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Item 1 Cover Page Counterpoint Capital Advisers, LLC Part 2A of Form ADV Disclosure Brochure 503-482-6579 www.CounterpointCA.com February 22, 2018 This brochure provides information about the qualifications and business practices of Counterpoint Capital Advisers. If you have any questions about the contents of this brochure, please contact Jeff Kuest at 503-482-6579 or via email at [email protected] . 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. Counterpoint Capital Advisers is a state of Oregon registered investment adviser. Registration does not imply any particular level of skill or training. Additional information about Counterpoint Capital Advisers is also available on the SEC’s website at www.adviserinfo.sec.gov .

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Page 1: Counterpoint Capital Advisers - financialanie.comfinancialanie.com/.../Counterpoint-Form-ADV-Part-2.pdf · 4 Item 4 – Advisory Business Overview, History, and Ownership Counterpoint

Item 1 – Cover Page

Counterpoint Capital Advisers, LLC

Part 2A of Form ADV

Disclosure Brochure

503-482-6579

www.CounterpointCA.com

February 22, 2018

This brochure provides information about the qualifications and business practices of

Counterpoint Capital Advisers. If you have any questions about the contents of this brochure,

please contact Jeff Kuest at 503-482-6579 or via email at [email protected]. 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.

Counterpoint Capital Advisers is a state of Oregon registered investment adviser. Registration

does not imply any particular level of skill or training.

Additional information about Counterpoint Capital Advisers is also available on the SEC’s

website at www.adviserinfo.sec.gov.

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Item 2 – Material Changes

This Brochure includes certain changes that may be considered material as compared to our previously

filed Brochure, dated January 26, 2018, including an updated description of our advisory business and

investment management services, and in particular, the Equilibrium Balanced Growth portfolio and The

Smarter Retirement Portfolio marketed under our Financial ANIE brand. (Item 4).

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Item 3 - Table of Contents

Item 1 – Cover Page ............................................................................................................................................ i

Item 2 – Material Changes ................................................................................................................................ ii

Item 3 - Table of Contents ............................................................................................................................... iii

Item 4 – Advisory Business .............................................................................................................................. 4

Item 5 – Fees and Compensation ..................................................................................................................... 5

Item 6 – Performance-Based Fees and Side-By-Side Management ............................................................. 6

Item 7 – Types of Clients ................................................................................................................................... 6

Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss ..................................................... 6

Item 9 - Disciplinary Information .................................................................................................................... 7

Item 10 - Other Financial Industry Activities and Affiliations .................................................................... 7

Item 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading .......... 7

Item 12 - Brokerage Practices ........................................................................................................................... 8

Item 13 - Review of Accounts ........................................................................................................................... 8

Item 14 - Client Referrals and Other Compensation ..................................................................................... 8

Item 15 – Custody .............................................................................................................................................. 9

Item 16 - Investment Discretion ....................................................................................................................... 9

Item 17 - Voting Client Securities .................................................................................................................... 9

Item 18 - Financial Information ........................................................................................................................ 9

Item 19 – Requirements for State-Registered Advisors ................................................................................ 9

Brochure Supplement ...................................................................................................................................... 11

Item 3 - Table of Contents

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Item 4 – Advisory Business

Overview, History, and Ownership

Counterpoint Capital Advisers (“Counterpoint”, “we”, “our”, “us”) is an independent, fee-only

investment advisory firm registered with the State of Oregon. Our principal place of business is located in

Tigard, Oregon. Counterpoint, or its predecessor company, Equitable Capital Management, LLC, has

been registered as an investment adviser with the State of Oregon since 2009. Our principal owner is Jeff

Kuest, CFA, CFP®.

Investment Management

Counterpoint primarily manages two satellite-only and one core-satellite investment strategies for

protecting and growing institutional and accredited investors’ money in all types of markets. We also

market our core-satellite investment strategy as The Smarter Retirement Portfolio to retail investors under

our Financial ANIE brand (www.financialanie.com). We identify investment opportunities for our

portfolios through a repeatable process using a proprietary, rules-based investment algorithm based on

the Economic Laws of Supply and Demand that uses highly liquid exchange traded funds (ETF’s) to

build our portfolios.

The Equilibrium Aggressive Growth portfolio is a satellite-only portfolio operating as alpha strategy

(active risk and return management). We identify daily where to invest using our algorithm to calculate

supply/demand equilibriums for six U.S. and international equity asset classes. We then use our unique

braking and steering system to employ either an unfavorable market allocation (100% cash and 30%

short the least demanded asset classes) or a favorable market allocation (100% long the most demanded

asset class). The Equilibrium Aggressive Growth portfolio is not designed to provide diversification for

clients.

The Equilibrium Growth portfolio is identical to the Aggressive Growth portfolio except its unfavorable

market allocation is just 100% cash (i.e., no equity shorts). The Equilibrium Growth portfolio is not

designed to provide diversification for clients.

The Equilibrium Balanced Growth portfolio and The Smarter Retirement Portfolio are core-satellite

strategies, with the core operating as a beta strategy (passive asset allocation) and the satellite operating

as an alpha strategy (active risk and return management). The core allocation consists of a 25% allocation

to passively-managed equity ETF’s (U.S. large, mid and small cap, developed international large/mid cap,

developed international small cap and international emerging markets), a 25% allocation to passively-

managed fixed income ETFs (iBond® ladder) and a 50% allocation to the Equilibrium Growth portfolio.

Overall portfolio allocations are rebalanced to the standard 25/25/50 allocation when the algorithm rotates

back to a favorable market allocation from an unfavorable market allocation.

Counterpoint’s Equilibrium Aggressive Growth and Growth portfolios are considered to have high

concentration and high turnover and are not necessarily appropriate as a complete diversification tool

and are not designed to provide diversification to clients. Concentrated portfolios are also subject to

further risk that the poor performance of one ETF in such portfolio could have a greater impact than if the

portfolio had a broader range of investments. Please see additional information about “material risks” in

Item 8 of this document. Clients may need to seek other investment advice regarding portfolio

diversification.

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Counterpoint’s investment personnel are available to talk with clients as necessary to discuss portfolio

risk and client portfolio mandates to ensure our investment management services are consistent with the

client’s goals and risk tolerance. Clients are advised that it is their responsibility to promptly notify us of

any changes in their financial situations or investment objectives so that we can review, evaluate, and

revise previous recommendations and/or services. We may request that a client completes a new profile.

Wrap Fee Programs

Counterpoint does not participate in wrap fee programs.

Assets Under Management

As of December 31, 2016, Counterpoint’s total assets under management were approximately $1,000,000.

Of this amount, we manage approximately $1,000,000 on a discretionary basis and approximately $0 on a

non-discretionary basis.

Item 5 – Fees and Compensation

Asset-Based Fees

The specific manner in which fees are charged by Counterpoint is established in a client’s written

agreement with us. In general, clients are assessed an asset-based fee of 0.75% per annum of assets under

management and is fixed for the life of the account. At our sole discretion, we may reduce our fees.

General Information on Fees

Counterpoint will generally bill its fees on a quarterly basis. Fees are payable in arrears and are typically

deducted directly from the client’s accounts. The fee for a partial billing period at the commencement or

termination of agreement will be billed on a prorated basis contingent on the number of days an account

was open during the quarter.

While it is not anticipated that mutual funds will be included in clients' portfolios, money market mutual

funds may be used to 'sweep' unused cash balances until they can be appropriately invested. Clients

should recognize that all fees paid to Counterpoint for investment advisory services are separate and

distinct from the fees and expenses charged by mutual funds to their shareholders. These fees and

expenses are described in each fund's prospectus. These fees will generally include a management fee,

other fund expenses, and a possible distribution fee.

Valuation

Valuations of securities for the purpose of establishing registrant’s fees are prepared as of the last

business day of each preceding calendar quarter, or month as may be applicable in which an investment

advisory agreement is in full effect (“valuation date”). Listed securities are valued on the basis of the last

traded sales price on the valuation date, which Counterpoint obtains from an independent source.

Valuations reported and utilized by us to calculate fees may in some cases vary from valuations reported

by custodians.

Termination

Any investment advisory agreement may be terminated at any time by the investment advisory client.

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Item 6 – Performance-Based Fees and Side-By-Side Management

Counterpoint does not charge any performance fees at this time.

Item 7 – Types of Clients

Counterpoint provides investment management services to individuals and high net worth individuals.

However, our clients may also include corporations, pension and profit-sharing plans, Taft‐Hartley plans,

foundations, endowments, state and municipal government entities, pooled investment vehicles and

investment companies.

Counterpoint generally requires a minimum account size of $250,000 for all Equilibrium portfolios and

for The Smarter Retirement portfolio. At our sole discretion, we may reduce account minimums.

Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss

Counterpoint identifies opportunities through a repeatable process using a proprietary, rules-based

investment algorithm. Our algorithm daily analyzes price action in global equity markets to build a

global supply/demand curve to determine whether clients should be invested in equities or cash.

Additionally, our algorithm calculates points of inflections in the supply/demand curves of various global

equity asset classes and identifies which ones represent the best and worst short-term risk-adjusted

return opportunities.

Risk of Loss

Any investment activity, including investing in securities, involves risk of loss, including complete loss,

that clients should be prepared to bear.

Material Risks

Depending on the investment strategy and the type of financial instruments used at any given time to

implement that strategy, clients may face the following material investment risks:

Model Risk: Counterpoint’s investment process includes an effort to monitor and manage risk, but that

should not be confused with, nor does it imply, low risk, or the ability to control risk. The profitability of

a significant portion of our investment selections may depend to a great extent upon correctly assessing

the future course of price movements of various equity markets and asset classes. There can be no

assurance that we will be able to predict those price movements accurately, that our algorithm will result

in successful buy/sell investment signals in the future, or that any aims, assumptions, expectations and/or

goals described in this brochure will be realized. Any past success of a particular investment strategy

does not imply or guarantee future success.

Systematic or market risk: Counterpoint portfolios are invested in the global equity markets and are

exposed to these markets. For example, if U.S. stocks decline, the portion of the portfolio invested in the

U.S. stock market will decline. To a certain degree, we attempt to mitigate this risk using our proprietary

algorithm to determine whether to be invested in the market or in cash.

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Foreign market risk: Foreign investments, especially investments in emerging markets, can be riskier and

more volatile than investments in the United States. Adverse political and economic developments or

changes in the value of foreign currency can make it difficult to sell such securities and could reduce the

value of the investments. Differences in tax and accounting standards and difficulties in obtaining

information about foreign companies can negatively affect investment decisions. Emerging markets may

have governments that are less stable, markets that are less liquid and economies that may be less

developed.

Counterparty risk: To the degree Counterpoint portfolios own exchange-traded notes, there is exposure

to the credit risk of the issuers. Exchange-traded funds also have some “product” or “structural” risk

associated with them, as they will sometimes provide market exposure through indirect means, like

futures, options and forwards contracts.

Item 9 - Disciplinary Information

Neither Counterpoint nor its employees have been involved in legal or disciplinary events related to past

or present clients.

Item 10 - Other Financial Industry Activities and Affiliations

Other than the advisory activity described in this brochure, neither Counterpoint nor its employees have

any other financial industry activities or affiliations.

Item 11 - Code of Ethics, Participation in Client Transactions and Personal Trading

Code of Ethics

Counterpoint has adopted a code of ethics that governs a number of potential conflicts of interest it has

when providing investment advisory services to clients. This code of ethics is designed to ensure we meet

its fiduciary obligation to its clients. The code of ethics adopted by us sets forth the standards for the

conduct and professionalism by which all our employees and related persons of the firm must adhere to,

including guidance regarding their personal securities transactions. The code of ethics is also designed to

prevent any situations in which employees or related persons could (1) put their personal interests ahead

of client interests, (2) take inappropriate advantage of their position or affiliation with us, or (3) create a

conflict of interest or any abuse of their position of trust and responsibility.

Participation or Interest in Client Transactions and Personal Trading

From time to time related persons, including the Partners, Officers and employees of Counterpoint (each

an “Access Person”) buys or sells securities for personal accounts and/or for related accounts in which

such persons have a beneficial interest. Access Persons may buy/sell securities we recommend to clients

on the same day as clients. For across‐the‐board strategy changes, Access Persons’ transactions may be

aggregated together with clients’ transactions for pro rata execution at a uniform price.

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Item 12 - Brokerage Practices

Except to the extent clients direct otherwise, Counterpoint may use its discretion in recommending a

broker-dealer. However, no client is ever obligated to effect transactions through the broker-dealer

recommended by us. In recommending broker-dealers, we will comply with the fiduciary duty to obtain

“best execution.” Additionally, in recommending a broker-dealer, we will comply with the Securities

Exchange Act of 1934 and will take into account such relevant factors as (1) price, (2) broker-dealer’s

facilities, reliability, and financial responsibility, (3) ability of the broker-dealer to effect transactions,

particularly with regard to such aspects as timing, order size, and execution of order, (4) the research and

related brokerage services provided by such broker or dealer, notwithstanding that client accounts may

not be the direct or exclusive beneficiary of such services, and (5) any other factors we consider to be

relevant.

Trade Aggregation

Clients authorize Counterpoint to act at its discretion to aggregate purchases and sales and other

transactions made for their accounts with purchases and sales and other transactions in the same or

similar securities or instruments for other clients. When transactions are so aggregated, the actual prices

applicable to the aggregated transactions will be averaged, and the account will be deemed to have

purchased or sold its proportionate share of the securities or instruments involved at the average price so

obtained. We will direct that confirmations of any transactions effected for the accounts will be sent, in

conformity with applicable law, to clients.

Item 13 - Review of Accounts

Investment management accounts are under constant review by Jeff Kuest, CFA, CFP®. All accounts are

under constant supervision concerning adherence to investment mandates and client investment

restrictions. Daily monitoring of accounts is performed to verify, among other reasons, client transactions,

the receipt and disbursement of funds, and compliance with clients’ investment guidelines and

restrictions. In addition to the statements provided by the custodians, Counterpoint furnishes reports to

clients on a quarterly basis or more frequently upon client request.

Item 14 - Client Referrals and Other Compensation

Client Referrals

Counterpoint may in the future enter into solicitation agreements under which it compensates persons

for client referrals in accordance with Section 206(4)‐3 of the Investment Advisers Act of 1940 and similar

state regulations. Any solicitation agreement would be reviewed to ensure compliance with Rule 206(4)‐3.

A solicitation fee would be paid pursuant to a written agreement retained by both the investment adviser

and the solicitors and required disclosures would be provided to the introduced client prior to or at the

time of entering into any advisory contract.

Other Compensation

Counterpoint has no arrangements, written or oral, in which it is paid cash or receives some economic

benefit from a third party for its referral of clients or prospects.

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Item 15 – Custody

Counterpoint does not maintain possession of any client account assets. Client assets must be held by a

bank, broker dealer, mutual fund transfer agent or other such institution deemed a “qualified custodian”

by the SEC. We shall have no liability to clients for any loss or other harm to any property in the accounts,

including any harm to any property in the accounts resulting from the insolvency of the custodian or any

acts of the agents or employees of the custodian and whether or not the full amount or such loss is

covered by the Securities Investor Protection Corporation (“SIPC”) or any other insurance which may be

carried by the custodian. Clients understand that SIPC provides only limited protection for the loss of

property held by a broker-dealer.

Clients should receive at least quarterly statements from the broker dealer, bank or other qualified

custodian that holds and maintains client’s investment assets. We urge you to carefully review such

statements and compare such official custodial records to the account statements that we may provide to

you which statements may vary from custodial statements based on accounting procedures, reporting

dates, or valuation methodologies of certain securities.

Item 16 - Investment Discretion

Except as otherwise instructed, clients grant Counterpoint ongoing and continuous discretionary

authority to execute investment recommendations in accordance with their investor profile without prior

approval for each specific transaction. Under this discretionary authority, clients allow us to purchase

and sell securities and other instruments in their accounts, arrange for delivery and payment, select and

retain sub-advisors, and otherwise act on their behalf in matters necessary or incidental to the handling of

their accounts. Clients must execute instructions regarding our trading authority as required by the

custodians.

Item 17 - Voting Client Securities

As a matter of policy and practice, Counterpoint does not vote proxies for clients. Clients retain the

responsibility for receiving and voting proxies for any and all securities maintained in their accounts.

Item 18 - Financial Information

Registered investment advisers are required in this Item to provide you with certain financial information

or disclosures about the adviser’s financial condition. Counterpoint has no financial commitment that

impairs its ability to meet contractual and fiduciary commitments to clients, and has not been the subject

of a bankruptcy proceeding.

Item 19 – Requirements for State-Registered Advisors

Principals

See Brochure Supplement on page 13.

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Other Business Activity

Neither Counterpoint nor its employees are actively engaged in any business other than giving

investment advice.

Performance-Based /Fees

Neither Counterpoint nor its employees are compensated with performance-based fees.

Material Events

Neither Counterpoint nor its employees have been involved in any arbitration, civil, self-regulatory

organization, or administrative proceedings.

Relationships with Issuers of Securities

Neither Counterpoint nor its employees have any relationship or arrangement with any issuers of

securities.

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Brochure Supplement

Jeff Kuest, CFA, CFP® Principal

Counterpoint Capital Advisers

503-482-6579

This brochure supplement provides information about Jeff Kuest that supplements

Counterpoint Capital Adviser’s brochure. You should have received a copy of that brochure.

Please contact Jeff Kuest if you did not receive the brochure or if you have any questions about

the contents of this supplement.

Additional information about Jeff Kuest is available on the SEC’s website at

www.adviserinfo.sec.gov.

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Item 2 - Educational Background and Experience

Jeff Kuest, CFA, CFP®

Born: 1963

Educational Background:

Certified Financial Planner Professional (2003)

Chartered Financial Analyst Charterholder (2001)

Master of Business Administration, University of Washington (1989)

Bachelor of Science in Electrical Engineering, Washington State University (1985)

Business Experience:

Founder and Principal, Counterpoint Capital Advisers, LLC (2009 – Present)

Associate Research Analyst, Pacific Crest Securities (2005 – 2008)

Financial Advisor, Smith Barney (2004 – 2005)

Sales Manager, Morgan Stanley (2002 – 2004)

Financial Advisor, Morgan Stanley/Dean Witter Reynolds (1996 – 2002)

Explanation of Professional Designations

1) The CERTIFIED FINANCIAL PLANNER™, CFP® and federally registered CFP (with flame design)

marks (collectively, the “CFP® marks”) are professional certification marks granted in the United

States by Certified Financial Planner Board of Standards, Inc. (“CFP Board”). The CFP® certification is

a voluntary certification; no federal or state law or regulation requires financial planners to hold CFP®

certification. It is recognized in the United States and a number of other countries for its (1) high

standard of professional education; (2) stringent code of conduct and standards of practice; and (3)

ethical requirements that govern professional engagements with clients. Currently, more than 62,000

individuals have obtained CFP® certification in the United States. To attain the right to use the CFP®

marks, an individual must satisfactorily fulfill the following requirements:

Education – Complete an advanced college-level course of study addressing the financial

planning subject areas that CFP Board’s studies have determined as necessary for the

competent and professional delivery of financial planning services, and attain a Bachelor’s

Degree from a regionally accredited United States college or university (or its equivalent from

a foreign university). CFP Board’s financial planning subject areas include insurance planning

and risk management, employee benefits planning, investment planning, income tax

planning, retirement planning, and estate planning;

Examination – Pass the comprehensive CFP® Certification Examination. The examination,

administered in 10 hours over a two-day period, includes case studies and client scenarios

designed to test one’s ability to correctly diagnose financial planning issues and apply one’s

knowledge of financial planning to real world circumstances;

Experience – Complete at least three years of full-time financial planning-related experience

(or the equivalent, measured as 2,000 hours per year); and

Ethics – Agree to be bound by CFP Board’s Standards of Professional Conduct, a set of

documents outlining the ethical and practice standards for CFP® professionals.

Individuals who become certified must complete the following ongoing education and ethics

requirements in order to maintain the right to continue to use the CFP® marks:

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Continuing Education – Complete 30 hours of continuing education hours every two years,

including two hours on the Code of Ethics and other parts of the Standards of Professional

Conduct, to maintain competence and keep up with developments in the financial planning

field; and

Ethics – Renew an agreement to be bound by the Standards of Professional Conduct. The

Standards prominently require that CFP® professionals provide financial planning services at a

fiduciary standard of care. This means CFP® professionals must provide financial planning

services in the best interests of their clients.

CFP® professionals who fail to comply with the above standards and requirements may be subject to

CFP Board’s enforcement process, which could result in suspension or permanent revocation of their

CFP® certification.

2) The Chartered Financial Analyst (CFA) charter is a globally respected, graduate-level investment

credential established in 1962 and awarded by CFA Institute—the largest global association of

investment professionals. There are currently more than 90,000 CFA charterholders working in 134

countries. To earn the CFA charter, candidates must:

Pass three sequential, six-hour examinations;

Have at least four years of qualified professional investment experience;

Join CFA Institute as members; and,

Commit to abide by, and annually reaffirm, their adherence to the CFA Institute Code of

Ethics and Standards of Professional Conduct.

The CFA Institute Code of Ethics and Standards of Professional Conduct, enforced through an active

professional conduct program, require CFA charterholders to:

Place their clients’ interests ahead of their own;

Maintain independence and objectivity;

Act with integrity;

Maintain and improve their professional competence; and,

Disclose conflicts of interest and legal matters.

Passing the three CFA exams is a difficult feat that requires extensive study (successful candidates

report spending an average of 300 hours of study per level). Earning the CFA charter demonstrates

mastery of many of the advanced skills needed for investment analysis and decision making in

today’s quickly evolving global financial industry. As a result, employers and clients are increasingly

seeking CFA charterholders—often making the charter a prerequisite for employment. Additionally,

regulatory bodies in 22 countries and territories recognize the CFA charter as a proxy for meeting

certain licensing requirements, and more than 125 colleges and universities around the world have

incorporated a majority of the CFA Program curriculum into their own finance courses.

The CFA Program curriculum provides a comprehensive framework of knowledge for investment

decision making and is firmly grounded in the knowledge and skills used every day in the

investment profession. The three levels of the CFA Program test a proficiency with a wide range of

fundamental and advanced investment topics, including ethical and professional standards, fixed-

income and equity analysis, alternative and derivative investments, economics, financial reporting

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standards, portfolio management, and wealth planning. The CFA Program curriculum is updated

every year by experts from around the world to ensure that candidates learn the most relevant and

practical new tools, ideas, and investment and wealth management skills to reflect the dynamic and

complex nature of the profession. To learn more about the CFA charter, visit www.cfainstitute.org.

Item 3 – Disciplinary Information

Jeff Kuest has not been involved in legal or disciplinary events related to past or present clients.

Item 4 – Other Business Activities

Jeff Kuest is a member of the CFA Institute and a member of CFA Society of Portland.

Item 5 – Additional Compensation

Jeff Kuest is compensated only by his clients and does not receive compensation or commissions from

any other third parties.

Item 6 – Supervision

Although Jeff Kuest is responsible for his own supervision as Managing Principal of Counterpoint

Capital Advisers, he is held accountable for his actions under the CFP Board’s Standard of Professional

Conduct (http://www.cfp.net/Downloads/2010Standards.pdf) and the CFA Institute’s Code of Ethics and

Standards of Professional Conduct (http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2010.n14.1).

Item 7 – Requirements for State-Registered Advisers

Jeff Kuest has not been involved in any arbitration, civil, self-regulatory organization, or administrative

proceedings.