Wales Investments Inc.

Transcription

1 Wales Investments Inc Junction Avenue Suite 100, San Jose, CA Contact: Sandra Wales April 19, 2011 This Brochure provides information about the qualifications and business practices of Wales Investments. If you have any questions about the contents of this Brochure, please contact us at 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. Wales Investments 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 Wales Investments also is available on the SEC s website at i

2 Item 1 Material Changes On July 28, 2010, the United State Securities and Exchange Commission published Amendments to Form ADV which amends the disclosure document that we provide to clients as required by SEC Rules. This Brochure dated April 16, 2011 is a new document prepared according to the SEC s new requirements and rules. As such, this Document is materially different in structure and requires certain new information that our previous brochure did not require. In the future, this Item will discuss only specific material changes that are made to the Brochure and provide clients with a summary of such changes. We will also reference the date of our last annual update of our brochure. In the past we have offered or delivered information about our qualifications and business practices to clients on at least an annual basis. Pursuant to new SEC Rules, we will ensure that you receive a summary of any materials changes to this and subsequent Brochures within 120 days of the close of our business fiscal year. We may further provide other ongoing disclosure information about material changes as necessary. We will further provide you with a new Brochure as necessary based on changes or new information, at any time, without charge. Currently, our Brochure may be requested by contacting Sandra Wales at or swales@walesinvestments.com. Our Brochure is also available on our web site You may obtain our brochure at any time, free of charge. Additional information about Wales Investments is also available via the SEC s web site The SEC s web site also provides information about any persons affiliated with Wales Investments who are registered, or are required to be registered, as Investment Adviser Representatives of Wales Investments, Inc. ii

3 Item 2 Table of Contents Item 1 Cover Page... i Item 2 Material Changes..ii Item 3 Table of Contents... iii Item 4 Advisory Business...4 Item 5 Fees and Compensation...6 Item 6 Performance Based Fees and Side By Side Management...7 Item 7 Types of Clients... 7 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss...8 Item 9 Disciplinary Information...8 Item 10 Other Financial Industry Activities and Affiliations...8 Item 11 Code of Ethics... 9 Item 12 Brokerage Practices...10 Item 13 Review of Accounts...13 Item 14 Client Referrals and Other Compensation...14 Item 15 Custody...14 Item 16 Investment Discretion...15 Item 17 Voting Client Securities...16 Item 18 Financial Information...16 Brochure Supplement(s) iii

4 Item 4 Description of Advisory Business Wales Investments, Inc. is an independently owned SEC Registered Investment Adviser. The firm is headquartered in San Jose, CA and also maintains an office in San Francisco, CA. The firm was founded by Sandra Wales in 2002, however it began accepting investment advisory clients in Ms. Wales is the Principal Owner and majority shareholder of Wales Investments, Inc. Wales Investments, Inc. provides investment advice and management to individually managed accounts, and provides financial planning and analysis services. Wales Investments also provides pension consulting and on going education for plan participants. The Adviser holds a limited power of attorney giving Wales Investments Inc. full discretion as to all investment decisions and authorization to instruct our custodian with respect to the purchase, sale, exchange and delivery of securities for our accounts. Client funds are deposited in a brokerage firm, bank or other custodian. Services Investment Supervisory Services Wales Investments, Inc. provides continuous advice to a client regarding the investment of client funds based on the individual needs of the client. Through personal discussions in which goals and objectives based on a client s particular circumstances are established, Wales Investments develops a client s personal investment policy and creates and manages a portfolio based on that policy. Wales Investments provides this service to individuals, pension and profit sharing plans, trusts, and corporations. Wales Investments will manage advisory accounts on a discretionary basis. Account supervision is guided by the stated objectives of the client (i.e., maximum capital appreciations, growth, income, or growth and income). Managed portfolios may include investments in real estate in addition to securities investments. Financial Planning Wales Investments Inc. also provides advice in the form of a Financial Plan. Clients purchasing this service will receive a written report, providing the client with a detailed financial plan designed to achieve their stated financial goals and objectives. In general, the financial plan will address any or all of the following areas of concern: Personal: Family records, budgeting, personal liability, estate information and financial goals. Tax and Cash Flow: Income tax and spending analysis and planning for past, current and future years. Wales Investments Inc. will illustrate the impact of various investments on a client s current income tax and future tax liability. 4

5 Death & Disability: Cash needs at death, income needs of surviving dependents, estate planning and disability income analysis. Retirement: Analysis of current strategies and investment plans to help the client achieve his or her retirement goals. Investments: Analysis of investment alternatives and their effect on a client s portfolio. Wales Investments gathers required information through in depth personal interviews. Information gathered includes a client s current financial status, future goals and attitudes towards risk. Related documents supplied by the client are carefully reviewed, including a questionnaire completed by the client, and a written report is prepared. Should a client choose to implement the recommendations contained in the plan, Wales Investments Inc. suggests the client work closely with his/her attorney. Implementation of financial plan recommendations is entirely at the client s discretion. Consulting Clients can also receive investment advice on a more limited basis. This may include advice on only an isolated area(s) of concern such as estate planning, retirement planning, or any other specific topic. Wales Investments also provides specific consultation and administrative services for individual client portfolios and corporate pensions. Additionally, Wales Investments provides advice on non securities matters. Generally, this is in connection with the rendering of estate planning, insurance, real estate, and/or annuity advice. Corporate Plans Wales Investments, Inc. assists corporate clients with evaluating and optimizing existing company sponsored retirement plans, and in establishing new plans. Wales Investments develops an Investment Policy Statement to protect the interests of the employer as Plan Sponsor, as well as the participants. In addition, Wales Investments offers their client's employees customized education tailored to the company's culture, including seminars, one on one meetings and e mail support. Financial plan recommendations are not limited to any specific product or service offered by a Broker Dealer or insurance company. Wales Investments, Inc. does not participate in any wrap programs. As of March 4 th, 2011, Wales Investments manages approximately: Discretionary $35,555,592 AUM 375 client accounts Non Discretionary $3,634,613 AUM 7 client accounts 5

6 Item 5 Fees and Compensation The specific manner in which fees are charged by Wales Investments is established in a client s written agreement with Wales Investments. Wales Investments will generally bill its fees on a quarterly basis, in advance. Clients may also elect to be billed directly for fees or to authorize Wales Investments to directly debit fees from client accounts. Management fees shall be prorated for each capital contribution and withdrawal made during the applicable calendar quarter (with the exception of de minimis contributions and withdrawals). Accounts initiated or terminated during a calendar quarter will be charged a prorated fee. Upon termination of any account, any prepaid, unearned fees will be promptly refunded, and any earned, unpaid fees will be due and payable. Wales Investments fees are exclusive of brokerage commissions, transaction fees, and other related costs and expenses which shall be incurred by the client. Clients may incur certain charges imposed by custodians, brokers, third party investment and other third parties such as fees charged by managers, custodial fees, deferred sales charges, odd lot differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions. 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 Wales Investments fee, and Wales Investments shall not receive any portion of these commissions, fees, and costs. Compensation For individually managed accounts, Wales Investments typically charges a percentage of the assets under management, payable in quarterly installments in advance at the beginning of each calendar quarter, based on the net market value of the assets in the client's account at the close of the market on the last day of the previous quarter. Wales Investments Inc. generally requires a minimum of $100,000 to open an individually managed account, but reserves the right to waive this minimum. A client may terminate an individually managed account at any time by giving written notice. If the client terminates prior to the end of a calendar quarter, the quarterly fee will be pro rated. Depending on the level of assets under management, fees may be negotiable on a case by case basis. The applicable percentage varies according to the type and amount of assets as set forth in the following schedule: 6

7 Assets under management (fee includes general planning services for assets under management): A fee of 1% is charged for the first $1,000,000 of assets For accounts exceeding $1,000,000, a fee of.5% is charged on the portion over $ 1,000,000. Comprehensive Financial Planning: $2,500 $5,000. Hourly advisory services: $250 $350 per hour. The Adviser may negotiate fees in certain cases. Fixed Fees: Wales Investments Inc. accepts some clients on a retainer basis. The amount of retainer is based on the extent and nature of services rendered, but typically ranges from $2,000 10,000 annually. Retainer fees are payable in quarterly installments at the beginning of each calendar quarter. Services to be provided on a retainer basis are negotiated with each client, and may include quarterly investment performance reports, investment recommendations and general financial advice. At no time will Wales Investments accept or maintain custody of a client s funds or securities except for authorized fee deduction. Item 6 Performance Based Fees and Side By Side Management Wales Investments does not charge any performance based fees (fees based on a share of capital gains on or capital appreciation of the assets of a client). Item 7 Types of Clients Wales Investments provides portfolio management services to individuals, high net worth individuals, corporate pension and profit sharing plans. We generally require minimum investment assets of $100,000, however, based on facts and circumstances, we may accept accounts with a lower value. 7

8 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss Wales Investments invests in exchange listed securities, foreign issued securities, over thecounter securities, warrants, corporate debt securities, commercial paper, certificates of deposit, municipal securities, United States government securities, variable life insurance, variable annuities, mutual funds, options and real estate. Our methods of analysis include fundamental analysis and technical analysis. Fundamental analysis involves the analysis of the financial well being of a financial entity whereas technical analysis places an emphasis on the analysis of the price movements of an underlying security. We utilize third party research materials, magazines, newspapers, corporate financial documents and company press releases to aid us in our investment research. Investing across these securities involves market risk, inflation risk, interest rate risk, liquidity risk and reinvestment risk. All risks are explained in more detail in the Investment Policy Statement provided to each client. Investing in securities involves risk of loss that clients should be prepared to bear. Investment Strategies include sector rotation along with bottom up individual equity selection. The sector rotation strategy involves performing top down macroeconomic analysis to determine which sectors of the economy are most likely to outperform. Individual equity selection involves analysis of a company s financial statements and longterm growth prospects. Item 9 Disciplinary Information Registered investment advisers are required to disclose all material facts regarding any legal or disciplinary events that would be material to your evaluation of Wales Investments or the integrity of Wales Investments management. Neither Wales Investments, nor any of our employees, has had any civil or criminal actions brought against them. Neither Wales Investments, nor any of our employees, has had any administrative proceedings before the SEC, and any other regulatory agency, any state regulatory agency, or any foreign financial regulatory authority. Item 10 Other Financial Industry Activities and Affiliations 8

9 Wales Investments does not have any affiliations with any Broker Dealer or any other investment adviser or financial entity. No employees of Wales Investments are registered, or have an application pending to register, as a futures commission merchant, commodity pool operator or a commodity trading adviser. When consistent with its fiduciary duty to the client, Wales Investments Inc. may refer a client in need of mortgage services to one or more mortgage brokers or to a real estate agent. The principal officer of Wales Investments Inc., in her separate capacity as a real estate agent, may receive separate and typical compensation from the mortgage broker or real estate agent for making such a referral. The principal officer may also receive commissions for real estate or insurance transactions. Clients should be aware that the opportunity to receive such compensation creates a potential conflict of interest. Wales Investments Inc. has not and will not recommend that a client obtain any of these services for the purpose of funding an advisory account with Wales Investments Inc. Item 11 Code of Ethics Code of Ethics Wales Investments, Inc. has adopted a Code of Ethics expressing the firm's commitment to ethical conduct. Wales Investments Code of Ethics describes the firm's fiduciary duties and responsibilities to clients, and sets forth Wales Investments practice of supervising the personal securities transactions of supervised persons with access to client information. Individuals associated with Wales Investments may buy or sell securities for their personal accounts identical to or different than those recommended to clients. It is the expressed policy of Wales Investments that no person employed by Wales Investments shall prefer his or her own interest to that of an advisory client or make personal investment decisions based on the investment decisions of advisory clients. To supervise compliance with its Code of Ethics, Wales Investments Inc. requires that anyone associated with this advisory practice with access to advisory recommendations provide annual securities holdings reports and quarterly transaction reports to the firm's Chief Compliance Officer. Wales Investments requires such access persons to also receive approval from the Chief Compliance Officer prior to investing in any IPO's or private placements (limited offerings). Wales Investments Inc. requires that all individuals must act in accordance with all applicable Federal and State regulations governing registered investment advisory practices. Wales Investments Code of Ethics further includes the firm's policy prohibiting the use of material non public information. Any individual not in observance of the above may be subject to discipline, up to and including termination. 9

10 Wales Investments, Inc. will provide a complete copy of its Code of Ethics to any client upon request to the Chief Compliance Officer at Wales Investments principal address. The interests of the clients of Wales Investments come before the interests of the company or any of its employees. Employees may personally invest in the same securities as clients. Permission will not be granted for any employee trade that breaches fiduciary obligations to clients, or creates an appearance of impropriety. If clients and employees trade securities of the same class on the same day, either they will receive the same price, or the client will receive the more favorable price. Trade errors, when they occur, will be resolved in favor of the client whenever possible, in such a way that does not favor the Adviser's interest over the client's interest. Wales Investments Inc. may recommend a custodian to the client based on suitability for the client's anticipated investment needs. Custodians are chosen based on many factors, including reputation, financial strength, stability, efficiency of execution and error resolution, willingness to execute difficult transactions, online capability and other factors involved in the receipt of brokerage services generally. The Adviser negotiates for the lowest possible rates for clients, and reviews the quality of trade execution at least annually. Occasionally, employees of Wales Investments, Inc are invited to participate in educational events sponsored by custodians or other companies whose services or products we may recommend to clients. Such invitations may be accepted, including transportation and accommodations when offered, if the research obtained is expected to be of benefit to our clients by improving our overall investment strategy. Wales Investments does not enter into any quid pro quo arrangements in conjunction with such invitations, nor agree to bring the sponsors' information to the attention of clients, nor apply any benefit obtained in such a way as to favor one client over another. Any such invitations will be evaluated for conflicts of interest prior to acceptance. Wales Investments also makes use of research that is purchased, when we expect it to advance our clients' interests. Personal trading by the firm s employees is allowed. In many cases, employees may desire to trade securities that the firm is trading for clients. The potential conflicts of interest are addressed with the firm's Code of Ethics and Personal Securities Transactions Policy which is discussed within this answer, to Item 11. Item 12 Brokerage Practices Unless a client specifies otherwise, Wales Investments, Inc. has complete discretion to select the brokers or dealers through which securities are to be traded and to negotiate the commission rates at which brokerage transactions are affected. We acknowledge our 10

11 obligation to seek best execution reasonable within the circumstances of a trade. However, Wales Investments does not obligate itself to obtain the lowest commission or best net price for an account on any particular transaction. In addition, if a client directs us to use a specific broker, we have not negotiated the terms and conditions of the broker's service (including, but not limited to, commission rates); in this case, Wales Investments does not have responsibility for obtaining the best prices or particular commission rates with or through any such broker; and the client may not obtain rates as low as it might if we had discretion to select other Broker Dealers. We select a broker and custodian based on a number of factors. The main selection factors include, but are not limited to, past success in obtaining reasonable net prices on transactions, commission rates, prime brokerage capability, custody services, online access to client account data, reputation, financial strength and stability, back office support and other institutional adviser services, settlement and allocation capabilities, web trading ability, product offering and inventory (including fixed income securities), efficiency and speed of execution and error resolution, research and resource availability of broker websites, ability to place block trades, and willingness to execute related or unrelated difficult transactions in the future. Wales Investments has selected Charles Schwab, Fidelity Brokerage Services, and TD Ameritrade as its preferred custodians for client accounts. We may accept client accounts custodied at other Broker Dealers if there is an existing relationship between the Broker Dealer and client, at our sole discretion. Wales Investments does not pay for any products, research, or services from its preferred custodians, or any other Broker Dealer or third party as a result of client securities transactions. Wales Investments participates in services programs offered to independent investment advisers by Charles Schwab & Company, Inc. ( Schwab ), Fidelity Brokerage Services, Inc. ( Fidelity ), and TD Ameritrade (collectively, the Programs ). While there is no direct linkage between the investment advice given and participation in the Programs, economic benefits are received which would not be received if Wales Investments Inc. did not give investment advice to clients. Depending on the particular program, these benefits may include: receipt of duplicate client confirmations and bundled duplicate statements; access to a trading desk serving Program participants exclusively; access to block trading which provides the ability to aggregate securities transactions and then allocate the appropriate shares to client accounts; ability to have investment advisory fees deducted directly from client account; access, for a fee, to an electronic communication network for client order entry and account information; receipt of compliance publications; and access to mutual funds which generally require significantly higher minimum initial investments or are 11

12 generally available only to institutional investors. The benefits received through participation in the Program may or may not depend upon the amount of transactions directed to, or amount of assets held in custody by, Schwab, Fidelity or TD Ameritrade. Schwab, Fidelity, and/or TD Ameritrade also make available to Wales Investments Inc. other products and services that benefit Wales Investments Inc. but may not benefit its clients accounts. Some of these other products and services assist Wales Investments Inc. in managing and administering clients accounts. These include software and other technology that provide access to client account data (such as trade confirmations and account statements), facilitate trade execution (and allocation of aggregated trade orders for multiple client accounts), provide research, pricing information and other market data, facilitate payment of Wales Investments Inc. s fees from its clients accounts, and assist with back office functions, record keeping and client reporting. Many of these services generally may be used to service all or substantial number of Wales Investments Inc. s accounts, including accounts not maintained at Schwab, Fidelity and/or TD Ameritrade. These firms also make available to Wales Investments Inc. and other services intend to help Wales Investments Inc. manage and further develop its business enterprise. These services may include consulting, publications and conferences on practice management, information technology, business succession, regulatory compliance, and marketing. In addition, Schwab, Fidelity and/or TD Ameritrade may make available, arrange and/or pay parties. Schwab, Fidelity and/or TD Ameritrade may discount or waive fees they would otherwise charge for some of these services or pay all or part of the fees of a third party providing these services to Wales Investments Inc. While as a fiduciary, Wales Investments Inc. endeavors to act in its clients best interests, Wales Investments Inc. s recommendation that clients maintain their assets in accounts at Schwab, Fidelity and/or TD Ameritrade may be based in part on the benefit to Wales Investments Inc. of the availability of some of the foregoing products and services provided by Schwab, Fidelity and/or TD Ameritrade. We do not use client brokerage commissions (transaction costs) paid to Charles Schwab, Fidelity, or TD Ameritrade, for the purposes of obtaining research or other services. Trade execution is done on a best execution basis. As brokerage commissions (transaction costs) are paid directly to Charles Schwab, Fidelity, and/or TD Ameritrade and we do not use client brokerage commission to obtain research or other services, our incentive is for clients to receive best execution. We do not cause clients to pay commissions (transaction costs) higher than those charged by other Broker Dealers in return for soft dollar benefits. 12

13 Wales Investments does not consider referrals when we select or recommend Broker Dealers. We typically have discretionary authority to select the Broker Dealer for custodial and execution services. The Broker Dealer is chosen based upon criteria such as, but not limited to the following: reasonableness of commissions charged to the client, tools and services made available to the client and Wales Investments, and convenience of access to the account trading and reporting. We have chosen Charles Schwab, Fidelity, and TD Ameritrade as our preferred custodians for client accounts. We may, however, accept client accounts custodied at other Broker Dealers if there is an existing relationship between the Broker Dealer and client, at our sole discretion. For speed of execution or a more advantageous net price, we typically aggregate sale and purchase orders being made contemporaneously for several accounts, including the accounts of Wales Investments and its employees. In such event, the average price of a security purchased or sold by the firm is determined from the broker and a client is charged or credited, as the case may be, the average daily transaction price. However, if a client has specifically directed transactions to a particular broker, his account will generally be unable to participate in aggregated orders and, therefore, may pay a different price. Item 13 Review of Accounts Reviews: Wales Investments reviews each account on an ongoing basis, with an in depth review performed on a quarterly basis. Each Portfolio Manger will review the accounts assigned to them. This quarterly review gives particular attention to asset allocation and to position size as compared to the account's investment guidelines. Accounts are also reviewed more frequently as the result of a dramatic change in economic or market conditions or changes in a client s personal or financial circumstances. Reviews may also be done at the client s request. All accounts receive monthly statements from their custodian. The firm uses only qualified custodians. Wales Investments reports are reconciled with custodian records. Our reports summarize trades and other transactions, give detailed information regarding each position held (e.g. quantity held, cost, current market price, aggregate market value, dividends and interest paid), and itemize the market value of assets under management, which we use as the basis 13

14 for calculating fees. Valuations are based on market prices as provided by Wales Investments custodians or generally accepted information sources such as IDC (Interactive Data Corporation.). Each client also receives quarterly letters reviewing account performance and discussing the firm's current investment perspective. Other Services: Clients who engage for financial planning services only may receive the Financial Plan and one time performance analysis, rather than regular reports. All clients may receive additional reviews on request. Item 14 Client Referrals and Other Compensation Wales Investments does not accept referral fees nor compensate referring parties in regards to referrals. Sandra Wales is a Registered Insurance Agent in California and sells insurance to clients that request or need it. Currently Sandra only has one policy of Term Life Insurance that she receives compensation for. This compensation is paid to her personally, not Wales Investments. Sandra Wales is a licensed Real Estate Associate in California and Florida. This designation was obtained primarily to gain a level of expertise as she helps clients with their real estate investments by providing advice. While Sandra has received several commissions in the past, she does not actively pursue this and has not received a commission in years. Item 15 Custody Except for the automatic deduction of the Management Fee, Wales Investments does not have custody of client assets. See Item 5 A.&B. Clients receive at least quarterly statements from the qualified custodian that holds and maintains client s investment assets. Wales Investments urges you to carefully review such statements and compare such official custodial records to the account statements that we may provide to you. Our statements may vary from custodial statements based on accounting procedures, reporting dates, or valuation methodologies of certain securities. 14

15 Item 16 Investment Discretion Wales Investments usually receives discretionary authority from the client at the outset of an advisory relationship to select the identity and amount of securities to be bought or sold. In all cases, however, such discretion is to be exercised in a manner consistent with the stated investment objectives for the particular client account. When selecting securities and determining amounts, Wales Investments observes the investment policies, limitations and restrictions of the clients for which it advises. For registered investment companies, Wales Investments authority to trade securities may also be limited by certain federal securities and tax laws that require diversification of investments and favor the holding of investments once made. Investment guidelines and restrictions must be provided to Wales Investments in writing. Because Wales Investments manages more than one account, there may be conflicting demands on our time and potential conflicts regarding the allocation of investment opportunities. We will attempt to resolve all such conflicts in a manner that is generally fair and equitable to all of our clients. However, Wales Investments may take action with respect to any of its clients which differs in timing or nature from the action taken with respect to another client. It is Wales Investments policy, to the extent practicable, to allocate investment opportunities over a period of time on a fair and equitable basis among its clients. However, Wales Investments asserts absolute discretion to determine whether an investment is practical or desirable for any particular client. We may acquire securities for one client which are not deemed appropriate for another. We take into account clients' investment objectives when making investment decisions. Also, Wales Investments or access persons may personally trade in securities which we do not deem appropriate for our clients, subject to our Code of Ethics. Portfolio Managers complete various documents including checklists, set up sheets, and profile sheets before the client signs custodian new account paperwork giving us limited power of attorney. 15

16 Item 17 Voting Client Securities As a matter of firm policy and practice, Wales Investments does not have any authority to and does not vote proxies on behalf of advisory clients. Clients retain the responsibility for receiving and voting proxies for any and all securities maintained in client portfolios and will receive proxy voting information directly from the custodian. Wales Investments may, however, provide advice to clients regarding the clients voting of proxies. For ERISA clients, Wales Investments has taken the steps to ensure that client s proxies are being handled by a named fiduciary. Item 18 Financial Information Wales Investments does not require or solicit prepayment of more than $1,200 in fees per client, six months or more in advance. Wales Investments does have discretionary authority over the majority of client accounts and custody only to the extent that we automatically deduct management fees, however, we have no financial commitment that impairs our ability to meet contractual and fiduciary commitments to clients, and have not been the subject of a bankruptcy proceeding. 16

17 Item 1 Introduction Sandra Wales Wales Investments, Inc Junctio n Avenue Suite 100, San Jose, CA m Contact: Sandra Wales April 16, 2011 This Brochure Supplement provides information about Sandra Wales that supplements the Wales Investments Brochure. You should have received a copy of that Brochure. Please contact us if you did not receive Wales Investments Brochure or if you have any questions about the contents of this supplement. Additional information about Sandra Wales is available on the SEC s website at 17

18 Item 2 Educational Background and Business Experience Name: Sandra Wales, President, Chief Investment Officer, Chief Compliance Officer Year of Birth: 1955 Education: B. Mus. Bachelor's degree in Music History with honours University of Western Ontario, 1977 MBA Finance, Santa Clara University, 1996 Business Experience: 08/03 Present, President, Chief Investments Officer, and Chief Compliance Officer, Wales Investments, Inc. 01/05 Present, Adjunct Teacher, UC Santa Cruz 07/02 08/03, Financial Planner and Director of Business Development, Lehrer Management, Inc. 12/01 06/02, Senior VP of Investments, Sun America Securities 05/01 12/01, Chief Financial Officer, Artemis Ventures 09/00 07/02, Chief Financial Officer, Framfab USA 03/99 09/00, Director of Real Estate and Capital Management, Director of Finance Expense Payables, Gap, Inc. 11/93 03/99, General Accounting Manager, Silicon Graphics Ms. Wales holds the following professional designations: CFP Certified Financial Planner, 2004 To earn a CFP charter, Ms. Wales had to complete the CFP Board's CFP certification process which consists of initial requirements in the areas of Education, Examination, Experience and Ethics (known as "the four Es"). Applicants for certification must also have a bachelor's degree (or higher), or its equivalent, in any discipline, from an accredited college or university in order to obtain CFP certification. Having successfully met the requirements and completed the initial certification process, Ms. Wales is required to meet ongoing education and disclosure requirements to maintain CFP certification. More information about the CFP certification process may be found at CMA Certified Management Accountant, 1996 The Certified Management Accountant (CMA) designation provides a foundation in accounting, management and strategy - using both financial and non-financial information to direct tactical and operational decision-making in 18

19 industry and government. Subject matter includes strategy, management accounting, corporate finance, operations management, internal control, financial accounting, statistics and economics, with an emphasis on ethics. To earn a CMA designation, Ms. Wales had to study and pass the CMA exam through the IMA Institute of Management Accounts (is this the correct organization?) and is required to meet ongoing education and disclosure requirements to maintain CMA s certification. More information about the CMA certification process may be found at Registered Insurance Agent with the State of California To become a Registered Insurance Agent with the State of California, Ms. Wales had to complete 20 hours of approved prelicensing study, 12 hours of approved prelicensing study on ethics and the California Insurance Code, successful completion of the exam, and must meet the ongoing continuing education requirements. More information about the Registered Insurance Agent program with the State of California may be found at Real Estate Association Licenses California and Florida To become a licensed Real Estate Associate in the States of California, Ms. Wales had to successfully complete three college level courses in order to qualify for the examination. The required courses were Real Estate Principles, Real Estate Practice, and one course from a list of related real estate courses. Courses were required to be three semester units or four quarter units at the college level. Courses are required to be completed at an accredited institution. Successful completion of the exam and ongoing continuing education is required. More information about the requirements for the Real Estate Association License in California may be found at To become a licensed Real Estate Associate in Florida, Ms. Wales had to successfully complete and pass a 63 hour Sales Associate pre license course. Continuing education includes a 45 hour post licensing course. More information about the requirements for the Real Estate Associate License in Florida may be found at Item 3 Disciplinary Information Sandra Wales has no legal or disciplinary events applicable to this Item. Item 4 Other Business Activities No information is applicable to this Item. Item 5 Additional Compensation 19

20 No information is applicable to this Item. Item 6 Supervision Sandra Wales, President and Chief Compliance Officer, monitors the investment activities, personal investing activities, and adherence to the Adviser's compliance program and Code of Ethics of the Wales Investments supervised persons on a continuous basis using various methods, including periodic inspection and review of client securities positions and transaction activity, obtaining certifications of compliance with company policies and procedures from those supervised, and obtaining and reviewing brokerage statements or transactions and holdings reports of the supervised persons. To provide adequate oversight of Wales Investments personnel, Seetha Nachiappan, Financial Planner, will provide the same oversight activities over Ms. Wales. Sandra Wales and Seetha Nachiappan can be reached at

21 Item 1 Introduction Addison Schroeder Wales Investments, Inc Junctio n Avenue Suite 100, San Jose, CA m Contact: Sandra Wales April 16, 2011 This Brochure Supplement provides information about Addison Schroeder that supplements the Wales Investments Brochure. You should have received a copy of that Brochure. Please contact us if you did not receive Wales Investments Brochure or if you have any questions about the contents of this supplement. Additional information about Addison Schroeder is available on the SEC s website at 21

22 Item 2 Educational Background and Business Experience Name: Addison Schroeder, Assistant Portfolio Manager Year of Birt h: 1987 Education: Santa Clara University, Bachelor of Science in Commerce (Finance & Economics), 2009 Business Experience: 07/09 Present, Assistant Portfolio Manager, Wales Investments, Inc. 06/08 09/08, ebay, Inc., Financial Analyst 06/05 09/05, Morgan Stanley, Investment Management Intern Item 3 Disciplinary Information Addison Schroeder has no legal or disciplinary events applicable to this Item. Item 4 Other Business Activities No information is applicable to this Item. Item 5 Additional Compensation No information is applicable to this Item. Item 6 Supervision Sandra Wales, President and Chief Compliance Officer, monitors the investment activities, personal investing activities, and adherence to the Adviser's compliance program and Code of Ethics of the Wales Investments supervised persons on a continuous basis using various methods, including periodic inspection and review of client securities positions and transaction activity, obtaining certifications of compliance with company policies and procedures from those supervised, and obtaining and reviewing brokerage statements or 22

23 transactions and holdings reports of the supervised persons. Ms. Wales can be reached at