BEST INTEREST/ CUSTOMER RELATIONSHIP
White Mountain Capital, LLC Form CRS Customer Relationship Summary May 2020Is A Brokerage Account Right For You?
There are different ways you can get help with your investments. You should carefully consider which types of accounts and services are right for you. White Mountain Capital is a broker-dealer registered with the Securities and Exchange Commission and provides brokerage account and services rather than advisory account services. This document gives you a summary of the types of services we provide and how you pay.
Please ask us for more information. There are some suggested questions at the end of this document. You can also get more information about White Mountain Capital and its financial professionals, as well as use free tools to research investing and financial instruments at www.Investor.gov/CRS, www.finra.org and www.sipc.org.
RELATIONSHIPS AND SERVICES
WHAT INVESTMENT SERVICES AND ADVICE CAN YOU PROVIDE ME?
OUR OBLIGATIONS TO YOU
We must abide by certain laws and regulations when working with you.
We must act in your best interest and not place our interests ahead of yours when we recommend any investment or strategy. When we provide any service to you, we must treat you fairly and comply with a number of specific obligations.
Our interests can conflict with your interests. When we provide recommendations we must eliminate these conflicts or tell you about them and reduce them when possible.
For additional information on conflicts, please see our Fee Schedule at www.whitemountaincapital.com/customers-relationship.html#DAC
If you open a brokerage account, you will pay a transaction-based fee, commonly referred to as a commission, every time you buy or sell a security.
You may select investments or we may recommend investments to you, but the ultimate investment decision as to your strategy and the purchase or sale of investments will be yours.
Our clearing firm will deliver to you, either in paper form or electronically, account statements at least quarterly and confirmations of transactions done in your account.
We offer a variety of investments including equities, corporate and municipal bonds, mutual funds. However, other firms could offer a wider range of choices, some of which might have lower costs.
Although your broker is not required to monitor your account, he or she may voluntarily review your account at any time.
CONVERSATION STARTERS:
Ask Your Broker
Given my financial situation, should I choose a brokerage service? Why or why not?
How will you choose investments to recommend to me?
What is your relevant experience, including your licenses, education and other qualifications? What do those qualifications mean?
WHAT FEES WILL I PAY?
- FEES AND COSTS Fees and costs affect the value of your account over time. Ask your broker to give you personalized information on the fees and costs that you will pay.
- The amount you pay is based on each transaction and not the value of your account.
For most transactions (like stocks, bonds or options), you will pay a commission. Mutual funds often charge a fee (called a “load”) that reduces the amount of your investment. Some investments (like variable annuities and mutual funds) impose additional fees that will reduce the value of your investment over time.
Our commissions are variable and depend on a variety of factors, such as the amount you buy or sell or what type of investment is being purchased or sold, but are generally less than 2% of the total dollar amount (principal) of the purchase or sale.
Your account may be charged additional fees such as inactivity fees, custodial fees or service fees for certain account activities such as wiring money or depositing stock certificates.
The more transactions in your account, the more commissions you will be charged. We therefore have an incentive to encourage you to engage in transactions.
You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make over time. Please make sure you understand what fees and costs you are paying. We will provide you with a copy of our fee schedule upon account opening. - For additional information on conflicts, please see our Fee Schedule at www.whitemountaincapital.com/customers-relationship.html#fees
CONVERSATION STARTER:
Ask Your Broker
Help me understand how fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?
How might your conflicts of interest affect me, and how will you address them?
WHAT ARE YOUR LEGAL OBLIGATIONS TO ME WHEN PROVIDING RECOMMENDATIONS? HOW ELSE DOES YOUR FIRM MAKE MONEY AND WHAT CONFLICTS OF INTEREST DO YOU HAVE?
We benefit from our recommendations to you. When we provide you with a recommendation we have to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they affect the recommendations we provide you. Here are some examples to help you understand what this means.
We can make additional compensation by selling you certain investments, such as mutual funds, because they are offered by companies that pay our firm to sell their investments. In turn, your broker will receive more money if you buy those investments.
We may recommend the same investments to you as well as to other types of clients (such as a bank, for example). In case of limited supply of a security, we may make more money by conducting the transaction with the other client rather than with you.
For additional information on conflicts, please see our Fee Schedule at www.whitemountaincapital.com/customers-relationship.html#DAC
HOW DO YOUR FINANCIAL PROFESSIONALS MAKE MONEY?
Our brokers are paid a flat percentage of each commission or sales load paid by you on a per-transaction basis. Since more frequent transactions may result in higher commissions, there is an inherent conflict of interest among the firm, broker, and client that must be disclosed and mitigated.
DO YOU OR YOUR FINANCIAL PROFESSIONALS HAVE LEGAL OR DISCIPLINARY HISTORY?
YES, we have disciplinary events. Visit Investor.gov for a free search tool to research our firm and our financial professionals. You may also obtain further information at BrokerCheck.Finra.org.
CONVERSATION STARTER:
Ask Your Broker
As a financial professional do you have any disciplinary history? For what kind of conduct?
Supplemental Disclosures Pursuant to Regulation BI
White Mountain Capital is a broker-dealer that offers equities, fixed income (municipal and corporate), preferreds, options and mutual funds. We do not offer all types of securities; for example, we do not offer variable annuities or futures, which could be desirable products under certain circumstances. We will not consider products that we cannot offer when making recommendations to you.
As an introducing broker dealer, we rely on agreements with several entities to source securities that do not trade on exchanges. For example, we have selling arrangements with dozens of mutual funds, which is a subset of all such products. Our recommendations will be based upon our reasonable belief of which product best serves your interest, from the securities that are available to us.
We have contracted the services of other broker-dealers for routing and execution of orders. While these broker-dealers are required to comply with SEC and FINRA regulations pertaining to best execution, they may have cost-sharing or rebate agreements with other member firms to which they direct our order flow. White Mountain Capital does not have any cost-sharing or rebate arrangements with other broker-dealers.
Our clearing firm charges you fees for certain services, such as an annual custodial fee for IRAs, an inactivity fee for accounts with no transactions, fees for depositing physical stock certificates or checking privileges. A full list of fees that can be charged are found in our Fee Schedule.
Members of White Mountain Capital’s ownership and management also manage portfolios for an affiliated hedge fund and an unaffiliated mutual fund.
Potential conflicts include:
- Funds will often hold or trade the same securities as those that are recommended to you.
- Depending on the particular circumstances, the affiliated fund may sell the same security your broker recommends you purchase.
- White Mountain Capital may purchase (or sell) a block of the same security to allocate to both the fund and individual customers. The unaffiliated mutual fund may purchase (or sell) the same security as White Mountain Capital customers purchase (or sell) with no guarantee of receiving the same execution.
White Mountain Capital has procedures to ensure that allocations are made to client accounts in a manner that does not favor the fund. There are also procedures that mitigate the potential for crossing securities between the fund and client accounts. There are supervisory procedures to detect and mitigate potential conflicts arising from securities trading in the unaffiliated mutual fund.
White Mountain Capital staff hold their own brokerage accounts at the firm. There are procedures in place to identify and mitigate potential instances of brokers “trading ahead” or giving priority to their own accounts over those of their customers.
As stated in our Customer Relationship Summary, your broker and the firm makes money whenever you conduct a transaction. Therefore, there is an incentive for brokers to recommend transactions. We have procedures and supervisory review processes that are designed to prevent, identify and mitigate possible instances of excessive trading.
The facts and circumstances surrounding a particular recommendation may present other conflicts and/or necessitate additional disclosures. Such disclosures will be made on a case-by-case basis, directly with the customer to whom the recommendation is made.
To File a Complaint
Customer complaints can be addressed to the following:
White Mountain Capital, LLC
150 Prospect Street, Unit 23, Greenwich, CT 06830
ADDITIONAL INFORMATION
For additional information about our services, visit www.whitemountaincapital.com/ImportantNotice. To report a problem to SEC call 800-732-0330. To report a problem to FINRA, call 301-590-6500. To obtain up to date information or a Form CRS from us, call 212-509-0313.
FEE SCHEDULE
COMMISSIONS AND FEE SCHEDULE—EFFECTIVE 01/01/2019
Fees are subject to change with prior notification.
Commissions will be charged on a per-transaction basis for equities, fixed income, options, preferreds and warrants. Commissions will be 2% or less than the principal amount of the trade, unless extenuating circumstances make the transaction more costly. Should the commission equal more than 2% of the principal amount, your Account Executive will disclose it to you prior to executing the transaction.
Sales loads will be charged by mutual funds, according to the fund’s prospectus. Your account executive will disclose the amount to you prior to executing a purchase or sale in a mutual fund.
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DTC deliveries, per position |
$50 |
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Account Transfer via ACAT system, per account |
$100 |
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Non-ACATs transfer |
$150 |
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Certificate handling fee, per issue |
$50 |
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Legal transfer fee |
$50 |
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Safekeeping, per issue, per year |
$15 |
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Exercising warrants or rights |
$25 |
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Exercising employee stock options |
$50 |
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Inactive holding and reporting fee, per year |
$50 |
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Qualified plans |
$250 primary annual |
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IRA termination |
$50 |
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Vision Checking/Card Fees (by application only) |
$50 anually |
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Returned check/NSF fee |
$25 per event |
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Stop payment request |
$25 per event |
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Copy of canceled check |
$10 per event |
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Voluntary Reorganization |
$50 |
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Margin base rate |
4.99% |
|
Inactive holding and reporting fee, per year |
$50 |
Please see Hilltop Securities’ Customer Information Brochure or ask your Account Executive for any other fees that may apply to your specific account.
Questions regarding fees, commissions or markups should be directed to Compliance at 212-509-0313.
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White Mountain Capital LLC website and its links (together the “Web Site”) are presented for informational purposes only. The Web Site is neither offering or soliciting to buy securities of any kind nor is it giving any type of investment advice upon which any type of investment advice upon which any person should rely without giving due consideration to other sources of information. White Mountain Capital LLC is a registered Broker-Dealer and a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). All retail brokerage customer securities transactions are cleared through Hilltop Securities Inc (SWST).
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