Main Street Research LLC

Part 2A of Form ADV: Firm Brochure Headquarters: 342 Main Street Lakeville, CT 06039 Other offices: 380 Greenwich Ave, Greenwich CT 06830 30 Liberty Ship Way, Suite 3330 Sausalito, CA 94965 241 East 52nd Street, New York, NY 10022 Telephone: 860.435.2350 Email: msr@ms-research.com Web Address: www.ms-research.com March 31, 2026 This brochure provides information about the qualifications and business practices of Main Street Research LLC (“MSR”). If you have any questions about the contents of this brochure, please contact us at (415) 289-1010 or team@ms-research.com. 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. Registration as an investment adviser does not imply a certain level of skill or training. Additional information about MSR is also available on the SEC’s website at www.adviserinfo.sec.gov. You can search this site by a unique identifying number, known as a CRD number. Our firm's CRD number is 114629. 1  Item 2. Material Changes MSR updates this document annually or more frequently in the event of certain material changes. This section outlines and summarizes any specific material changes made since the document’s previous update. If material changes have been made to the firm’s business philosophies and practices, MSR will deliver a copy of this section to its clients within 120 days of its fiscal year to make sure clients are aware of those material changes. There are no material changes to report since the last annual filing. 2  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 5. Fees And Compensation ............................................................................................. 8 Item 6. Performance-Based Fees And Side-By-Side Management ................................... 12 Item 7. Types Of Clients ......................................................................................................... 13 Item 8. Methods Of Analysis, Investment Strategies And Risk Of Loss ......................... 13 Item 9. Disciplinary Information ........................................................................................... 23 Item 10. Other Financial Industry Activities And Affiliations ........................................... 23 Item 11. Code Of Ethics, Participation In Client Transactions And Personal Trading .... 23 Item 12. Brokerage Practices .................................................................................................... 25 Item 13. Review Of Accounts................................................................................................... 29 Item 14. Client Referrals And Other Compensation ............................................................ 30 Item 15. Custody ........................................................................................................................ 30 Item 16. Investment Discretion ................................................................................................ 31 Item 17. Voting Client Securities ............................................................................................. 31 Item 18. Financial Information ................................................................................................ 32 3  Item 4. Advisory Business MSR is an SEC-registered investment adviser with its principal place of business located in Lakeville, Connecticut, and branch offices in Sausalito, California, New York, and Greenwich, Connecticut. MSR has been registered as an investment adviser since 1993. James E. Demmert is the firm’s Founder, Managing Partner, Chief Investment Officer and majority owner. MSR provides wealth management services to advisory clients. As of 12/31/2025, we were actively managing $2,681,886,634 of clients' assets on a discretionary basis and no assets on a non-discretionary basis. See additional information regarding our services in this Item below. WEALTH MANAGEMENT Our Wealth Management for families and individuals consists of two components: (i) Financial Planning and (ii) Investment Management. For foundations or institutions, we offer the additional component of providing outside chief investment officer services as needed. IRA ROLLOVERS When appropriate, we will recommend that you roll over assets in a current retirement plan account (such as a 401(k) account or an individual retirement account) to another retirement plan account that we will manage on your behalf. In certain such circumstances, a conflict of interest exists as we have an incentive to recommend the retirement plan account rollover because we can earn more compensation as a result of the rollover recommendation. Nonetheless, we follow a process designed to ensure that such retirement plan rollover is in your best interest, including comparing your current retirement plan account (where information is available to us) to the retirement plan account being recommended to you. FINANCIAL PLANNING: Financial planning is a comprehensive evaluation of a client’s current and future financial state by using currently known variables to predict future cash flows, asset values, and withdrawal plans. Through the financial planning process, all questions, information, and analysis are considered as they impact and are impacted by the client's entire financial and life situation. In instances when a client is referred to MSR with a proposed financial plan and/or investment recommendations, MSR will conduct its own separate analysis and provide its own recommendations. Clients who elect to receive this service receive a written report that provides the client with a tailored and detailed financial plan designed to help achieve their financial goals and objectives. 4  In general, the financial plan can address any of the following areas: - Personal. We review family records, budgeting, personal liability, estate information, and financial goals. - Tax & Cash Flow. We analyze the client’s income tax and spending and planning for past, current, and future years and illustrate the impact of various investments on the client's current income tax and future tax liability. In addition, we provide tax guidance but always recommend the client consult with their CPA and/or a tax attorney and work closely with those consultants on the clients’ individual tax matters. - Investments. We analyze investment alternatives and their effect on the client's portfolio. - Insurance. We review existing policies, if applicable, to evaluate life, health, disability, long- term care, liability, home, and automobile coverage. - Retirement. We analyze current strategies and investment plans to help the client achieve their retirement goals. - Death & Disability. We review the client’s cash needs at death, income needs of surviving dependents, and disability income. - Estate. We assist the client in assessing and developing long-term estate planning strategies, including the appropriateness of living trusts, wills, powers of attorney, beneficiary designations, gifts, and asset protection plans. - LifeCase. We provide clients with an easy manner to organize and store important documents (i.e., wills, trust, health proxies/advanced directives, birth certificates, social security cards, financial account statements, tax returns, etc.) digitally on Box, a cloud storage provider for easy “on the go” access. - Next Generation Planning. Our service offering also includes next-generation planning where we assist your children or heirs with a comprehensive, no-cost, wealth management analysis. It involves a broad overview of wealth management, individual analysis of their family assets, and a seasoned "second opinion” of their current wealth and investment management situation. We gather relevant information through in-depth personal interviews. Information gathered typically includes a client's current financial status, tax status, future goals, return objectives, and attitudes towards risk. We carefully review any documents supplied by the client and prepare a written report. Should the client choose to implement the recommendations contained in the plan 5  beyond the investment strategy provided by MSR, we suggest the client work closely with their attorney, accountant, and other advisers. These services are updated annually with the client or sooner if life circumstances change and provided to the clients at no additional costs. Implementation of financial plan recommendations that require more specified expertise that is not provided by MSR is entirely at the client’s discretion including the use of third parties. If client is not already working with a third party, at the client’s request, MSR will provide third party recommendations. Financial Planning recommendations are not limited to any specific product or service offered by a broker-dealer or insurance company other than the custodian’s proprietary money market funds. INVESTMENT MANAGEMENT: We provide continuous advice regarding the investment of client funds tailored to the specific needs of each client. We will create and manage a portfolio based on a client’s goals and objectives as determined through the investment policy statement and the financial planning process described above, if applicable. During this data-gathering process, we determine the client’s individual objectives, time horizons, risk tolerance, and liquidity needs. We may also review and discuss a client’s prior investment history, as well as family composition and background. We currently offer our Wealth Management services on a discretionary basis only. Account supervision is guided by the client's stated objectives (e.g., growth, income, or a balance between growth and income), as well as tax considerations. Clients may impose reasonable restrictions on investing in certain securities, types of securities, or industry sectors. Our investment recommendations are not limited to any specific product or service offered by a broker-dealer other than the custodian’s proprietary money market funds. Our client portfolios primarily consist of individual securities: including domestic and foreign stocks, bonds, exchange- listed real estate investment trusts (“REITs”), Master Limited Partnerships (MLPs), and preferred stock. Exchange-traded funds (“ETFs”) are employed for a portion of a portfolio for strategic purposes such as accessing investments that are relatively illiquid (like foreign stocks and small capitalized stocks). Additionally, ETFs are used to provide greater diversification for clients with small investable asset bases. We typically do not include mutual funds in a client’s portfolio unless the client already owns them. For clients that have expressed an interest in environmental, social, and governance (“ESG”) investing, we employ a model portfolio based on factor scoring from unaffiliated third-party research partners. Factor scoring rates companies based on how well they are performing in ESG criteria compared to industry peers. This model strives to invest in stocks that have ESG scores of at least 50/100. 6  Since our investment strategies and advice are based on each client’s specific financial situation, the investment advice we provide to you may be different or conflict with the advice we give to other clients regarding the same security or investment. Our investment advice and advisory services are tailored to meet the individual needs of clients. MSR chooses investments and/or investment strategies it deems appropriate, given each of our clients’ investment objectives and risk tolerance. Use of Subadvisors MSR can select or recommend certain third-party independent managers (“subadvisors”) to actively manage a portion or all of a client’s assets. When selecting a subadvisor MSR will delegate its authority to the subadvisor and no separate client agreement is necessary. MSR will provide the client with the subadvisor’s disclosure brochure. MSR evaluates a variety of information about subadvisors including the subadvisor’s public disclosure documents, materials supplied by the subadvisor themselves, and other third-party analyses it believes are reputable. To the extent possible, MSR seeks to assess the subadvisor’s investment strategies, past performance, and risk results in relation to its clients. MSR also takes into consideration each subadvisor’s management style, returns, reputation, financial strength, reporting, pricing, and research capabilities, among other factors. Reasonable Restrictions MSR allows clients to place reasonable restrictions on investments in certain securities, types of securities, or industries. To implement a restriction, the client (or authorized individual) may request, in writing or by speaking to their advisor, a limitation or restriction on our discretionary authority with respect to certain securities, types of securities, or industries, to not be bought or sold. Clients are reminded that these changes will not be considered in effect until the client receives such confirmation from MSR. MSR may elect not to accept a client’s account(s) for management if significant restrictions apply. Once received MSR will review the requested restrictions for “reasonableness,” which will be determined in MSR’s sole discretion. If MSR determines that the requested restriction is unreasonable, MSR will notify the client that MSR cannot manage the account with the requested restriction. The client may, thereafter, request that the restriction not be implemented in order to engage MSR to manage or continue to manage the account. Clients should be aware that requested restrictions cannot and will not be implemented on underlying holdings used within the client portfolio of a mutual fund, ETF, or other pooled vehicle, and therefore the client’s accounts may gain exposure to a restricted security, type of security, or industry, through the use of these vehicles. Furthermore, MSR does not and will not 7  monitor the underlying holdings of pooled vehicles for restriction purposes. Clients expressly acknowledge this limitation when engaging MSR to continue managing accounts with restrictions. If restrictions create significant limitations on MSR’s ability to efficiently and/or effectively manage a client’s portfolio, MSR may elect not to accept the client’s account(s) for management. Finally, MSR will not act with discretion with respect to restricted securities. Therefore, trades for these restricted securities always require prior approval from the client. Item 5. Fees and Compensation FEES FOR WEALTH MANAGEMENT SERVICES We offer clients two fee options for our Wealth Management service: a Traditional Fee Schedule and a Performance Fee Schedule. Our Traditional Fee Schedule consists solely of a fee based on a percentage of the amount of assets under management with MSR (a “management fee”). Our Performance Fee Schedule has two fee components: (i) management fee; and (ii) a performance- Upon initially choosing a fee schedule a client may request at any time to change their fee schedule, however, future changes are subject to a 24-month commitment. Performance Fee Schedule qualification will still apply under a potential change request. Under certain circumstances, this 24- month commitment is negotiable or can differ between clients. Subadvisor Fees If appropriate, MSR will enroll a portion or all of a client’s assets with a sub-advisor manager. The fees consist solely of a fee based on a percentage of the amount of assets under the sub-advisor's management. MSR and the sub-advisor share the proceeds of the fee deducted. For some of our clients we manage several accounts which could include accounts of their family members and/or their business accounts. In these cases, MSR’s default is to aggregate the entire amount of assets under management of that client’s accounts, family member and/or business accounts to determine the appropriate fee threshold on our tiered fee schedule described below. Family members include parents, grandparents, siblings, children, grandchildren, and in-laws. All family members must be on the same fee schedule to aggregate. This is employed in an effort to provide the client with the most advantageous fee schedule given that our fees are generally lower on a percentage basis for clients with higher amounts of assets under management. This aggregation method is limited, however, when applied to our performance-based fee option described below. The performance-based fee schedule, rather, is available only to each client that is a “qualified client” as defined in Rule 205-3 of the Investment Advisers Act of 1940. Family member accounts are not aggregated in cases where the individual family member does not independently meet the “qualified client” criteria. Some fee schedules have been negotiated in select circumstances, depending on several factors unique to each client, including the client’s needs/choice, nature, and complexity of the services required. 8  TRADITIONAL FEE SCHEDULE: All fees are based on net assets under management and will be computed on the market value of net assets under management on the last business day of the preceding quarter. This fee schedule shall be deemed to be part of the Wealth Management Agreement. The annual management fee will be calculated as follows and billed and payable in advance quarterly: 1.2500% 1st $2,000,000 1.0000% next $3,000,000 0.7500% next $5,000,000 0.5000% next $10,000,000 0.2500% next $20,000,000 0.1500% next $20,000,000 0.1000% over $60,000,000 PERFORMANCE FEE SCHEDULE: MSR requires that clients electing to pay the Performance Fee Schedule be “qualified clients” as defined in Rule 205-3 of the Investment Advisers Act of 1940. These clients must therefore have at least $1,100,000 under management with MSR or demonstrate a net worth of at least $2,200,000, excluding the value of a natural person’s primary residence and including as liability any debt secured by the primary residence in the 60 days prior or entering into an investment management contract with MSR. Management fees All management fees are based upon net assets under management and will be computed quarterly on the market value of net assets under management on the last business day of the preceding quarter. This fee schedule shall be deemed to be part of the Wealth Management Agreement. The annual management fee will be calculated as follows and billed and payable in advance on a quarterly basis: 0.7500% 1st $ 2,000,000 0.6250% Next $ 3,000,000 0.5000% Next $ 5,000,000 0.2500% Next $ 10,000,000 0.1500% Next $ 20,000,000 0.1000% Over $ 40,000,000 9  Performance Allocation MSR will be specifically allocated a percentage of the net profit allocated to the Client based upon the schedule below: Assets less than $5M Assets $5M-$10M Assets $10-$20M Assets $20M-$60M Assets over $60M 5% 4% 3% 2% 1% This performance allocation will be made at the end of each calendar quarter. All performance allocations are based upon the net profit derived from the Portfolio and will be computed on the last business day of each quarter based upon the net profit derived during that quarter. To ensure that the performance allocation is based upon the long-term performance of the Client’s investment, the performance allocation is subject to a “high water mark.” This limitation prevents MSR from receiving a performance allocation as to “net” profits that simply “restore” net losses previously allocated to the Client that have not been recovered (the loss carryforward). When the Client withdraws capital, any loss carryforward will be adjusted downward in proportion to the withdrawal. Performance-based Fee Disclosures The performance fees were structured with the intent of being fair and reasonable given the client portfolio results. The annual performance-based fee will be based on a percentage of assets under management, net profit (including realized and unrealized gains and losses, dividends and interest, and net of any additions and withdrawals) in a client account during a given calendar quarter. Clients will be charged the performance fee in arrears at the end of each quarter based upon the value (market value or fair market value in the absence of market value), of the client's account at the end on the last day of the previous three-month period. The performance fee will be calculated on the value of the client account after the management fee is assessed and will be debited from the account in accordance with the client authorization. The performance fee component is subject to a “high watermark.” This means that MSR is only entitled to a performance fee when the quarter-end value of a client’s portfolio exceeds the accounts previous highest quarter-end value. During periods when the investment portfolio declines in value or fails to make a new higher market value, MSR is not entitled to a performance fee. Clients who elect to terminate their advisory agreements will be charged a fee based on the performance of the account for the measuring period going back from the termination date and pro-rated from the date on which the performance-based fee was last assessed. 10  Performance-based fees align MSR’s interests with client goals. The performance-based fee also creates a conflict of interest for MSR between its responsibility to manage the assets for the benefit of its clients and its interest in maximizing the profits it will receive. For example, the performance-based fee structure creates an incentive for MSR to recommend investments which are riskier or more speculative than those which would be recommended under a different fee arrangement. In addition, this arrangement also creates an incentive for MSR to favor accounts for which it receives a performance-based fee. MSR has established policies and procedures to review and monitor client account management in relation to the above conflict of interest on an ongoing basis. MSR aims to act in the best interests of its clients, as a fiduciary, and subscribes to managing Traditional Fee and Performance Fee client accounts in a fair and similar fashion. MSR fully discloses to its clients all material information regarding this method of compensation and its risks prior to entering into an advisory contract. Further, MSR manages all client accounts in a manner it deems to be consistent with each clients’ objectives and in line with MSR’s fiduciary duty to its clients. See Item 6 for more details. MINIMUM ACCOUNT REQUIREMENTS: A minimum of $1,000,000 of assets under management is required to open an individual portfolio management account for Traditional account and $1,100,000 for Performance Based-fees account with MSR. This minimum account size is negotiable in limited circumstances. an account is accepted, there are no specific minimum account requirements for maintaining an account. Further, there are no minimum fee requirements. See Item 6 below for additional disclosures. GENERAL FEE INFORMATION Advisory Fees in General: Clients should note that similar advisory services are (or are not) available from other registered (or unregistered) investment advisers for similar or lower fees. Fee Calculations: The valuation of clients’ portfolios is determined and reported by independent pricing services. The account value will be the total value at the close of business on the last day of the previous quarter inclusive of any cash, sweep cash, money market funds, interest, dividends, and gross of any margin balance. Fees are prorated for accounts opened during a quarter. Under certain circumstances, fees are waived, discounted and or negotiated to non-standard rates. We could also group certain related client accounts for the purpose of determining the annualized fee. Further, we may waive or discount advisory fees for family members and friends of the partners and employees of our firm. These fee waivers or discounts are not generally available to advisory clients of MSR. Grandfathering of Minimum Account Requirements and Fees: Pre-existing advisory clients are subject to MSR’s minimum account requirements and advisory fees in effect at the time the client 11  entered into the advisory relationship. Therefore, our firm's fees and minimum account requirements will differ among clients. Termination of the Advisory Relationship Thereafter a client agreement may be canceled at any time, by either party, for any reason upon receipt of written notice. As disclosed above, certain fees are paid in advance of services provided. Upon termination of any account, any prepaid, unearned fees will be promptly refunded, and any unpaid fees will be due and payable. In calculating a client’s reimbursement of fees, we will prorate the reimbursement according to the number of days remaining in the billing period. Fund Fees: All fees paid to MSR for investment advisory services are separate and distinct from the fees and expenses charged by mutual funds and/or ETFs 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. MSR does not actively purchase or recommend mutual funds. Additional Fees and Expenses: In addition to our advisory fees, clients are also responsible for certain fees and expenses charged by custodians and imposed by broker-dealers, such as, ordinary trading fees, foreign exchange trading fees, SEC exchange processing fees, custody fees, trading away from the custodian, incoming Automated Customer Account Transfer Service (ACAT) fees, Delivery Versus Payment (DVP) fees, overnight delivery fees, and certain wire fees. Limited Prepayment of Fees: Under no circumstances do we require or solicit payment of fees in excess of $1,200 more than six months in advance of services rendered. Item 6. Performance-Based Fees and Side-By-Side Management As disclosed in Item 5 of this Brochure, our firm accepts a performance-based fee from certain clients. Such a performance-based fee is calculated based on a share of capital gains on, or capital appreciation of, the assets of the client. To qualify for a performance-based fee arrangement, a client must either demonstrate a net worth of at least $2,200,000 or must have at least $1,100,000 under management immediately after entering into a management agreement with us. Furthermore, since we also have clients who do not pay performance-based fees, we have an incentive to favor accounts that do pay such fees because compensation we receive from these clients is more directly tied to the performance of their accounts. Since we aim at all times to put the interest of our clients first as part of our fiduciary duty as a registered investment adviser, we take the following steps to mitigate these conflicts: 1. We disclose to clients the existence of all material conflicts of interest, including the potential for our firm and employees to earn more compensation from advisory clients who pay performance-based fees; 2. We collect, maintain and document accurate, complete, and relevant client background 12  information, including the client’s financial goals, objectives, and risk tolerance; 3. Our portfolio managers conduct regular reviews of each client account to verify that all recommendations made to a client are suitable to that client’s needs and circumstances; 4. We have implemented policies and procedures for fair and consistent allocation of investment opportunities among all client accounts; 5. We periodically compare holdings and performance of all accounts with similar strategies to identify significant performance disparities indicative of possible favorable treatment; 6. We periodically review trading frequency and portfolio turnover rates to identify possible patterns of “window dressing,” “portfolio churning,” or any intent to manipulate trading to boost performance near the reporting period. 7. We educate our employees regarding the responsibilities of a fiduciary, including the need for having a reasonable and independent basis for the investment advice provided to clients and equitable treatment of all clients, regardless of the fee arrangement. Performance-based fees will only be charged in accordance with the provisions of Rule 205-3 of the Investment Advisers Act of 1940 and/or applicable state regulations. Our clients must understand the performance-based fee method of compensation and its risks prior to entering into a management contract with us. Item 7. Types of Clients MSR provides its advisory services, where appropriate, to individuals, trusts, estates, charitable organizations, foundations, pension and profit-sharing plans, corporations, and other business entities. As previously disclosed in Item 5, our firm has established certain initial minimum account requirements based on the nature of the service(s) being provided. Item 8. Methods of Analysis, Investment Strategies and Risk of Loss METHODS OF ANALYSIS We use the following methods of analysis in formulating our investment advice and/or managing client assets: Fundamental Analysis: We attempt to gauge the intrinsic value of securities, industries, sectors, regions, and asset classes by looking at economic and financial factors (including traditional measures of valuation, the overall economy, industry conditions, and financial conditions) to determine if a security is underpriced (indicating it may be a good time to buy) or overpriced (indicating it may be time to sell). 13  Fundamental analysis does not attempt to anticipate general market movements. This presents a potential risk, as the price of a security can move up or down along with the overall market regardless of the economic and financial factors considered in evaluating a security. Quantitative Analysis: Quantitative analysis remains a cornerstone of quantitative finance, asset pricing, return forecasting, risk modeling, and ultimately equity portfolio management. We strive to decompose equity returns into different components – “Factors” – which allow us to better understand risk and return in the context of security selection and portfolio construction. We quantitatively rank how attractive investment opportunities are based on “Factors” such as valuation, liquidity, profitability to name a few, as an example. Technical Analysis: Technical analysis involves the analysis of past market movements and the application of that analysis to the present in an attempt to recognize recurring patterns of investor behavior and to predict future price movement. Charting and cyclical analysis are types of technical analysis that we use. Charting involves the review of charts of market and security activity in an attempt to identify when the market is moving up or down and to predict how long the trend may last and when that trend might reverse. Cyclical analysis involves measuring the movements of a particular security relative to the overall market in an attempt to predict the price movement of the security. Technical analysis does not consider the underlying financial conditions of a security. This presents a risk in that a poorly managed or financially unsound investment can underperform regardless of market movement. Using both fundamental and technical analysis, we develop many investment ideas internally through our Investment Committee. The Committee analyzes and discusses economic conditions, demographic and macro trends, global market conditions, and specific investment ideas and opportunities in all asset sectors. These discussions lead the Committee to develop target asset allocation guidelines for all asset sectors and to strategically alter them over the course of market and business cycles. Mutual fund and/or ETF analysis: In cases where a client already owns a mutual fund or whose portfolio contains an ETF, we look at the experience and track record of the manager of the mutual fund or ETF in an attempt to determine if that manager has demonstrated an ability to invest over a period of time and in different economic conditions. We also look at the underlying assets in a mutual fund or ETF in an attempt to determine if there is a significant overlap in the underlying investments held in another fund(s) in the client’s portfolio. We also monitor the funds or ETFs in an attempt to determine if they are continuing to follow their stated investment strategy. A risk of mutual fund and/or ETF analysis is that, as in all securities investments, past performance does not guarantee future results. A manager who has been successful may not be 14  able to replicate that success in the future. In addition, as we do not control the underlying investments in a fund or ETF, managers of different funds held by the client may purchase the same security, increasing the risk to the client if that security were to fall in value. There is also a risk that a manager may deviate from the stated investment mandate or strategy of the fund or ETF, which could make the holding(s) less suitable for the client’s portfolio. Risks for all forms of analysis: Our securities analysis methods rely on the assumption that the companies whose securities we purchase and sell, the rating agencies that review these securities, and other publicly available sources of information about these securities, are providing accurate and unbiased data. While we are alert to indications that data may be incorrect, there is always a risk that our analysis may be compromised by inaccurate or misleading information. INVESTMENT STRATEGIES We use the following strategies in managing client accounts, provided that such strategies are appropriate to the needs of the client and consistent with the client's investment objectives, risk tolerance, and time horizons, among other considerations: Long-term purchases: We purchase securities with the idea of holding them in the client's account for a year or longer. Typically, we employ this strategy when: - we believe the securities to be currently undervalued, and/or - we want exposure to a particular asset class over time, regardless of the current projection for this class. A risk in a long-term purchase strategy is that by holding the security for this length of time, we may not take advantage of short-term gains that could be profitable to a client. Moreover, if our predictions are incorrect, a security may decline sharply in value before we make the decision to sell. Short-term purchases: MSR very rarely employs the use of short-term trading strategies. When utilizing this strategy, we purchase securities with the idea of selling them within a relatively short time (typically a year or less). We do this in an attempt to take advantage of conditions that we believe will soon result in a price swing in the securities we purchase. A short-term purchase strategy poses risks should the anticipated price swing not materialize; we are then left with the option of having a long-term investment in a security that was designed to be a short-term purchase, or potentially taking a loss. In addition, this strategy involves more frequent trading than does a longer-term strategy and will result in increased brokerage and other transaction-related costs, as well as less favorable tax treatment of short-term capital gains. 15  Stop-loss Orders: MSR employs the use of stop-loss orders on certain stocks in each client portfolio in an effort to mitigate significant losses. These stop-loss orders are placed on shares of companies the firm believes would do poorly in difficult economic conditions. Though stop-loss orders can be effective in a market falling at a normal pace, they can pose a risk if markets or individual stocks fall dramatically within a very short period of time. Once a stop-loss order is executed a market order is sent to the exchange to sell the shares at the current market price. The actual sale price, in a fast- moving market, may be less or more than the stop loss order price. To mitigate this risk MSR places stop loss orders on economically sensitive company shares and often on a portion of a client’s shares. Additionally, if employing such strategy would create capital gains tax consequences, clients may direct MSR not to employ the use of stop loss orders. Asset Allocation: In implementing our clients’ investment strategy, we begin by attempting to identify an appropriate ratio of equities, fixed income, and cash (i.e., “asset allocation”) suitable to the client’s investment goals and risk tolerance. A risk of asset allocation is that the client may not participate in sharp increases in a particular security, industry, or market sector. Another risk is that the ratio of securities, fixed income, and cash will change over time due to stock and market movements and, if not corrected, will no longer be appropriate for the client’s goals. Margin: As deemed appropriate, MSR will recommend ,that a client establish a margin account with the client’s custodian to facilitate participation in investment strategies described below. Selling Stock Short: MSR employs the strategy of selling stocks short only in cases when the firm believes that a market is likely to decline over a longer time frame. The risk of selling stock short occurs when markets begin to recover, and the short positions lose value. Due to this risk MSR usually places stop-loss orders on their short positions. Selling stock short is rarely used by MSR. Selling short requires use of margin. Concentrated Stocks Option Strategies: The option strategy is based upon an option overlay evaluation, trading and execution techniques developed or licensed by the subadvisor, SpiderRock Advisors and identified and monitored by MSR. SpiderRock Advisors will evaluate the liquidity of the option market for the underlying concentrated stock position in consultation with client and MSR. Subadvisor will continually monitor all option positions and will look to manage the continued rolling forward of positions at maturity or by sale and repurchase of new positions prior to option maturities, and relies on its evaluation system using it’s internally developed rules and quantitative analysis to determine when to sell calls and/or purchase puts. Client accounts enrolled in this strategy will typically include:  Holding concentrated stock position  Sale of Call Options (attempt to generate short term capital gains) against concentrated 16  equity position or substitute security or index. Calls may be repurchased prior to maturity or be allowed to expire at maturity.  Purchase of Protective Put Options – usually laddered over several expiration dates (attempt to create the limited downside protection) against concentrated equity positions or substitute security or index. Puts may be repurchased prior to maturity or be allowed to expire at maturity.  Strategic selling of client concentrated stock position (if elected). The Strategy may not be able to be deployed in the same manner in either an IRA or a non-IRA account. However, the Strategy does use options and options can be used to create ‘implied leverage.’ Implied leverage is when you use an option to control more shares than you could control just buying the underlying security. The collar does not use options to create implied leverage. A margin account is required to trade options. Subadvisor is responsible for the placing of all purchase and sale orders in the Client’s segregated account and providing instructions concerning the delivery of cash or securities for the settlement of option trades. Client should consult with their tax advisor to address the income tax consequences of options trading strategies. Tax Deferral Strategies: The Direct Equity Active Long Short (“DEALS”) strategy employed by Quantinno, the subadvisor, uses quantitative models and tools to incorporate personalized specifications for these investment strategies including the magnitude of tax loss harvesting, diversification goals, choice of benchmark, and choice of funding method. The subadvisor takes active long and short equity positions based on the subadvisor’s internally developed quantitative return forecasting models and systematic investment processes. A margin account is required to implement DEALS. The subadvisor implements an ongoing system of harvesting tax losses while deferring gains. GENERAL RISKS Risk of Loss. Securities investments are not guaranteed, and you may lose some or all of your money on your investments. Such investments are subject to investment-specific price fluctuations as well as to macro-economic, market and industry-specific conditions, including, but not limited to, national and international economic conditions, domestic and international financial policies and performance, conditions affecting particular investments such as the financial viability, sales and product lines of corporate issues, national and international politics and government events, and changes in income tax laws. In addition, MSR’s ability to vary their investments portfolios in response to changing economic, financial, and investment conditions may be limited. All investors should be prepared to bear these risks. No guarantee or representation is made that investments will be successful, and investment results may vary substantially over time. Past results are not necessarily indicative of future performance. We ask that you work with us to help us understand your tolerance for risk. 17  Reliance on MSR. MSR will make decisions with respect to the management and disposition of any managed assets. Clients will also not have the opportunity to evaluate personally the relevant economic, financial, and other information which will be utilized by MSR in its selection, monitoring, and disposition of investments of the managed assets. In addition, clients may not receive financial information which may be available to MSR. Consequently, the success of the investment strategies will depend substantially on the skill and expertise of MSR in selecting investments for clients. Cybersecurity Risk. MSR and its service providers on whom it relies depend on complex information technology and communications systems to conduct business functions. These systems are subject to a number of different threats or risks that could adversely affect clients and their managed assets, despite the effort MSR and its service providers adopt in technologies, processes, and practices intended to mitigate these risks and protect the security of their computer systems, software, networks, and other technology assets, as well the confidentiality, integrity, and availability of information belonging to the clients and/or their investors. For example, unauthorized third parties may attempt to access, modify, disrupt the operations of or prevent access to these systems of MSR and/or its service providers on whom MSR relies for data within these systems. Third parties may also attempt to fraudulently induce employees, customers, third- party service providers, or other users of systems to disclose sensitive information and gain access to MSR’s data or that of its clients. A successful penetration of the security of MSR’s systems or its service providers on whom MSR relies on could result in the loss or theft of a client’s data or funds, the inability to access electronic systems, loss or theft of proprietary information or corporate data, physical damage to a computer or network system or costs associated with system repairs. Such an incidence could cause MSR or its service providers on whom it relies on to incur regulatory penalties, reputational damage additional compliance costs, or financial loss. Business Continuity Risk. MSR has adopted a business continuation strategy to maintain critical functions in the event of a partial or total building outage affecting our offices or a technical problem affecting applications, data centers, or networks. The recovery strategies are designed to limit the impact on clients from any business interruption or disaster. Nevertheless, our ability to conduct business can be curtailed by a disruption in the infrastructure that supports our operations. Public Health Risk. MSR could be materially adversely affected by the widespread outbreak of infectious disease or other public health crises, including the COVID-19 pandemic. Public health crises such as the COVID-19 pandemic, together with any containment or other remedial measures undertaken or imposed, could cause significant interruptions in the operations of MSR. Market Disruptions; Governmental Intervention. In the recent past, the global financial markets have gone through fundamental disruptions that have led to extensive and unprecedented governmental intervention. These interventions have in certain cases been implemented on an emergency basis, suddenly and substantially eliminating market participants’ ability to 18  implement certain strategies or manage the risk of their outstanding positions. In addition, these interventions have typically been unclear in scope and application, resulting in confusion and uncertainty, which has been detrimental to the efficient functioning of the markets as well as previously successful investment strategies. Managed assets may incur major losses in the event of disrupted markets and other extraordinary events which could negatively affect underlying investment exit strategies. Equity Risks. Investments in public or private companies or in exchange-traded funds that expose investors to the equity markets are subject to a risk of significant capital loss due to the unpredictable nature of corporate earnings and the uncertainty of capital markets in general. Fixed income Risks. Investments in bonds, credit, and other types of fixed income-like securities are subject to a variety of risks including credit risk or the risk of default of the issuer, interest rate risk or the risk of a decline in value due to changes in interest rates, and reinvestment risk or the risk that proceeds from a fixed income security will be reinvested later at lower interest rates. Inflation Risks. Certain investments are subject to the risk that the purchasing power of an investor’s assets will be reduced over time due to inflation. Foreign Country Risk. Certain investments are subject to a risk associated with investing in securities issued by entities or corporations outside the United States. Foreign issuers are subject to a host of geopolitical, economic, and currency uncertainties which make those securities inherently risky. Environmental, Social and Governance (“ESG”) Investing Risk. Upon client request, MSR considers ESG factors when managing client assets. Such assets could underperform similar strategies that do not take into account ESG factors. Specifically, the use of ESG factors could result in selling or avoiding investments that subsequently perform well or making investments that substantially underperform. Exchange-Traded Funds (“ETF”) Risks. Investing in an ETF exposes an investor to all of the risks that ETF’s investments and subjects it to a pro-rate (d) portion of that ETF’s fees and expenses. As a result, the cost of investing in ETF shares may exceed the costs of investing directly in its underlying investments. ETF shares trade on an exchange at a market price that may vary from the ETF’s net asset value. ETF’s may be purchased at prices that exceed the net asset value of their underlying investments and may be sold at prices below such net asset value. Because the market price of ETF shares depends on the demand in the market for them, the market price of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track, and an investor may not be able to liquidate ETF holdings at the time and price desired, which may impact the investment performance. 19  Counterparty Risk. The Firm and/or its Clients may be subject to credit risk with respect to the counterparties to instruments entered into directly by the Clients or held by the Clients’ underlying investments. The Funds will also be subject to the risk that a counterparty may become unwilling or unable to meet its obligations prior to settlement. The Clients may also be exposed to the credit risk of counterparties through a wide range of activities that occur in the normal course of the activities of the Clients, including through service providers, banks, brokers, insurance providers, trading counterparties, co-investors, portfolio companies, prospective portfolio companies, or other entities that the Clients will have financial exposure to. If a counterparty becomes bankrupt or otherwise fails to perform its obligations under a contract due to financial difficulties, the Clients may experience significant delays in obtaining any recovery under the contract in a bankruptcy or other reorganization proceeding. The Clients may obtain only a limited recovery or may obtain no recovery in such circumstances. The Firm is not restricted from dealing with any particular counterparty or from concentrating any or all of its transactions with a single counterparty. The ability of the Firm to transact business with any one or number of counterparties, the lack of any independent evaluation of such counterparties’ financial capabilities, and the absence of a regulated market to facilitate settlement may increase the potential for losses by the Clients, especially during unusually adverse market conditions. Custody Risk. The Firm is required to maintain certain Client assets at a qualified custodian. Clients may incur a loss on securities and funds held in custody in the event of a custodian’s or sub- custodian’s insolvency, negligence, fraud, poor administration, or inadequate recordkeeping. Custodial assets maintained at a bank do not typically become part of a failed bank’s estate; however, the Firm’s operations could be impacted by the bank’s insolvency in that there may be a delay in trade settlement, delivery of securities, or other similar circumstance. Establishing multiple custodial relationships could mitigate custodial risk in the event of a bank failure. Bank Deposits Risk. Deposits maintained at a Federal Deposit Insurance Corporation (“FDIC”) insured bank are covered up to $250,000 per depositor, per insured bank, for each account ownership category, in the event of a bank failure. Any deposits over $250,000 in cash at a single bank may be lost in the event that the bank fails. Further diversifying banking relationships could serve to minimize the potential uncertainty and destabilizing effect on the Firm’s operations due to concern regarding the financial viability of a single banking institution. In addition, valuation of companies may experience significant price declines, volatility, and liquidity concerns as a result of short- and long-term financing to continue operations at normal levels. Concentrated Stocks Option Strategies Risk Factors: In an attempt to manage the risk of options trades, Subadvisor employs quantitative probability analysis based upon market volatility information or other options investment techniques. Normally, call options sold will be at various "out of the money" (above current price of security) execution or strike prices and different maturities ranging from three to six to nine months. The sale of call options against the underlying stock position generates premium income. This 20  strategy, however, effectively caps the upside market appreciation of the stock position if its price rises above the option strike price before option maturity. Client understands and acknowledges that this strategy may result in reduced or limited participation in future appreciation of the concentrated stock position. Client also acknowledges and understands that call options will be assigned, meaning part or all of their underlying stock positions could be sold to generate cash to settle options at maturity resulting in the realization of taxable gains. Client also understands that American-style options can be exercised early, requiring the client to sell the specified number of shares of the underlying stock to the buyer of the call option at the time of the exercise. While Advisor or Subadvisor will attempt to manage all options positions to enhance portfolio returns and protect against assignment and the realization of taxable gains and will also attempt to purchase shares for short settlement as described above in the event of assignment, Client acknowledges their understanding that no assurances can be made that such taxable gains will not occur. With respect to certain Client accounts, it can become necessary to sell a portion of the underlying stock positions to satisfy expected tax liability, post margin or purchase additional options. The Collar approach will purchase put options on an ongoing basis with the goal of providing partial protection based upon the risk, cost, and duration criteria to be determined upon the implementation of the strategy by the Client and as such can be adjusted going forward. The Collar will attempt to balance the call option premium over time versus put option expense. Client understands and acknowledges that the relationship between price movements of securities and various put and call options on the same security can vary greatly and that no assurances are made that the perceived protection to be provided when a put option is purchased will actually result. In addition, declines in portfolio values can result even when the stock price is stable or rising due to the decline of option values as they decay in value as they approach maturity. Maintaining the desired level of protection through time will require an occasional rebalancing of the option positions. Depending on client’s access to margin account, option trading level permissions and extreme market conditions, rebalancing transactions can cause the client to temporarily deviate from the target level of protection. The decision to engage in the Collar Strategy permits Subadvisor to purchase Put options. The Collar approach will not always purchase put options on an ongoing basis but selectively with the goal of providing partial protection based upon the risk, cost, and duration criteria to be determined upon the implementation of the strategy and as such will be adjusted going forward. The goal of the Collar is to provide selective, partial protection against large declines in value of the underlying security while attempting to provide a positive net income of call option premium overtime versus put option expense. A Collar strategy involves applying the income generated through the sale of call options to pay for the desired level of put protection. Client understands and acknowledges that 21  the relationship between price movements of securities and various put and call options on the same security can vary greatly and that no assurances can be made that the perceived protection to be provided when a put option is purchased will actually result. Put options are often more expensive than comparable call options. As a result, the sale of call options (risking the loss of part of or all of potential price appreciation of the security) to generate premium income often does not result in enough income to pay for the put protection on the entire stock position. In addition, declines in portfolio values can result even when the stock price is stable or rising due to the decline of option values as they decay in value as they approach maturity. Options change the risk profile of the portfolio. The sale of Call options may effectively cap the total upside of the Stock position, entail possible loss of principal in a rising market and can offset gains in the long Stock position. The purchase of Puts entails an expense and can be a drag on portfolio returns. Tax Deferral Strategies Risk Factors: Algorithmic active trading presents the risk of large, immediate losses. Automated trading systems, no matter how convenient or efficient, do not reduce risks associated with active trading. There can be no guarantee that the software and automated trading systems will achieve their intended objectives. The subadvisor can invest a portion of clients’ assets in the securities of companies with small-to- medium- sized capitalizations. These securities, particularly those of smaller-capitalization companies, involve higher risks in some respects than do investments in securities of larger companies. The subadvisor engages in short selling on behalf of clients. Short selling transactions expose the clients to the risk of loss in an amount greater than the initial investment, and such losses can increase rapidly and without effective limit. There is the risk that the securities borrowed by the clients in connection with a short sale would need to be returned to the securities lender on short notice. If such request for return of securities occurs at a time when other short sellers of the subject security are receiving similar requests, a “short squeeze” can occur, wherein the clients might be compelled, at the most disadvantageous time, to replace the borrowed securities previously sold short with purchases on the open market, possibly at prices significantly in excess of the proceeds received earlier. While the strategy seeks to improve after-tax outcomes, there is no guarantee tax-loss harvesting will be successful. Unwinding the strategy may result in capital gains therefore the client could be incentivized to remain in the strategy. Tax results will vary based on individual client circumstances and changes in tax laws, regulations, or interpretations. 22  Item 9. Disciplinary Information We are required to disclose any legal or disciplinary events that are material to a client's or prospective client's evaluation of our advisory business or the integrity of our management. Our firm and our management personnel have no reportable disciplinary events to disclose. Item 10. Other Financial Industry Activities and Affiliations Please refer to Item 5 and Item 14 for additional information on other Financial Industry Activities and Affiliations. Item 11. Code of Ethics, Participation in Client Transactions and Personal Trading CODE OF ETHICS Our firm has adopted a Code of Ethics which sets forth high ethical standards of business conduct that we require of our employees, including compliance with applicable federal securities laws. MSR and our personnel owe a duty of loyalty, fairness, and good faith to our clients, and have an obligation to adhere not only to the specific provisions of the Code of Ethics but to the general principles that guide the Code. MSR’s Code of Ethics includes the firm's policy prohibiting the use of material non-public information. While we do not believe that we have any particular access to non-public information, all employees are reminded that such information may not be used in a personal or professional capacity. Our Code of Ethics requires that anyone associated with this advisory practice with access to advisory recommendations, client holdings, or other specified information (“access persons”) provide annual securities holdings reports and quarterly transaction reports of all reportable transactions to the firm's designated officer. These reports are made available to an appropriate regulatory agency upon request and will be reviewed on a regular basis by the Chief Compliance Officer (“CCO”) of MSR, or their designee, to supervise compliance with the firm's Code of Ethics. Our Code also contains oversight, enforcement, and recordkeeping provisions. A copy of our Code of Ethics is available to our advisory clients and prospective clients. You may request a copy by email to team@ms-research.com , or by telephone at (415) 289-1010. 23  SUMMARY OF PERSONAL TRADING POLICY Our firm and the individuals associated with our firm could buy or sell securities for their personal accounts that are identical to or different from those recommended to our clients. In addition, the firm and these individuals could have an interest or position in a security which may also be recommended to a client. As all these situations represent actual or potential conflicts of interest with our clients, we have taken the following steps to assure that (i) the personal securities transactions of our employees will not interfere with making and implementing decisions in the best interest of our advisory clients, (ii) our firm complies with its regulatory obligations, and (iii) we provide our clients with full and fair disclosure of such conflicts of interest: 1. Prohibiting the firm, its partners, and employees from: a. Putting their own interest above the interest of an advisory client; b. Buying or selling securities for their personal portfolio(s) where their decision is a result of information received as a result of his or her employment unless the information is also available to the investing public. c. Purchasing or selling any security in their personal portfolio(s) 3- calendar days prior to or 3-calendar days after (“blackout period”) a transaction(s) in the same securities being implemented for an advisory client unless the personal trade falls within MSR’s “de minimis” exemption. Trades covered by the “de minimis” exemption are still subject to all other requirements of MSR’s Code of Ethics and may apply only if the following requirements apply: 1) The transaction or aggregated transactions must be for the purchase or sale of 5,000 shares or less every 30 days; 2) The issuer of the securities must have a market capitalization of at least $1 billion; and 3) The transaction must be free from any actual and/or apparent conflicts of interest. If the transaction does not meet the “de minimus” exemption, the black-out period described above will apply and employees must obtain pre- approval from the CCO or their designee. Pre-approval requests in a security that has been purchased or sold in a client account during the blackout period, or that is listed on MSR’s “watch list,” will be denied. After a request for preclearance is approved, the compliance designee will cross-reference the employee’s trading against client portfolio trades for 3-calendar days. If there is a trade in a client account in the same security during that 3-day timeframe, the CCO will investigate and may require the employee to submit a written explanation of the circumstances surrounding the transaction. If the CCO is not satisfied that the employee affected his or her trade without knowledge of the impending managed portfolio transaction, the employee may be required to submit a trade to reverse the transaction, forfeit any resulting gains, and absorb any resulting financial and/or tax consequences based on the investigation and decision of the CCO. The blackout policy shall not apply to any trades triggered by stop-loss orders originally placed outside the blackout period. 24  2. Our firm requires prior approval from our CCO for investment by our partners and employees in an initial public offering (IPO), a private placement, and certain publicly traded securities. 3. We maintain a list of all reportable securities holdings for our firm, our partners, and our employees who are access persons. These holdings are reviewed on a quarterly basis by our firm's CCO, or their designee, to verify compliance with this personal trading policy. 4. We have established procedures for the maintenance of all required books and records. 5. We require our partners and employees to act in accordance with all applicable Federal and State regulations governing registered investment advisory practices. 6. We provide a copy of the Code of Ethics on an annual basis to the partners and employees of our firm. Each employee acknowledges the Code in writing and agrees to be bound by it. 7. We have established policies requiring the reporting of Code of Ethics violations to our CCO. 8. Any individual who violates any of the above restrictions is subject to penalties, up to and including termination. PRINCIPAL TRANSACTIONS MSR and individuals associated with our firm are prohibited from engaging in principal transactions. A principal transaction is a transaction where MSR or a person associated with MSR, as principal, buys securities from, or sells securities to, an MSR client. Item 12. Brokerage Practices BROKERAGE DISCRETION MSR typically uses the brokerage and platform services of Schwab Institutional, a division of Charles Schwab & Co., Inc. ("Schwab"), or U.S. Bancorp Investments, Inc. (US Bank)), for its advisory accounts. Both Schwab and US Bank are FINRA-member broker-dealers and SIPC members. Schwab and US Bank provide MSR with access to their institutional trading and custody services. MSR is independently owned and operated and not affiliated with Schwab or US Bank. Schwab or US Bank will hold your assets in a brokerage account and buy and sell securities when we instruct them to. While we require that you use Schwab or US Bank as custodian/broker you will be entering into an account agreement directly with them. Although we are not required to execute all trades through Schwab, we have determined that having Schwab execute most trades is consistent with our duty to seek “best execution” of your trades. Best execution means the most favorable terms for a transaction based on all relevant factors and not necessarily the lowest price available as takes qualitative factors into consideration as well. By using another broker or dealer, you may pay lower transaction costs. Schwab and US Bank are compensated on uninvested cash 25  through cash sweep programs that will pay clients a nominal rate which may be significantly lower than the federal funds rate. These platform services are not contingent upon our firm committing to Schwab or US Bank any specific amount of business (assets in custody or trading commissions). Schwab’s and US Bank’s brokerage services include the execution of securities transactions, custody, research, and access to mutual funds and other investments that are otherwise generally available only to institutional investors or would require a significantly higher minimum initial investment. Through Schwab’s referral program, MSR receives access to Schwab Advisor Services, an institutional support team at no additional cost to MSR or the client. The receipt of support services gives MSR an incentive to recommend that its clients’ accounts be held at Schwab. MSR recognizes this potential conflict of interest but believes its clients’ interests are well-served with custody and brokerage services provided by Schwab. For our client accounts maintained in their custody, Schwab and US Bank generally do not charge separately for custody services and as of October 2019 ceased from being compensated commissions by account holders on equity trades. Other transaction-related fees exist for securities trades that are executed through Schwab or US Bank or that settle into the accounts. Schwab and US Bank also make available other products and services that benefit MSR but may not directly benefit our clients’ accounts. Many of these products and services may be used to service all or some substantial number of our client accounts, including accounts not maintained at Schwab or US Bank. These products and services that assist us in managing and administering our clients’ accounts include software and other technology that: facilitate payment of our fees from clients’ accounts; and - provide access to client account data (such as trade confirmations and account statements); - facilitate trade execution and allocate aggregated trade orders for multiple client accounts; - provide research, pricing, and other market data; - - assist with back-office functions, recordkeeping, and client reporting. Schwab and US Bank also offer other services intended to help us manage and further develop our business enterprise. These services may include: compliance, legal and business consulting; - educational conferences, and events; - - publications and conferences on practice management and business succession; and - access to employee benefits providers, human capital consultants and insurance providers. Schwab and US Bank will also make available, arrange and/or pay third-party vendors for the types of services rendered to MSR. Schwab and US Bank may discount or waive fees it would otherwise charge for some of these services or pay all or a part of the fees of a third-party providing these services to our firm. 26  We have no formal or informal soft dollar arrangements with Schwab or any other broker-dealer. Neither Schwab nor US Bank provides us with any specific proprietary research or other specialized services other than what is otherwise made available by them to the other investment advisers that use their platform services. We receive client referrals from Schwab through our participation in the Schwab Advisor Network (“the Service”). The Service is designed to help investors find an independent investment adviser. As mentioned above, Schwab is a FINRA-member broker-dealer independent of and unaffiliated with MSR. Schwab does not supervise MSR and has no responsibility for MSR’s management of client portfolios or other advice or services. MSR pays Schwab fees to receive client referrals through the Service. MSR pays Schwab a “Participation Fee” on all referred clients’ accounts that are maintained in custody at Schwab and a “Non-Schwab Custody Fee” on all accounts that are maintained at, or transferred to, another custodian. The Participation Fee paid by MSR is a percentage of the advisory fees the client owes to MSR or a percentage of the value of the assets in the client’s account, subject to a minimum Participation Fee. MSR pays Schwab the Participation Fee for as long as the referred client’s account remains in custody at Schwab. The Participation Fee is billed to MSR quarterly and may be increased, decreased, or waived by Schwab from time to time. The Participation Fee is paid by MSR and not by the client. MSR has agreed not to charge clients referred through the Service, fees or costs greater than the fees or costs MSR charges clients with similar portfolios who were not referred through the Service. MSR generally pays Schwab a Non-Schwab Custody Fee if custody of a referred client’s account is not maintained by, or assets in the account are transferred from, Schwab. This fee does not apply if the client was solely responsible for the decision not to maintain custody at Schwab. The Non-Schwab Custody Fee is a one-time payment equal to a percentage of the assets placed with a custodian other than Schwab. The Non-Schwab Custody Fee is higher than the Participation Fees MSR generally would pay in a single year. Thus, MSR will have an incentive to recommend that client accounts be held in custody at Schwab. The Participation and Non-Schwab Custody Fees will be based on assets in accounts of MSR’s clients who were referred by Schwab and those referred clients’ family members living in the same household. Thus, MSR will have incentives to encourage household members of clients referred through the Service to maintain custody of their accounts and execute transactions at Schwab and to instruct Schwab to debit MSR’s fees directly from the accounts for ease of managing all clients utilizing the tools available to clients custodied with Schwab thereby MSR considers to be a benefit to its clients. 27  SUMMARY OF TRADE AGGREGATION POLICY MSR will aggregate (i.e., block) trades where possible and when advantageous to clients. This blocking of trades permits the trading of aggregate blocks of securities composed of assets from multiple client accounts. Block trading allows us to execute equity trades in a timelier, more equitable manner, at an average share price. MSR will typically aggregate trades among clients whose accounts can be traded at a given broker. MSR’s block trading policy and procedures are as follows: 1. Trades may be aggregated where it is more timely, efficient, and equitable to those clients participating in a trade in the same security. 2. Transactions for any client account may not be aggregated for execution if the practice is prohibited by or inconsistent with the client's advisory agreement with MSR, or our firm's order allocation policy. 3. The portfolio manager must determine that the purchase or sale of the particular security involved is appropriate for the client and consistent with the client's investment objectives and with any investment guidelines or restrictions applicable to the client's account. 4. The portfolio manager must reasonably believe that the order aggregation will enable MSR to seek best execution for each client participating in the aggregated order. This requires a good faith judgment at the time the order is placed for execution. It does not mean that the determination made in advance of the transaction must always prove to have been correct in the light of a "20-20 hindsight" perspective. Best execution includes the duty to seek the best quality of execution, as well as the best net price. 5. Aggregated (block) trades are sent as market orders (not limit orders) and are always filled regardless of price. However, adjustments to the allocations are made due to tax considerations, to avoid having fractional shares held in any client account, or to avoid excessive ticket charges in smaller accounts. 6. In determining allocations for smaller accounts or accounts with small initial allocation, the firm employs a de minimus exception. This exception serves to allow smaller accounts to receive their entire allocation before larger accounts are given their pro-rata amount, in order to minimize the transaction costs involved with a series of small allocations. 7. In cases where the final pricing on an aggregated trade results in the overspending in a particular account, the firm’s policy is to sell overweight positions to bring the account in line, while covering the cash shortfall with the proceeds; if that is not possible, the firm will break the trade. 8. The firm trades utilizes a trade order management system to calculate the allocations and percentages. 9. Generally, each client that participates in the aggregated order must do so at the average price for all separate transactions made to fill the order. Each participating account has its own set commission costs based on its arrangement with its broker. Transaction costs may be charged as a fixed, per-trade fee or a fee based on the number of shares traded for each 28  individual client’s agreement with the applicable client (depending upon the custodian/broker). 10. In daily trading, a group of client trades is entered based on a position size determined by client assets and tactical weight. For example, a client with $1M assets under management (AUM) who is 80% stock will have $16,000 positions (based on 50 positions per portfolio). Once most or all of that day’s trades are entered, the “like” trades (same position, same broker) are merged together and sent to each respective broker as a block trade in our master account. Accounts are audited to ensure no negative balances and the pre-allocation file is created when the trades are merged. Where possible, we attempt to move the shares into another account owned by the same client. Once this audit is complete, the allocation file is sent to the broker to allocate. Trading in this manner ensures that all included clients receive the identical fill price per share. Fill price may vary among brokers. 11. In the rare event that MSR buys or sells a security that lacks sufficient volume to efficiently sell a block of stock at the current market price, block orders will be executed in phases and possibly over days in an effort to obtain the best pricing. This can result in segments of clients getting different pricing for securities. We use several methods to achieve the goal of best pricing in a manner that does not favor one client over another which may include: 1) random selection of accounts; 2) client tactical weighting considerations (i.e., group by client stock exposure requirements); 3) accounts taxable status; or 4) alphabetical order. 12. When the investment policy committee makes a decision to enter into a new position or exit from a position, we run an “allocation strategy.” We select a group of clients and either buy a percentage of their tactical weight in the new position (typically 2%, i.e. client has $1M and should be 80% stock, they should own $800,000 in stock, 2% of which is $16,000, again based on 50 stocks per portfolio) or sell a position or all (typically 50% or 100%) of the existing position. The “allocation strategy” feature automatically determines how many shares to buy or sell per client and “blocks” the trades for submission to the brokers. Once the trades are filled, we again audit for negatives or tax considerations, and once resolved, send the allocation files to the brokers. This procedure ensures that each included client receives the same fill price. Fill price may vary among brokers. 13. No client or account will be favored over another. TRADE ERROR POLICY MSR requires that its personnel carefully implement investment management decisions. Nevertheless, if a trade error occurs, it is MSR’s policy that the error be corrected as soon as possible and in such a manner that the affected client is not disadvantaged and bears no loss. MSR’s policy prohibits its staff from requesting a broker-dealer to accept financial responsibility for a trade error caused by MSR’s personnel in exchange for the promise of future compensation through commissions. 29  Item 13. Review of Accounts WEALTH MANAGEMENT Reviews: While the underlying securities within client accounts are continually monitored, these accounts are reviewed at least weekly by James E. Demmert, Managing Partner and CIO, and our investment policy committee. The committee consists of advisors, an analyst, and a financial specialist from the MSR team who evaluate and apply the latest financial research and develop the firm’s investment policies and guidelines for its clients. The committee meets regularly and discusses current news and market conditions that assist them in outlining potential risks and opportunities – all with our clients’ long-term needs as the focal point. Our client accounts are reviewed in the context of each client's stated investment objectives and guidelines. More frequent reviews are triggered by material changes in variables such as the client's individual circumstances, or the market, political or economic environment. Review of our client’s financial plans will typically occur on an annual basis or upon client request. Reports: In addition to the monthly statements and confirmations of transactions that clients receive from their broker-dealer/custodian, we provide quarterly reports summarizing account performance, balances, and holdings. Item 14. Client Referrals and Other Compensation It is our policy not to accept or allow our related persons to accept any form of compensation, including cash, sales awards, or other prizes, from a non-client in conjunction with the advisory services we provide to our clients. Please see Item 12 as it pertains to the SAN referral program. MSR occasionally receives potential new client referrals from its existing clients and offers a $250 economic benefit such as gift cards or other gesture of appreciation for a client referral resulting in a new client relationship. Item 15. Custody All clients’ accounts are held in custody by unaffiliated broker/dealers, but MSR can access many client accounts through its ability to debit advisory fees. For this reason, MSR is considered to have constructive custody of client assets. As part of this billing process, the client's custodian is advised of the amount of the fee to be deducted from that client's account. On at least a quarterly basis, the custodian is required to send to the client a statement showing all transactions within the 30  account during the reporting period. Clients are encouraged to compare those statements to any account information or quarterly reports provided by MSR. MSR is deemed to have constructive custody of client assets because we accept Standing Letters of Authorization from our clients which allows us to facilitate the transfer of funds to third parties identified by our clients. At all times we intend to comply with the SEC’s No-Action Letter Dated 02/21/2017 which provides exemptive relief from the surprise audit requirements of the SEC’s Custody Rule. Item 16. Investment Discretion Clients hire us to provide discretionary portfolio management services. We place trades in a client’s account without obtaining specific client permission prior to each trade. Our discretionary authority includes the ability to do the following without contacting the client: - Determine the security to buy or sell; and/or - Determine the amount of the security to buy or sell. Clients give us discretionary authority when they sign a discretionary advisory agreement with our firm and may limit this authority by giving us written or verbal instructions. Clients may also change/amend such limitations by once again providing us with written instructions. Item 17. Voting Client Securities MSR has assumed responsibility for voting proxies on behalf of clients granted pursuant to its wealth management agreement with the client. And in relation to assets sub-advised by SpiderRock Advisors, MSR has delegated its authority to the subadvisor to vote proxies for securities it sub-advises using an options focused proxy voting strategy. Alternatively, clients have the option to choose to receive, and vote proxies related to their own accounts. In these circumstances, we will consult with clients regarding the proxy vote upon request. With respect to ERISA accounts, we will vote proxies unless the plan documents specifically reserve the plan sponsor’s right to vote proxies. To direct us to vote a proxy in a particular manner, clients should contact our office by telephone, electronic mail, or in writing. Absent specific client instructions, MSR generally votes in line with third-party proxy research provided by Institutional Shareholder Services Inc. (ISS). MSR has contracted with ISS to support the firm’s proxy management needs and has engaged ISS’ end-to-end proxy voting services which include ISS’ proxy voting guidelines (standard market-based and Benchmark guidelines). MSR has the responsibility for oversight of the third-party service provider and for ensuring that proxies are voted in the best interest of clients. When we have the discretion to vote proxies for our clients, 31  we or the third party will vote those proxies in the best interests of our clients and in accordance with our established policies and procedures now based on ISS’ proxy voting guidelines. However, if MSR does not agree with a recommended vote by ISS the firm may instruct ISS to vote otherwise and in the best interest of the client. Our firm will retain all proxy voting books and records for the requisite period of time, including a copy of each proxy statement received, a record of each vote cast, a copy of any document created by us that was material to making a decision on how to vote proxies, and a copy of each written client request for information on how the adviser voted proxies. Prior to voting, MSR or the third-party service provider verifies whether an actual or potential conflict of interest with MSR exists in connection with the subject proposal(s) to be voted upon. The determination regarding the presence or absence of any actual or potential conflict of interest is documented. If our firm has a conflict of interest in voting a particular action, we will notify clients of the conflict and obtain client consent before voting the proxy. Clients may obtain a copy of our complete proxy voting policies and procedures by contacting our office directly. Clients may request, in writing, information on how proxies for his/her shares were voted. If any client requests a copy of our complete proxy policies and procedures or how we voted proxies for his/her account(s), we will promptly provide such information to the client. MSR has retained third-party Class Action Service Provider (SP), Eleventh, to assist clients in the recovery of claims from class action securities lawsuits. This SP charges a 20% contingency fee which is deducted from any settlement before proceeds are distributed to clients. The SP will review available historical client records and make filings for open cases. Clients are automatically included in this service but may Opt-Out by providing written notice to MSR. If a client prefers to Opt-Out, MSR and the SP will not monitor class action filings for that client. Item 18. Financial Information Under no circumstances do we require or solicit payment of fees in excess of $1,200 per client more than six months in advance of services rendered. Therefore, we are not required to include a financial statement. As an advisory firm that maintains discretionary authority for client accounts, we are also required to disclose any financial condition that is reasonably likely to impair our ability to meet our contractual obligations. MSR has no additional financial circumstances to report and has never been the subject of a bankruptcy petition. 32