ADV Part II
Item 1 - Cover Page
FORM ADV – PART 2A INFORMATION
March 30, 2016 iQuantifi, Inc. 109 International Drive, Suite 200 Franklin, TN 37067 Phone (615) 807-2028 www.iQuantifi.com
This brochure provides information about the qualifications and business practices of iQuantifi, Inc. (“iQuantifi”). If you have any questions about the contents of this brochure, please contact us at (615) 807-2028. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission (“SEC”) or by any state securities authority.
Additional information about iQuantifi (CRD No. 169237), including a copy of its Form ADV Part 1, also is available on the SEC’s website at www.adviserinfo.sec.gov.
iQuantifi is a registered investment adviser. Registration of an investment adviser does not imply any certain level of skill or training.
Item 2 - Material Changes To This Brochure Since Last Annual Update filed March 2015
Effective March 2016, iQuantifi has revised its business focus. Rather than marketing to individual advisory clients directly through its own website, iQuantifi is seeking out financial institutions with which to license the use of their proprietary financial planning program. These financial institutions will then offer the iQuantifi tool through their own website to their clients.
We recommend you review the entire ADV brochure to see the details related to this transition. A complete copy can be obtained by contacting us at 615-807-2028.
Item 3 - Table of Contents
- Cover Page
- Material Changes Since Last Annual Update
- Table of Contents
- Advisory Business
- Fees and Compensation
- Performance Based Fees and Side-by-Side Management
- Types of Clients
- Methods of Analysis, Investment Strategies and Risk of Loss
- Disciplinary Information
- Other Financial Industry Activities and Affiliations
- Code of Ethics, Participation or Interest in Client Transactions and Personal Trading
- Brokerage Practices
- Review of Accounts
- Client Referrals and Other Compensation
- Investment Discretion
- Voting Client Securities
- Financial Information
Item 4 - Advisory Business
iQuantifi, Inc. is a Delaware corporation. iQuantifi's mission is to help people identify, prioritize and achieve their financial goals. iQuantifi does this through an interactive web based service to individual investors looking for independent, personalized investment advice. iQuantifi became registered with the U.S. Securities and Exchange Commission in January 2014. iQuantifi is owned by Thomas White and other individuals each holding less than additional shareholders owning less than a 25% interest.
iQuantifi does not control any other investment advisory firm.
iQuantifi has developed an innovative system that provides customized recommendations that will help individuals achieve their financial goals. iQuantifi is seeking to contract with financial institutions to license the use of the iQuantifi financial planning tool. Financial institutions will offer the iQuantifi tool to their clients through their own proprietary website.
The financial planning tool starts with the user identifying a demographic that best describes them, such as single, married, married with kids, etc… Once the user's demographic is selected, the system will identify which goals the user has or needs to work on. For example, a single person will automatically have disability insurance and retirement goals whereas a married couple with kids will include life insurance and college funding. The user may also select other goals they want to accomplish to include but not limited to, buying a car, renting, relocating, buying an engagement ring, wedding planning, family planning, travel or buying a house. In addition, the system automatically recommends actions on building up an emergency fund if the user does not have a sufficient cash reserve position. Debt is also addressed by giving the user ideas on how to attack their debt relative to their goals.
The patent pending business rules in place in the system take all of the information provided by the user and determines the specific products to be recommended to the user for each of their financial goals. The business rules are based on identifying the specific product that the user needs to accomplish a specific goal which is also suitable to the user based on their income and net worth information they have provided through the website.
The products available will be dependent on the financial institutions offering access to the tool. iQuanitfi will review each financial institutions proprietary product offering for suitability and integration into the program. iQuantifi will also fill in gaps with products that are not proprietary to the financial institution to assure that there are products covering various investor investment objective and risk parameters.
iQuantifi does not provide discretionary or non-discretionary investment management services, or participate in any wrap fee programs. iQuantifi does not execute trades for users. A user must make an independent determination as to whether to follow any recommendation made by the program, and must make its own arrangements for execution of any desired trades.
Item 5 - Fees and Compensation
Fees paid to iQuantifi by financial institutions for use of the iQuantifi program tool include an annual licensing fee for the use of the financial planning tool, a one-time integration fee and under certain circumstances, a lead generation fee for each financial institution proprietary product that the system recommends to a user. All fees are negotiable and depend on the time associated with the integration, the complexity of the website that the iQuantifi program has to be incorporated into, the size of the financial institution's client base, and the number of proprietary and non-proprietary products that need to be vetted to be included into the program. The actual fee is determined at the time of contract signing. The licensing fee is payable quarterly before services are provided, the one-time integration fee is payable upon signing of the licensing agreement. If there is a lead generation fee included, this is payable quarterly after services are provided based on a tally on the last day of the quarter of the proprietary products recommend to users during that month. The fees can range from $30,000 to $2,000,000.
There will be no fee paid to iQuantifi by the individual users that have access to the financial planning tool.
The term of each agreement is negotiable, but may be terminated by iQuantifi without cause upon 30 days advance notice. The agreement may also be terminated by either party if the other party materially breaches the agreement and such breach is not cured within 30 days. Upon termination the financial institution must cease all access and use of the iQuantifi tool. Any prepaid licensing fees will be prorated to the date of termination and any unearned fees will be refunded. There will be no refund of the integration fee and any lead generation fees if applicable will be prorated to the date of termination and payable to iQuantifi.
Mr. White the Founder and CEO of iQuantifi, is also licensed to sell insurance products for various insurance companies. He is not currently actively soliciting customers to purchase such products, but does maintain his license. He could receive customary commissions for the sale of such products should he decide to become active again and an individual chose to make purchases through him.
Item 6 - Performance Based Fees and Side-by-Side Management
iQuantifi does not charge performance-based fees. All fees are disclosed above.
Item 7 - Types of Clients
iQuantifi services are financial institutions to add the iQuantifi program as a tool for their individual customers who seek independent, objective and actionable advice to help them make investment decisions and achieve their financial goals.
To access our services, the user is required to have an account with the financial institution so that we can maintain privacy and security in relation to the user's confidential information and save the user's profile for future visits to the program through the financial institution's website.
Item 8 - Methods of Analysis, Investment Strategies and Risk of Loss
The investment advisory business rules in place within the iQuantifi system were based on two specific investment strategies: asset allocation and security selection. Both are based on fundamental analysis. In providing individualized investment advice to each program user, the system takes into account three factors: the investment objective of the account (i.e. capital preservation, income or capital appreciation), the timeframe of the goal that the account is earmarked for, and the investment experience of the user (i.e. what types of investments the user currently owns or has owned in the past).
The iQuantifi system provides specific product recommendations. The products are limited to those that Tom White the owner and developer of iQuantifi has researched and/or is familiar with based on his experience in the financial services industry, in addition to those he has researched that are proprietary to the financial institution. The iQuantifi program does not include the entire universe of securities products available to a potential investor.
iQuantifi does not guarantee the results of the advice given. Thus, significant losses can occur by investing in any security, or by following any strategy, including those recommended by iQuantifi.
Item 9 - Disciplinary Information
iQuantifi does not have any disciplinary information to report regarding itself or any of its related persons.
Item 10 - Other Financial Industry Activities and Affiliations
Mr. White the Founder and CEO of iQuantifi, is also licensed to sell insurance products for various insurance companies. He is not currently actively soliciting customers to purchase such products, but does maintain his license.
Item 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading
iQuantifi has adopted a Code of Ethics (the "Code") consistent with the Investment Advisors Act of 1940. The Code establishes and reinforces a standard of business conduct that is expected of persons associated with iQuantifi, and provides specific guidance related to avoiding actual or apparent conflicts of interest. The Code emphasizes certain governing principles iQuantifi personnel should always be mindful of in the course of their work, including the duty at all times to place the interest of users first, the protection of material non-public information, and the obligation to report violations of the Code of Ethics an any applicable laws. Upon request, iQuantifi will provide a copy of the Code to users and prospective users. To request a copy of the Code please contact us at email@example.com.
Neither iQuantifi, nor any of its employees, recommends to users, or buys or sells for user accounts, securities in which we have a direct material financial interest. iQuantifi does not have investment authority, discretionary or otherwise, to purchase any securities on behalf of users. Once a recommendation has been generated by the website, it is in the discretion of the user whether or not to enter into a transaction based on any such recommendation, when to enter into any such transaction and which broker to use for the execution thereof. However, iQuantifi's officers and employees could conceivably purchase securities for their own accounts which may, in certain instances, be the same securities as those recommended for users, including shares in the same mutual fund. The securities which are recommended to users are highly personalized and are based on each user's profile. Any such purchase of the same securities would be coincidental.
Item 12 - Brokerage Practices
iQuantifi does not select or recommend broker-dealers for user transactions. As iQuantifi does not have discretionary authority to determine the broker-dealer to be used or the commission rates to be paid, program users are responsible for their own broker-dealer transactions, including the commissions payable.
iQuantifi does not pay for any products, research or services from any brokers, nor does iQuantifi receive any referrals from any brokers for directing program users to them.
Item 13 - Review of Accounts
iQuantifi does not review program user accounts nor do we provide reports on specific accounts to individual users. iQuantifi may as requested provide various reports to the financial institution regarding the use of program by financial institution customers.
iQuantifi may from time to time send alerts, emails or other notifications to program users if the system detects particular market movements or conditions that may be relevant to the program user based on the program user's preferences as indicated to us via the financial institution website.
Item 14 - Client Referrals and Other Compensation
iQuantifi does not currently have any formal client referral relationships. Thus, it does not pay any fee to a third party for making client referrals to it. Also, as indicated above, the firm does not direct brokerage transactions to any third party, in return for client referrals.
Item 15 - Custody
iQuantifi does not take custody of user funds or securities. User funds and securities are held under the custody of the custodian selected by the program user.
Program users should confirm the frequency of account statements directly with their custodian, and these statements should be reviewed carefully.
To the extent a program user receives any account report from iQuantifi, iQuantifi recommends the program user carefully review the report to verify the information was input into the website correctly.
Item 16 - Investment Discretion
iQuantifi does not have discretionary authority to manage securities accounts on behalf of program users.
Item 17 - Voting Client Securities
iQuantifi does not vote proxies on behalf of program users who will receive such notices from their account’s custodian.
iQuantifi also does not take any action on legal notices it or a program user may receive from issuers of securities held by a program user.
Item 18 - Financial Information
iQuantifi does not receive advisory fees of more than $1,200 six months or more in advance, thus no financial statement for iQuantifi is attached. iQuantifi does not have any financial condition that is reasonably likely to impair its ability to meet its contracted commitment to any financial institution client.