We are Strategic Options, LLC (“Strategic Options”), an online investment adviser registered with the Securities and Exchange Commission. Investment advisory and brokerage services and fees differ, and it is important for you to understand the differences.
Free and simple tools are available to research firms and financial professionals at Investor.gov/CRS, which also provides educational materials about broker-dealers, investment advisers, and investing. Our firm and financial professionals’ registration information are also publicly available on the Investor.gov website.
RELATIONSHIPS & SERVICES
Q: What investment services and advice can you provide me?
A: We offer customized investment management to retail investors. Our services are generally provided on a discretionary basis, which means that we have the power to buy and sell securities for your account without your prior consent. This authority is usually unlimited and remains in effect until you revoke it. We do not provide non-discretionary investment advice, as the is just a waste of our time. We review portfolios on a weekly basis.
We do not require a minimum account size or fee.
Q: Given my financial situation, should I choose an investment advisory service? Why or why not?
A: Some people prefer to make their own investment decisions and may therefore choose to use a broker-dealer that offers securities recommendations that the investor may evaluate on their own. If the latter is the case, there are plenty of other clowns that provide that service. Such investors can avoid management fees and pay only brokerage fees when they make transactions. In contrast, the person (Chad Humphrey) at our firm has many years of investment experience and substantial academic qualifications, military experience, combat experience, and most important years of building financial algorithms to evaluate investment choices for you on a minute-by-minute basis. The advantage of utilizing our experience is that we can help you manage your investment risk.
Q: How will you choose investments to recommend to me?
A: We recommend investments based upon our years of experience building algorithms. We do not take into your individual circumstances, financial situation, an expectation of current and future cash needs, investment objective, and risk tolerance. Although we find that traditional algorithmic trading is a risk, we find it not to be the case. Since our focus is on aggressive growth, we offer only a portfolio for clients and it is considered aggressive and for high-risk tolerance.
Q: What is your relevant experience, including your licenses, education, and other qualifications?
A: Strategic Options has been in the financial services industry for several years and maintains the coveted Series 65 exam qualification or a professional designation accepted by the applicable state regulator. You can find information on any professional designations of your financial advisor in the Form ADV Part 2B (“Brochure Supplement”) we provide you at the onset of the advisory relationship.
Q: What do these qualifications mean?
A: These qualifications assure that our professionals have met specific regulatory exam requirements required to conduct investment activities (e.g., Series 65). Let’s not forget that Bernie Madoff had series 65 licenses as well.
FEES, COSTS, CONFLICTS & STANDARD OF CONDUCT
Q: What fees will I pay?
A: Our quarterly fees are calculated as a percentage of the assets under our management, so our fees will rise and fall with the value of the assets we manage for you. As a result, we are economically incented to recommend that you place more assets in your account to increase the value of your portfolio, because as the value increases, so do our fees.
In addition to our fees, you will be charged transaction or asset-based fees by your custodian for its services. These fees vary depending on the custodian. Under a transaction fee arrangement, the more transactions effected in your account, the more fees you will pay, and high activity in your account does not assure positive portfolio performance. For custodians that charge their fees based upon a percentage of your assets, such fees may be more than would be the case if you are charged a transaction-based fee. Please be mindful of the effect of your portfolio size, the level of activity, and the rate of custodian asset-based pricing. Generally, large portfolios would be disadvantaged by paying an asset-based custodian fee versus a transaction-based fee. In addition to advisory and transaction fees, there are additional fees such as postage and handling, transfer taxes, SEC fees for sales of securities, and similar fees. These additional fees are not material, but like advisory fees and custodian fees, they do have an adverse impact on the value of your portfolio over time. You can find more information about our fees and costs under Item 5 of our Disclosure Brochure, available at Investor.gov/CRS.
Q: Help me understand how these fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?
A: We charge asset-based fees, so our fees are calculated as a percentage of the value of your portfolio we manage. For example, a $10,000 investment at a 1% annual fee results in an annual deduction of $100 from your portfolio (meaning only $9,900 ends up invested). This means that it will take longer for you to realize positive returns than if no fees were charged. In this example, if you generated a 3% return, your net return would be 2%. Assuming nothing changes, it could take 18 months to realize a $300 return on your $10,000 investment.
You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying.
Q: What are your legal obligations to me when acting as my investment adviser? How else does your firm make money and what conflicts of interest do you have?
A: When we act as your investment adviser, we have to act in your best interest and not put our interests ahead of yours.
Q: How might your conflicts of interest affect me, and how will you address them?
A: Currently Strategic Options does not have any other conflict of interest. All conflicts if they exist are documented on the ADV Part 2A.
Q: How do your financial professionals make money?
A: Strategic Options makes money by collecting a quarter fee for Asset Under Management. We are incentivized to continue to enhance our investment strategy.
Q: Do you or your financial professionals have any legal or disciplinary history?
A: No. You can visit Investor.gov/CRS for a free and simple search tool to research our firm and our financial professionals.
Q: Who is my primary contact person?
A: You can contact Strategic Options, LLC at any time at [email protected]
Q: Is he or she a representative of an investment adviser or a broker-dealer?
A: Yes, series 65