Part 2 of form ADV: Firm Brochure
Puentes Mayorga Advisers S.A.S. (PMAdvisers)
Bogotá, Colombia
www.pmadvisers.net
January 2021.
This Brochure provides information about the qualifications and business practices of PMAdvisers. If you have any questions about the contents of this Brochure, please contact us at +573144024738 or email [email protected]. The information in this Brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority. PMAdvisers is a registered investment adviser. Registration of an Investment Adviser does not imply any level of skill or training. The oral and written communications of an Adviser provide you with information about which you determine to hire or retain an Adviser.
Additional information about PMAdvisers also is available on the SEC’s website at www.adviserinfo.sec.gov.
Item 2: Summary of Material Changes
This is the fourth year we submit the ADV2 form. We are managing USD 300.000 from 2 clients.
Item 3 -Table of Contents
Item 1 – Cover Page
Item 2 – Material Changes
Item 3 -Table of Contents
Item 4 – Advisory Business
Item 5 – Fees and Compensation
Item 6 – Performance-Based Fees and Side-By-Side Management
Item 7 – Types of Clients
Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss
Item 9 – Disciplinary Information
Item 10 – Other Financial Industry Activities and Affiliations
Item 11 – Code of Ethics
Item 12 – Brokerage Practices
Item 13 – Review of Accounts
Item 14 – Client Referrals and Other Compensation
Item 15 – Custody
Item 16 – Investment Discretion
Item 17 – Voting Client Securities
18 – Financial Information
Brochure Supplement for Rigoberto Puentes-Part 2B form ADV
Brochure Supplement for Pablo Puentes-Part 2B form ADV
Item 4 – Advisory Business
PMAdvisers was founded in 2007 as a Financial Planning and Investment Advisory firm. We provide financial education and seminars to companies and individuals alike, we’re not affiliated with any broker, bank or other company. Our goal is to have our investment advisory clients understand what they’re investing in and make the appropriate decisions.
We, alongside with the client, establish a personal financial plan, determining objectives, risk, strategy and plan of action, so that we can determine which kind of portfolio or strategy is suitable for the client.
We provide active and passive portfolio management strategies, also investment supervisory services to a broad range of investors, both institutional (retirement plans, foundations, endowments, companies) and individuals, on a discretionary and non-discretionary basis.
We do not participate in wrap fee programs.
PMAdvisers is owned by Rigoberto Alonso Puentes and Pablo Andrés Puentes.
At the time of this brochure, we have USD 300.000 in assets under management.
Item 5 – Fees and Compensation
PMAdvisers is compensated with a flat fee normally based on Assets under management.
The schedule is:
Amount Percentage annually. <100.000 3% USD 100.000 - 250.000 2% USD 250.000 - 1.000.000 1,75% USD 1.000.000 - 5.000.000 1.5% USD 5.000.000 - 10.000.000 1% > USD 10.000.000 Negotiable
PMAdvisers fees are exclusive of brokerage commissions, transaction fees, and other related costs and expenses that can be charged by the custodian which shall be incurred by the client. Mutual funds and exchange traded funds also charge internal management fees, which are disclosed in a fund’s prospectus. Such charges, fees and commissions are exclusive of and in addition to PMAdvisers fee, and PMAdvisers does not receive any portion of these commissions or other charges. Fees for retirement plans may be different depending on the level of assets in the plan, number of participants, number of physical locations, and structure of our investment management responsibilities and servicing. Client fees are generally deducted directly from client accounts on a quarterly basis. Clients do have the option to pay their investment advisory fees by check. Most accounts pay a minimum fee of $1,000; however, accounts may be accepted for less than the suggested minimum. Refunds upon termination of the contract are made pro rata based upon time remaining in the quarter for which payment has been received. Contracts may be terminated by either party upon written notice.
Financial planning services as well as advice and counsel for specific advice issues not involving an ongoing relationship will be billed at the hourly rate of $100 payable when the service is rendered.
Speaking fees will be billed also by an hourly rate of $500.
All fees are subject to negotiation.
Item 6 – Performance-Based Fees
At PMAdvisers we charge a performance based fee to some qualified investors and only when utilizing active management strategies, mostly with derivatives or when compared with a pre- established benchmark.
The performance based fee is a maximum of 25% of the capital gains or appreciation of assets. Each client that decides to adopt an aggressive investment strategy will be doing so according to his/her risk investor profile and will have to sign accordingly in the client advisory account agreement.
Item 7 – Types of Clients
PMAdvisers provides “investment supervisory services” to a broad range of investors, both institutional (retirement plans, foundations, endowments, companies) and individuals, on a discretionary and non-discretionary basis.
The broader basis of our clients is a non US citizen interested in investing in US markets.
Generally, an account minimum of $100,000.00 is required. However, this figure may be negotiable, depending upon the client’s objectives and the nature of the account and anticipated future contributions.
Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss
PMAdvisers offers both, a Passive Management Investment Strategy and Active Management Investment strategy, depending upon the customer’s risk profile and preferences.
Passive investing is a strategy focused on achieving long-term appreciation. Passive management is usually associated with mutual and exchange-traded funds (ETF) where the client’s portfolio mirrors a market index, such us S&P 500, Dow Jones, Nasdaq 100 or any other. There are thousands of indexes in the market to choose for. You can invest in indexes by region (Europe, Asia, Latin America, Australia, China, Emergent markets. etc.), by sector (technology, real estate, oil, precious metals, etc.), socially responsible indexes, and many other.
The risk and return of portfolios created following the indexes depend upon their performance. Historically most of them have grown, in the long term, but they can remain stable and even decrease during short to medium term periods.
Our service includes the establishment of the account with a Broker-Custodian and the creation and administration of your portfolio.
Active Management is the opposite of passive management. In this case we will use our ability to make short-term transactions that generate periodical returns. We specialize in transactions with financial options.
When working with Active Management Strategies, the return depends on us and on our ability to make your money produce gain, independently if the market climbs, drops or remains stable.
- Examples of passive and active portfolios.
Passive management.
I. CONSERVATIVE PORTFOLIO - LIQUIDITY 100%
Investor’s profile:
Designed for natural and / or legal persons with ultra-conservative risk profile, who wish to keep their short-term money in dollars.
Portfolio features:
• Market risk: low
• Account protected by the SIPC (Securities Investment Protection Corporation) for up to US $ 500,000 (Not protected against the intricacies of the market).
• Investment in funds made up of fixed income securities and liquidity
• Permanent availability of cash:
• Money in hard currency. Your money is kept in dollars, which allows you to diversify your savings and protect yourself against a possible devaluation of your currency. (Our main customer is international)
Simulation of a conservative portfolio - liquidity 100%:
The above is only one example of the thousands of Money Market funds available in the market.
II. BALANCED PORTFOLIO – STOCKS, BONDS AND CASH
Investor profile:
Portfolio designed for natural and / or legal persons with medium to high risk profile, who wish to grow their money in the long term. Investors are willing to keep their funds invested for medium to long term and to assume the risk of fluctuations in the price of the stocks.
Portfolio features:
Market risk: Medium to high (depending on selected titles) Expected performance: Medium to high. Variable. Dependent on dividends and share price growth Account protected by the SIPC (Securities Investment Protection Corporation) for up to US $ 500,000 (Not protected against the intricacies of the market). Investment in different equity securities (stocks, funds, ETF). Hard currency money. Your money is kept in dollars, which allows you to diversify your savings and protect yourself against a possible devaluation of your currency.
Simulation of a balanced portfolio
Portfolio consisting of one or several market indexes (S&P 500, Dow Jones, Nasdaq 100, etc.), insured against market risk. We assumed that 1,000 SPY shares (ETF following the S & P 500 index) were acquired a year ago.
The above example shows a global portfolio for investors who want to diversify their funds between fixed income securities (40%) and equity securities (40%) and also is willing to diversify between currencies of different countries:
BND (20%) is an ETF that seeks the performance of Bloomberg Barclays U.S. Aggregate Float Adjusted Index, which represents a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States, including government, corporate, and international dollar denominated bonds, as well as mortgage-backed and asset-backed securities-all with maturities of more than 1 year.
BNDX (20%) is an income ETF that seeks to track the performance of a benchmark index that measures the investment return of non-U.S. dollar-denominated investment-grade bonds. This index provides a broad-based measure of the global, investment-grade, fixed-rate debt markets.
VT (20%) is an equity ETF that seeks to track the performance of a benchmark index that measures the investment return of stocks of companies located in developed and emerging markets around the world. The index included 7,707 stocks of companies located in 49 countries, including both developed and emerging markets.
SPY (20%) is an equity ETF that seeks to track the performance of the S&P 500 Index. The S&P 500 index is seen as a leading indicator of U.S. equities and a reflection of the performance of the large-cap universe. It is probably the most followed index in the world.
III. EQUITY ONLY PORTFOLIO
A strategy several investors follow, mainly when market is exuberant is to forget about balanced asset allocation and invest 100% of their portfolio in equities. The theory below this idea is that, in the long run, equities outperform bonds and cash. Therefore, allocating all the investable money to stocks will maximize the return. Supporting this strategy is also the believing that the best period to make money is the final stage of a bull market. The term used for that idea is the “Melt Up” period.
Investopedia.com makes the following definition for “Melt Up”: “A dramatic and unexpected improvement in the investment performance of an asset class driven partly by a stampede of investors who don't want to miss out on its rise rather than by fundamental improvements in the economy. Gains created by a melt up are considered an unreliable indication of the direction the market is ultimately headed, and melt ups often precede melt downs”.
The following table shows an example of an aggressive equity only portfolio. It is formed by five of the best performing tech stocks in the market. The group is known with the acronym FAANG.
IV. TAILOR-MADE PORTFOLIOS
At PMAdvisers we can assemble any kind of portfolio, designed for special clients. For this we have access to the largest offer of financial products in the world:
• Stocks of more than 5.000 of the main companies of the world
• More than 9.500 mutual funds
• Around 2.000 ETFs
• Thousands of fixed income instruments
• Millions of financial options
INSURANCE FOR EQUITY PORTFOLIOS
Nowadays it seems that we are in the middle of the “Melt Up” period of this bull market. Some experts think that it will take more force during the next months, reaching up to extraordinary highs. Even so, the reality is that after the Melt Up, it will come the Melt Down, and it can be tough. It can cause the prices of the shares to fall to unthinkable lows. That is why our recommendation for all investors that remain in the stock market is to ensure their portfolios against the possible market crash.
Active management
Our active investment strategy is based on a system of transactions with financial options that requires, for its implementation, the existence of a passive portfolio that serves as support for the schemes of options with which we work. This portfolio can be made up of fixed income, variable income or cash instruments.
Our commitment to investors seeking high returns through the active management of their portfolios is to generate profits (not guaranteed) regardless of whether the market grows, remains stable or decreases. We know that this is a difficult concept to assimilate for people who do not have knowledge of the capital markets; that is why we want to make it easier to understand, showing some of the transactions we are making, while these are still in process.
Risk of Loss: In choosing any advisory services through PMAdvisers, you should be aware that all investments are subject to risk, and you must understand that we do not guarantee any return on the investments recommended or advised upon. There is no guarantee that the advisory services provided by us will result in meeting your goals and objectives. Investing involves risks, including the risk of loss of principal, and investment decisions made for your account may be subject to numerous risks, such as market, interest rate, currency, economic, political and business risks, among others. Past performance is no guarantee of future results. Because of the inherent risk of loss associated with investing, we are unable to represent, guarantee, or even imply that our services, strategies and methods of analysis can or will predict future results, successfully identify market tops or bottoms, or insulate you from losses due to market corrections or declines.
Item 9: Disciplinary Information
PMAdvisers has not been involved in any material disciplinary events as an investment adviser, a financial planner or in any other way.
Item 10: Other Financial Industry Activities and Affiliations
PMAdvisers is not affiliated with any broker dealer/ Investment Advisers or any other professionals or companies.
Item 11: Code of Ethics
At PMAdvisers we have adopted the CFA code of ethics and standards of professional conduct. This is an international recognized code of ethics that is used across the financial industry.
- We shall act with integrity, competence, diligence, respect and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets.
- Place the integrity of the investment profession and the interests of clients above their own personal interests.
- Use reasonable care and exercise independent professional judgment when conducting investment analysis, making investment recommendations, taking investment actions, and engaging in other professional activities.
- Practice and encourage others to practice in a professional and ethical manner that will reflect credit on themselves and the profession.
- Promote the integrity and viability of the global capital markets for the ultimate benefit of society.
- Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.
An important part of our code is education of the client. We want the client to understand exactly what they’re investing on… not specifically the intricacies of transactions and markets, but the risk, possibilities, scenarios and rewards towards their investment.
In case of a conflict of interest, we make sure that the clients’ interests are always ahead of ours.
Item 12: Brokerage Practices
As most of our clients are international, we recommend the use of Charles Schwab as custodian. However, we are open to working with a custodian preferred by the client. PMAdvisers works only with brokers / custodians recognized as the most solid and reliable in the United States. All our portfolios are managed through qualified custodians, approved by the SEC and affiliated to the SIPC (Securities Investment Protection Corporation). We mainly use Charles Schwab because this is the one that adapts most to international investors.
Item 13: Review of Accounts
Monitoring Accounts and transactions are reviewed on a daily, monthly, quarterly or annual basis, as applicable, to review not only the broad allocation, but also adherence to any criteria and guidelines on security selection, concentration, diversification and certain restrictions that may apply. The Account portfolio review considers all Accounts in the portfolio and ensures adherence to Client instructions provided on the Client Profile Questionnaire.
Advisory Consultants also conduct periodic reviews of the Account with you to determine if and when rebalancing or reallocation is needed. Additionally, an Account review should be completed by your Advisory Consultant at least annually.
Item 14: Client Referrals and Other Compensation
PMAdvisers generally does not provide compensation for referrals to the Program. Exceptions may be made as approved by the Firm’s Compliance Department. In those limited instances, Clients will receive a separate disclosure regarding the referral compensation associated with their Account.
Item 15: Custody
At PMAdvisers we do not hold client custody. You will receive statements at least quarterly from our custodian. In addition, you may receive quarterly performance reports from PMAdvisers. We encourage our clients to read the reports and ask questions as needed for their full comprehension.
Item 16: Investment Discretion
Clients have the option of providing our firm with investment discretion on their behalf, pursuant to an executed investment advisory client agreement. By granting investment discretion, our firm is authorized to execute securities transactions, determine which securities are bought and sold, and the total amount to be bought and sold. Limitations may be imposed by the client in the form of specific constraints on any of these areas of discretion with our firm’s written acknowledgement.
Item 17: Proxy voting
PMAdvisers will not ask for, nor accept voting authority for client securities. Clients will receive proxies directly from the issuer of the security or the custodian. Clients should direct all proxy questions to the issuer of the security.
Item 18 – Financial Information
This item is not applicable to this Brochure. PMAdvisers does not require or solicit prepayment of more than $1,200 in fees per Client, six months or more in advance. Therefore, we are not required to include a balance sheet for our most recent fiscal year.
PMAdvisers has no financial condition that is likely to impair our ability to meet our contractual commitments to you.
PMAdvisers holds no custody of clients’ funds or securities.
ADV2 part 2B
Rigoberto Puentes
Founder & Principal
Mr. Rigoberto is a Certified Financial Planner from the Florida State University (FSU). He is a former member (2014) of the Body of Knowledge of the Financial Planning Standard Board (FPSB), the entity with the mission to establishing Financial Planning as a Global Profession. He founded and chaired Personal Financial Planning at the University of Nueva Esparta in Caracas. Rigoberto has developed his career as Investment Advisor (series 65). He has more than 25 years of investment experience in the global markets, with emphasis in financial derivatives.
Previously, Rigoberto was in E.I. DuPont de Nemours and Co., most of the time as New Business Opportunities and Development Manager for the South American Region.
Rigoberto is author of four bestselling financial books: "Finance for Dad and Mom", now in its 8th. Edition; "The Chip of Prosperity"; "Prepare yourself... The wolf is coming!" and “The treasure is in gold”.
Pablo Andrés Puentes
Founder & Director
Lawyer, Santa María University (Caracas, Venezuela)
MBA (International) EOI – Escuela de organización industrial, (Madrid, Spain)
Personal financial planner
Investment Adviser Representative (Series 65)
Mr. Pablo is an international speaker and adviser; he consults with clients on a large array of investments, including financial planning, wealth management and investment strategy.
He’s got exceptional background working with clients to help them determine their risk threshold and provide proper solutions for their financial planning and investment needs.
