Customer Relationship Summary
As of January 5, 2022
AlphaMax Distributors, LLC (“we”) is registered with the Securities and Exchange Commission (“SEC”) as a broker-dealer and is a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). We are licensed to sell securities in 52 states and U.S. territories. Brokerage and investment advisory services and fees differ, and it is important for you to understand these differences. Free and simple tools are available to research firms and financial professionals at Investor.gov/CRS, which also provides educational materials about broker-dealers, investment advisers, and investing.
What Investment Services and Advice Can You Provide Me?
We are a privately held, licensed securities broker-dealer with the SEC and with FINRA in operation since 1980. We are not a full-service broker-dealer and currently authorized only to offer a limited number of products, including but not limited to direct participation programs (“DPPs”), mutual funds and other registered investment companies and private investment funds (the “Funds”). The Funds in many, but not all, instances will be advised by an affiliated entity. We are a “sell-side” only broker-dealer and do not buy, inventory, or otherwise resell securities for customers in secondary sales. We do not give investment advice, are not an investment adviser, only make recommendations regarding the Funds that we sell, and do not make recommendations regarding products that we do not sell.
While the Funds we offer may be in your best interest for some portion of your investment portfolio, you should not allocate all your investment money to any one Fund. Although we may ask about your income, other assets and investments as part of our compliance obligations, we are not preparing a financial plan for you. Our role is solely limited to offering you Funds available on our platform, which are selected by our management team.
We will not exercise investment authority over your investment portfolio, and you make the ultimate decision as to whether to invest in the Funds unless you have delegated such authority to an advisor, trustee, or other person. We do not provide investment monitoring of your investments. We do not carry accounts and thus there are no account minimums; however, each specific Fund we offer may include a minimum investment amount specific to that offering.
- 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 these
What Fees Will I Pay?
We will receive brokerage fees and transaction-based compensation on the Funds that we sell to you, which will vary depending on each Fund’s and Fund share class’ characteristics, up to 3.5% of the sales price at the time of the sale and/or ongoing annual compensation of up to 2.8% of the net asset value per annum. The transaction-based compensation may be direct, such as a sales commission or a dealer manager fee and paid at the time of sale. Also, we may receive indirect compensation, such as servicing fees, trailing commissions or a share of revenues. The indirect compensation will be paid at various times during the duration of the investment. The compensation we receive creates conflicts of interest with you. For example, we receive more fees if you buy interests in certain Funds or a larger interest in each Fund and therefore have an incentive to encourage you to do so. The description of the fees for each Fund will be included in its offering document (i.e., the prospectus for a registered offering or a private placement memorandum for a private offering). The compensation arrangements will be set forth in the “Plan of Distribution” or corresponding section of the applicable offering document.
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 on your investments over time. Please make sure you understand what fees and costs you are paying.
Conversation Starter: Ask your financial professional: Help me understand how these 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?
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?
When we provide you with a recommendation, we must 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 to you. Here are some examples to help you understand what this means.
We have conflicts of interest in recommending products to you because we sell Funds by a limited number of sponsors and issuers, including affiliated issuers. Thus, we have not considered investments offered by all sponsors or funds and there may be other funds in which you could invest that may provide less risk and/or greater returns than the funds we offer. Also, the Funds that we sell have determined the terms of the offering, including terms related to fees and expenses, without the assistance of or input from third party experts and the Funds’ sponsor and its affiliates have the right and expect to continue to organize and manage Funds in the future similar to the Fund offered to you, which may compete with the Fund you invested in for business opportunities and the amount of time that management devotes to the Fund’s activities. With respect to the affiliated issuers, this means our affiliates may make money from a Fund’s activities, including the receipt of fees paid from such Fund for services provided to the Fund, regardless of the Fund’s success and whether you lose or make money. Thus, our employees may indirectly receive revenue from the Funds through the payment of commissions and non-transaction-based compensation, such as salaries and benefits, whether these employees sell the Funds or not.
Conflicts from How We Make Money. We derive a substantial portion of our revenue from commissions received only after we sell a security. This transaction-based compensation could create a conflict of interest with acting in your best interest when we make a sale. Also, we may make money by providing services to the Fund or its affiliates, including but not limited to administrative services and other services. Further, there may be revenue sharing where the sponsor shares a portion of its revenues with us. The provision of these other services and arrangements could create a conflict of interest with acting in your best interest.
Independent Representation in Indemnification Proceeding. Counsel represents us and may also represent the Funds. However, in the event of an indemnification proceeding or lawsuit between us and you as a subscriber, we may cause the Fund to retain separate and independent counsel to represent the Fund in such proceeding.
Conversation Starter: As a financial professional, how might your conflicts of interest affect me and how will you address them?
For additional information, please see the offering document.
How do your financial professionals make money?
Our brokers are paid brokerage fees and transaction-based compensation on sales (i.e., a commission) in an amount based upon a percentage of the commitment or investment amount that you buy. In addition, our brokers, sales manager, and other employees may be paid a salary and receive other non-transaction-based compensation.
Do you or your financial professionals have legal or disciplinary history?
Yes. Free and simple tools are available to research us and our financial professionals at Investor.gov/CRS.
Conversation Starter: As a financial professional, do you have any disciplinary history? For what type of conduct?
For additional information about our services, visit our website at http://www.alphamaxcap.com. If you would like
additional, up-to-date information or a copy of this disclosure, please call 858-459-7040.