause a review of certain securities, if the security in question does business in said country. 6. Rock Steady Anytime Communicate anytime and receive advice, recommendations, research, and more via , phone, or text with a 24 hour response time. 7. Rock Steady Re-balance Re-balance a portfolio to match the clients risk tolerance and needs, either by directly trading in discretionary accounts at TD Ameritrade Institutional, or by providing the information necessary for the client to effect the change at the clients chosen custodian. 8. Rock Steady Quarterly Quarterly review of the clients ever changing needs and goals, summary of the portfolio(s), and form and/or review long term and short term strategy. Rock Steady A La Carte Services The firm also offers Rock Steady A La Carte services billed at a flat rate, including the following: 1. Risk Assessment and Client Intake Getting to know the client, gathering necessary information and documents, and determine the risk a client is willing to accept when investing. 4

5 Item 4 Advisory Business (cont.) 2. Analysis of current portfolios A client portfolio is analyzed using fundamental, technical, qualitative, and quantitative methods. 3. Design of new portfolio(s) A new portfolio is created and tailored to the client using information collected from client communications, risk assessment, investment policy statement, and fundamental technical qualitative and quantitative analysis methods. 4. Effecting custodian changes Assisting a client in moving accounts between custodians. For example, transferring an account from one brokerage firm to another, or a rollover of a 401(k) to an IRA. 5. Rock Steady Monitor Monitoring securities held in client accounts. Client held securities are put on alert through portfolio management software for major changes, including but not limited to earnings or revenue changes, analyst ratings changes, and change in management. Sovereign events are also monitored and may cause a review of certain securities, if the security in question does business in said country. 6. Rock Steady Anytime Communicate anytime and receive advice, recommendations, research, and general help via e- mail, phone, or text with a 24 hour response time. 7. Rock Steady Rebalance Re-balance a portfolio to match the clients risk tolerance and needs, either by directly trading in discretionary accounts at TD Ameritrade Institutional, or by providing the information necessary for the client to effect the change at the clients chosen custodian. 8. Rock Steady Hour Hour long meeting at a location the client chooses. Rock Steady Hourly Consulting Services Hourly consulting for individuals, businesses, pensions, and charities is also available. Pension consulting includes assisting plan administrators and/or employers in developing an Investment Policy Statement (IPS), presenting and explaining the investment choices and their risks to plan participants and sponsors, assisting in choosing diversified plan assets, comparing and explaining investment/plan expenses, and plan design and implementation services. Rock Steady Wealth provides the above mentioned services for the following types of investments: Stocks, Bonds, Mutual Funds, Exchange Traded Funds, Certificates of Deposit, Buying Call and/or Put Options, TIPS, Treasuries, Cash Equivalents, REITS, Master Limited Partnerships, Unit Investment Trusts, and alternative investments. Rock Steady Wealth tailors advisory services to the individual needs of the client by requiring each client to complete a proprietary risk assessment, client intake form, and engage in a conversation regarding the current and future needs of the client before any agreement is signed. The conversation may include financial and life goals, current financial status, employment status and goals, investment time frame, experience in investments, and client expectations. 5

6 Item 4 Advisory Business (cont.) These discussions and forms assist Rock Steady Wealth in determining the needs and wants of each client individually. The client may impose restrictions on investing in certain securities or types of securities. As of December 31, 2014, Rock Steady Wealth managed $0 (zero) and 0 (zero) accounts. All assets will be managed on a discretionary basis. Rock Steady Wealth does not participate in wrap fee programs. Item 5 Fees and Compensation Rock Steady Wealth has a fee-based program referred to as Rock Steady Concierge Service with an annual fee range of between 0.5% %. This Assets Under Management (AUM) rate is determined by negotiation between client and adviser with a $2, minimum annual fee. This includes risk assessment, calling anytime, quarterly meetings, quarterly re-balance, portfolio analysis, portfolio design, and change of custodians to TD Ameritrade Institutional. Under this program, the fee is calculated by applying an agreed upon fee rate to Assets Under Management (AUM) as of a specific date (usually the End of Month (EOM) or End of Quarter (EOQ). Fees range from.5% to 2% and are determined at the time of initial consultation with the client. Fees are based upon the Average Daily Balance (ADB) or market value of total AUM as well as the complexity of the clients preferred investment strategy. Fees are negotiable and the Firm may waive the minimum fee at its discretion and without notice. Fees calculated on AUM are billed and collected in advance. RSCS Examples of fee costs: Your fee would be: If your account value is: And your rate is: Annually Quarterly Monthly $125, % $2, $ $208 $200, % $3, $ $250 $350, % $3, $ $292 $500, % $2, $ $208 Rock Steady Concierge Service fees may be paid by most methods including the option to deduct the fee from the client s accounts or bill client s for fees, payable by cash, check, or charge. Fees may be billed monthly, quarterly, or annually and will be negotiated at the time the contract is signed. 6

7 Item 5 Fees and Compensation (cont.) Rock Steady Wealth also offers Rock Steady A La Carte services that are billed as outlined below. A La Carte Services: Rate Type Risk Assessment and Client Intake Information: Required Free Free Analysis of Current Portfolio $ Flat fee Design of New Portfolio $ Flat fee To effect a custody change such as a Rollover of IRA, 401k, or transfer $ Flat fee of account to TD Ameritrade Institutional Rock Steady Monitor Portfolio Monitoring Service $ Annual Flat fee Rock Steady Anytime Advice, Recommendations, Research Anytime via $ Annual Flat fee , phone, or text (24 hour response time) Rock Steady Rebalance Rebalance Portfolio to your risk tolerance $ Flat fee Rock Steady Hour Hour long meeting location of your choice (office/home/golf/lunch/etc.) $ Hourly Rock Steady Wealth s A la Carte Services are billed at the above listed rates. Fees are billed in advance and may be paid monthly, quarterly, or semi-annually and annually up to $1, These services may be billed directly from accounts, or by cash, check, or credit card. Rock Steady Wealth s A la Carte Services fees are negotiable. Besides advisory fees, clients may pay additional fees to the custodian for its services, including but not limited to trade fees, wire fees, transfer fees, and short term redemption fees, deferred sales charges, 12-bl fees to mutual fund companies, and taxes on capital gains dividends and interest. A client may cancel their agreement with Rock Steady Wealth anytime however the client must notify the company in writing. If a client has paid up front for services, they are entitled to a refund of services not completed, less $100. The amount of refund is to be determined by time spent on service before cancellation. Refund requests must be completed in writing within fifteen (15) business days of their cancellation. Rock Steady Wealth and any supervised person do not accept compensation for the sale or purchase of securities or other investment products. Item 6 Performance Based Fees and Side-by-Side Management Rock Steady Wealth does not use performance-based fees, and does not engage in side-by-side management. 7

8 Item 7 Types of Clients Rock Steady Wealth provides investment advice to individuals, trusts, businesses, estates, charitable organizations, and pension and profit sharing plans. Item 8 Methods of Analysis, Investment Strategies and Risk of Loss Rock Steady Wealth manages portfolios using a multitude of methods of analysis and investment strategies as outlined below: Fundamental Analysis involves finding an investment s intrinsic value based on economic, financial, and other qualitative or quantitative factors. Looking at general economic conditions, industry specific conditions, and company specific conditions helps to determine a value which can then determine whether a security is underpriced or overpriced. There is risk that the determination of overpriced or underpriced is based on the qualitative judgement of the analyst. Technical Analysis is the evaluation of statistics generated by market data such as historical prices and volume. This is not a means to measure intrinsic value, the price an investor is willing to pay for an investment, but to use charts and other statistical tools to identify patterns in the investment s trading history. Technical analysis is used to increase the probability of making money in an investment, however, predictions made using technical analysis will not necessarily come true due to the limited data used. Qualitative Analysis is the measure of the qualities of a company using investor s judgement on information such as the perceived expertise of a company s executives, the strengths of research and development, industry cycles, or even the happiness of employees. The risk of qualitative analysis is the inability to determine the precise effect a qualitative measure may have on a given investment. Quantitative Analysis is the use of mathematical and statistical formulas to help determine the probability of an investment s returns and/or risks. Quantitative analysis has risks in that an unquantifiable variable may effect an investment when that variable was not taken into account when creating the formula. Sovereign Analysis is the research of a countries government, conflicts, regulations, and legislation in order to reduce the Country Risk. Country Risk is the risk of holding securities based in a foreign country. Other methods of research include publicly available corporate information, subscription based research providers, and broker provided research analyst reports. Although these methods are intended to help minimize risk, investment in securities involves risk of loss that clients should be prepared to bear. The primary investment strategy used by Rock Steady Wealth is a form of Modern Portfolio Theory (MPT). Modern portfolio theory is the theory of building a portfolio to maximize the expected return 8

9 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss (cont.) based on a quantifiable level of risk, which emphasizes that higher risk is a part of higher returns. MPT has the risk of deviating from its theory and affecting returns when markets do not behave in an efficient manner. Asset Allocation is an investment strategy used to balance risk and reward by placing a portion of a portfolio in one of three main asset classes: equities, fixed-income, and cash. Using different percentages of each asset class will change the levels of risk and return for a given portfolio as long as those asset classes maintain negative correlation. The primary risk of an asset allocation portfolio is the possibility of the asset classes becoming positively correlated when prices are dropping. Behavioral Finance, the use of psychology based theories to explain and predict a market which contradicts an efficient and rational market, is also used as an investment strategy by Rock Steady Wealth. The risk of using behavioral finance is an investment which acts in an efficient and rational manner where psychology based theories are not applicable to investing. Index investing is used to help increase diversification of a portfolio and to lower expenses when investing. Index investing is a passive investment style which uses index funds to replicate the performance of a specific equity or fixed-income index. Index investing has the risk of deviating from its index and the possibility of losses to algorithmic trading due to the index fund s predictable rebalancing schedule. Buy and Hold is a passive investment style in which an investor buys an investment and regardless of fluctuations in the market holds the investment for a long period of time. This may help reduce the expenses of trading costs and taxation. The inherent risk of buy and hold is the possibility that an investment may go down in value regardless of the time held eventually becoming worthless. Active Trading is the buying and selling of investments within a short timeframe ranging from within a day to within a year to take advantage of short-term movements in price. Active trading is considered speculative in nature and is associated with high trade fees and large swings in pricing. Rock Steady Wealth uses a combination of all or some of the above mentioned methods, research, and analysis to provide investment advice. The use of these tools is determined by a combination of discussions with the client, information and documents provided by the client, and a risk assessment questionnaire which guides the creation of an investment policy statement tailored to the client s appropriate risk tolerance, risk capacity, and investment constraints. All investment strategies or methods of analysis involve some material risks. More frequent trading of securities, can affect investment performance, particularly through increased brokerage and other transaction costs and taxes. The primary investments used by Rock Steady Wealth are Stocks, Bonds, Mutual Funds, Exchange Traded Funds, Certificates of Deposit, Buying Call and/or Put Options, TIPS, Treasuries, Cash Equivalents, REITS, Master Limited Partnerships, Unit Investment Trusts, and alternative investments. All of the securities listed above have risk. Although Rock Steady Wealth provides risk management, the loss of principal is still a risk, and principal values may fluctuate daily. Risks associated with the above listed securities are outlined below: 9

10 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss (cont.) Liquidity risk is the inability to buy or sell an investment in a timely manner to prevent or minimize a loss. Systematic risk is the risk to the entire market or market segment which is undiversifiable and unable to be predicted. Interest Rate Risk is the possibility that an investment may change in value due to a change in interest rates. Currency Risk occurs when there is a change in the price of one currency compared to another and an investment is located across national borders. Inflation Risk is when an investments future value is lower due to a change in the purchasing power of your home currency over time. Regulatory Risk is a change in regulations or laws which will negatively affect an investment. Political Risk occurs when political changes or instability affect the value and the liquidity of an investment. Unsystematic Risk is a risk which affects an individual investment and does not affect the entire market. Reinvestment Risk occurs when future interest payments from a bond will not be reinvested at the interest rate when the bond was initially purchased. For active trading accounts, buying call and/or put stock or ETF options is recommended. Rock Steady Wealth does not write options, exercise options, invest in index options, debt options, commodities options, flexibly structured options, or foreign currency options. Option trading is speculative in nature and may carry substantial risk of loss. Only invest in options using risk capital. Options involve risks that are not suitable for everyone. These risks are outlined below: 1. An option holder runs the risk of losing the entire amount paid for the option in a relatively short period of time. 2. The more an option is out of the money and the shorter the remaining time to expiration, the greater the risk that an option holder will lose all or part of his investment in the option. 3. Prior to the period when a European-style option or capped option is exercisable, the only means through which the holder can realize value from the option (unless the capped option is automatically exercised) is to sell it at its then market price in an available secondary market. 4. The exercise provisions of an option may create certain risks for the option holder. 5. The courts, the SEC, another regulatory agency, OCC or the options markets may impose exercise restrictions. 6. If a trading market in particular options were to become unavailable, investors in those options could no longer engage in closing transactions. Moreover, even if the market were to remain available, there may be times when options prices will not maintain their 10

11 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss (cont.) customary or anticipated relationships to the prices of the underlying interests and related interests. 7. Disruptions in the markets for underlying interests could result in losses for options investors. 8. Holders and writers of a capped option bear the risk that an automatic exercise value will be reported erroneously by the official reporting source. 9. The insolvency of a brokerage firm could present risks for that firm s customers, whether they are investors in options or other securities. 10. Special risks are presented by internationally-traded options. 11. There is a risk that the OCC and its backup system will fail. Item 9 Disciplinary Information Rock Steady Wealth has had no disciplinary events. Item 10 Other Financial Industry Activities and Affiliations Pending Applications Rock Steady Wealth and its management persons have no applications pending to register as a brokerdealer or as a registered representative of a broker-dealer, a futures commission merchant, commodity pool operator, a commodity trading advisor, or an associated person of the foregoing entities. Related Persons Rock Steady Wealth has NO related persons that could create a conflict of interest with clients for the following: 1. Broker-dealer, municipal securities dealer, or government securities dealer or broker 2. Investment company or other pooled investment vehicle (including a mutual fund, closed-end investment company, unit investment trust, private investment company or hedge fund, and offshore fund) 3. Other investment adviser or financial planner 4. Futures commission merchant, commodity pool operator, or commodity trading advisor 5. Banking or thrift institution 6. Accountant or accounting firm 7. Lawyer or law firm 8. Insurance company or agency 9. Pension consultant 10. Real estate broker or dealer 11. Sponsor or syndicator of limited partnerships Material Conflicts Rock Steady Wealth does not receive compensation directly or indirectly from any investment advisers. 11

12 Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Code of Ethics All current and future employees and principals of the firm must: 1. Engage in honest and ethical behavior, including but not limited to, the handling of apparent conflicts of interest with anyone we serve. 2. Protect the confidentiality of private data obtained for our clients, and prevent disclosure of said information unless required by law, regulator, or with client written permission. 3. Present precise information regarding the services offered to clients and prospective clients. 4. Comply with all laws, rules, and regulations related to our business. 5. Avoid the use of insider information when trading for either client or oneself. 6. Do not trade firm or personal securities ahead of client securities, also known as front running. 7. Act as a fiduciary, putting the client s interest above one s own, and never misrepresent accounts, procedures, methods, recommendations, and risks. 8. All personas with access to client trading information are required to provide a copy of personal monthly brokerage statements showing trade activity to the firm s principal. 9. Any and all breaches of the Code of Ethics should be reported to the firm s principal. 10. All employees, related persons, clients, and prospective clients will be presented with a copy of this Code of Ethics. Rock Steady Wealth and related persons do not recommend to clients, nor buy or sell for clients any securities in which the firm or any related person has a material interest. Rock Steady Wealth and related persons of the firm may invest in securities that the firm or a related person may recommend to clients. The same standards and models are used to evaluate a security for the firm and related persons as are used for the client. Rock Steady Wealth and related persons of the firm will not show bias in trading methods. If trading is needed for a client in general for a specific security that the firm, related persons, and clients simultaneously hold, client trades will be executed either ahead of or at the same time as trades for the firm and related persons. Item 12 Brokerage Practices Rock Steady Wealth has chosen to use TD Ameritrade Institutional as the primary custodian to hold all Client accounts and execute trades in said accounts. Rock Steady Wealth believes TD Ameritrade s custodian costs, trading costs, and trade execution is both efficient and fair. Not all advisers require clients to use a specific broker-dealer. Use of a Rock Steady Wealth s chosen broker-dealer may result in the client paying more money. These costs may include higher transactions costs, custodian costs, less favorable execution of trades, and higher commissions. Rock Steady Wealth does routinely recommend, request or require that a client direct transactions through a specific broker-dealer. Not all advisers require clients to direct brokerage, and client directed brokerage may be unable to achieve the most favorable execution of client transactions, negotiate commissions, limit the clients ability to participate in aggregated trades, and that this practice may cost 12

13 Item 12 Brokerage Practices (cont.) clients more money. Rock Steady Wealth does permit a client to direct brokerage. When a client requests directed brokerage Rock Steady Wealth creates a report which includes the name of the client, the name of the broker-dealer, the current amount of client commissions directed to the broker-dealer, the client s requested percentage to be directed to the broker-dealer, the actual percentage of the client s total commissions directed to the broker-dealer, and any deviate from the requested amount. Client directed brokerage may be unable to achieve the most favorable execution of client transactions, negotiate commissions, limit the clients ability to participate in aggregated trades, and that this practice may cost clients more money. When the Firm, in its sole discretion, believes it to be most advantageous to the client, block trading is employed to achieve best execution of trades. When aggregating the purchase or sale of securities for various client accounts the firm prepares an Allocation Statement before entering the aggregate order which specifies the client accounts and how it intends to allocate the order among those clients. If the order is filled in its entirety it will be allocated among clients in accordance with the Allocation Statement. If the aggregate order is partially filled it will be allocated pro rata based on the Allocation Statement. Notwithstanding the foregoing, the order may be allocated on a basis different from that specified in the Allocation Statement if all client accounts receive fair and equitable treatment and the reason for the different allocation is explained in writing and is approved in writing by the advisory firm s chief compliance officer no later than one hour after the opening of the markets on the trading day following the day the order was executed. The investment adviser s books and records separately reflect, for each client account, the orders which are aggregated, and the securities which are held, bought or sold. Funds and securities of clients whose orders are aggregated will be deposited with one or more banks or brokerdealers, and neither the clients cash nor their securities will be held, collectively, any longer than is necessary to settle the purchase or sale in question on a delivery versus payment basis. Cash or securities held, collectively, for clients will be delivered out to the custodian bank or broker-dealer as soon as practicable following the settlement. The investment adviser will receive no additional compensation or remuneration of any kind as a result of the proposed aggregation. Individual investment advice and treatment will be accorded to each advisory client. When a client s investment objectives may not be able to be addressed due to the use of aggregate orders, even though the opportunity to do so exists, aggregate trading will not occur. This may cause the client to have higher costs in the form of higher or lower execution price than is desired. The firm does not receive any compensation for the use of this custodian, but TD Ameritrade does provide certain trading, portfolio reporting and analysis, market commentary, and research services which the Firm uses to the benefit of its clients. 13

14 Item 13 Review of Accounts Rock Steady Wealth s principal and CEO, Alexander Casas, continually reviews and monitors client assets. Client accounts are reviewed on a quarterly basis by Alexander Casas, meeting with concierge clients quarterly as the clients schedule permits. A major change in a client s life, such as divorce, change of employer, death in the family, or just a client request will trigger a review of the client portfolio objectives, expectations, changes, needs, and goals outside of the periodic review. Rock Steady Wealth also monitors securities held in client accounts for clients whom have signed up for the portfolio monitoring service or concierge service. Client held securities are put on alert through Morningstar Office for major changes, including but not limited to earnings or revenue changes, analyst ratings changes, and change in management. Sovereign events are also monitored and may cause a review of certain securities if the security in question does business in said country. Major market or economic events may also trigger a review of a client s accounts. Any of the above listed factors may trigger a review beyond the typical quarterly review or client requested review for clients that hold effected securities. Clients will be notified at a minimum of the change of securities via trade confirmation from the custodian after the trade has been completed. Rock Steady Wealth provides clients with quarterly summary statements listing current and historical portfolio values, fees paid, deposits, withdrawals, and asset allocation mix. TD Ameritrade also provides detailed statements monthly and/or quarterly for each client account including holdings, trades, fees, interest, distributions, withdrawals, and valuation. TD Ameritrade also provides end-ofyear tax reporting information. Item 14 Client Referrals and Other Compensation Rock Steady Wealth does not compensate any other party for client referrals, and does not have any solicitation arrangements. 14

15 Item 15 Custody Rock Steady Wealth does not retain custody of clients funds or securities, except to the extent of requesting and receiving payment of advisory fees from client accounts (see Item 5), and this is limited to what has been authorized by the client. All clients will receive an invoice showing the calculations of fees charged. All funds and securities are held with a qualified custodian outside of the firm. The qualified custodian sends monthly account statements directly to the client. The client is in control of how these statements and other important documents from the custodian are sent to the client. Choices are via mail or electronic delivery. Clients should compare the custodian statements to any documents and reports provided by Rock Steady Wealth. Item 16 Investment Discretion Rock Steady Wealth manages investment accounts on a discretionary basis. This means the firm may determine the securities to buy or sell in client accounts, the amount of securities to be bought or sold, the broker or dealer to be used for a purchase or sale of securities, and the commission rates to be paid to a broker or dealer for a client s securities transactions. For all discretionary accounts and prior to any activity within these client accounts, Rock Steady Wealth will review, discuss, and execute a contract laying out the terms of the agreement between the firm and the client. This contract will include authorization to allow the firm to have discretionary authority. This authority gives Rock Steady Wealth permission to make decisions about the account according to client preferences and risk tolerances, and only in the best interest of the client. The client may place certain restrictions on discretionary authority. These restrictions may include owning securities which are country specific, industry specific, based on religious or client specified ethical guidelines. In order to put discretionary restrictions in place, a client must provide a written request of the required restrictions. Absent this written request, there are no limitations on Rock Steady Wealth s discretionary authority other than those set in Rock Steady Wealth s contractual agreement with clients. 15

16 Item 17 Voting Client Securities Rock Steady Wealth does not vote client securities. Clients are responsible for receiving and voting proxies for securities within their portfolio. Item 18 Financial Information Rock Steady Wealth does not require or solicit prepayment of more than $1,200 in fees per client, six months or more in advance. The firm does not have any financial condition that is reasonably likely to impair its ability to meet contractual commitments to clients. Item 19 Requirements for State-Registered Advisers Alexander Casas has not been involved in any arbitration claims, self-regulatory organization or administrative proceedings, or bankruptcy petitions. 16