Compliance and Supervisory Procedures Manual RIA Edition

1 Compliance and Supervisory Procedures Manual RIA Edition Revision Date: August 21, 2017. Procedures may be updated, revised or clarified through the publication of IA Compliance Communications ( IA CC ), which are available at Identifier Title Publication Date IA CC 14-01 form ADV Part 2A Disclosure brochure Updates 9/25/2014. IA CC 15-01 The Strategic Choice Account Program 2/10/2015. IA CC 15-02 Solicitor's Arrangements 4/6/2015. IA CC 15-03 Strategic Choice Program Accounts: Request for 4/27/2015. Information IA CC 15-04 Updated ADV Part 2A Appendix 1 Strategic Choice 7/1/2015.

2 Program brochure IA CC 15-05 Financial Planning and Consulting Services 8/24/2015. IA CC 15-06 Strategic Choice Program: Discretionary Authority 8/24/2015. IA CC 16-01 form ADV and Strategic Choice Account Updates 3/31/2016. IA CC 16-02 Use of Alternative Investments in Managed Accounts 3/31/2016. IA CC 16-03 Use of Alternative Investments in Managed Accounts 8/29/2016. Revisited IA CC 16-04 New Financial Planning Client Information form 8/30/2016. Replaces Full Client Account form IA CC 16-05 Mutual Fund Share Classes in Managed Accounts 11/20/2016.

3 IA CC 17-01 form ADV and Strategic Choice Account Updates 4/9/2017. IA CC 17-02 Authorization for Deducting Consulting and Financial 4/12/2017. Planning Fees from Client Accounts IA CC 17-03 The Strategic Choice Agreement Exhibit B - Additional 7/10/2017. Services IA CC 17-04 Annual Review form 7/10/2017. IA CC 17-05 C-Share Mutual Fund Program 7/10/2017. Table of Contents Page #. Introduction .. 5. SFA's Compliance with the Investment Advisers Act of 1940 .. 6. Responsibilities and Qualifications of SFA's Chief Compliance Officer .. 7.

4 Chapter 1 Filings and Reports Registration of SFA with the 8. Chapter 2 form ADV/ brochure Disclosure and Delivery SFA's Written Disclosure Statement .. 8. Delivery of form ADV .. 9. Amendments to form ADV Rule 204-1 .. 9. Disciplinary and Custody Related Disclosures .. 9. Chapter 3 Client Agreements/Contracts Section 205. General .. 10. Privacy of Client Financial Information (Regulation S-P) .. 10. Delivery of SFA's Privacy 10. Arbitration Clauses in Advisory Agreements .. 10. Chapter 4 Custody of Client Funds and Securities Amended Rule 206(4)-2.

5 Amended Rule 206(4)-2 .. 11. Direct Client Billing vs. Billing the Account Custodian/. Broker for Advisory Fees .. 12. Delivery of Account Statements to Clients .. 12. Amendments to form ADV .. 13. SFA's Compliance with Amended Rule 206(4)-2 .. 13. Chapter 5 Books and Records Rule 204-2. Responsibility for Preparation and Maintenance .. 13. Accounting and Financial 14. Accrual 14. Record Preservation .. 14. Specific Books and Records to be Prepared and Maintained .. 14. Cash Receipts and Disbursement Journal Rule 204-2(a)(1).. 14. General Ledger Rule 204(a)(2).

6 14. Order Tickets/Memoranda Rule 20492(a)(3) .. 14. Bank Statements and Cash Reconciliation-Rule 204-2(a)(4) .. 15. Bills and Statements Rule 204-2(a)(5) .. 15. Trial Balance and Related Financial Records-Rule 204-2(a)(6) .. 15. RIA Compliance Procedures 2 Rev. 08212017. Superseded by Section 12. Communications with the Public Rev. 09142013 ..15. Discretionary Client Record Rule 204-2(a)(8) and Discretionary Powers Record Rule 204-2(a)(9) .. 16. Written Agreement Record Rule 204-2(a)(10).. 18. Advertising Records Rule 204-2(a)(11) .. 18.

7 Securities Transaction Reports Rule 204-2(a)(12) .. 20. Disclosure Document Part II of form ADV Rule 204-2(a)(14).. 21. Acknowledgement of Receipt of Documents from Solicitors Rule 204-2(a)(15).. 21. Documents Supporting Performance Results Rule 204-2(a)(16) .. 21. Securities Record by Client Rule 204-2(c)(1) .. 21. Securities Record by Security Rule 204-2(c)(2) .. 21. Filings Required under Rule 13f-1 of the Securities Exchange Act of 1934 .. 21. Chapter 6 Financial and Disciplinary Information-Rule 206(4)-4. Financial Disclosure .. 21.

8 Disciplinary Disclosure .. 22. Chapter 7 Internal Controls General .. 22. Characteristics of an Effective Compliance System .. 22. Written Policies and Procedures (Internal Control) . New Rule 206(4)-7 .. 23. Chapter 8 Services Offered by SFA. Advisory Services .. 24. Investment Supervisory Services .. 24. Management Services .. 25. Chapter 9 Investment Management Setting up the Client's 25. Determining Suitability .. 25. Managing the Client's Account .. 26. Monitoring Account Activity .. 27. Termination of Accounts .. 27. Chapter 10 Prohibited Transactions Agency and Principal Cross Transactions.

9 27. Front Running .. 27. Conducting Business in States where not 27. Diverted Opportunity 28. Holding Client Funds or Securities .. 28. 99. RIA Compliance Procedures 3 Rev. 08212017. Chapter 11 Limited Partnerships .. 28. Chapter 12 Conflicts of Interest Personal Securities Transactions .. 28. Trading Restrictions .29. Negative Reports .. 30. Reports by Executing Broker/Dealers .. 30. Personal Securities Transactions and Insider Trading Provisions Under Sections 204A and 206-4 .. 30. Chapter 13 Brokerage Practices & Executions Introduction.

10 35. Best 35. Broker Selection Process .. 35. Trade management 38. Soft Dollar Transactions and Conflicts of Interest .. 38. Referral of Clients to SFA by Broker/Dealers .. 38. Directed Brokerage .. 38. Negotiation of Brokerage Commission Rates .. 38. Chapter 14 Wrap Fee Programs Wrap Fee Programs for Advisers .. 39. Limitations of Wrap Fee Programs .. 39. Wrap Fee Disclosures Required of Sub-Advisers .. 39. Other Disclosures .. 40. Chapter 15 Marketing/Performance Calculation Policy Regarding Marketing/Performance .. 40. Chapter 16 Compensation/Client Fees Advisory Fees Based on Assets Under Management.