Compliance and Regulation
Important Disclosure Information:
Hanson & Doremus Investment Management (“Hanson & Doremus”) is an SEC registered investment adviser located in Burlington, Vermont. A copy of the Hanson & Doremus current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request.
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The Hanson & Doremus may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. The Hanson & Doremus’s web site is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of the Hanson & Doremus’s web site on the Internet should not be construed by any consumer and/or prospective client as Hanson & Doremus’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Any subsequent, direct communication by the Hanson & Doremus with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. A copy of the Hanson & Doremus’s current written disclosure Brochure and Form CRS discussing the Hanson & Doremus’s business operations, services, and fees is available on this web site and/or from Hanson & Doremus upon written request. The Hanson & Doremus does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to the Hanson & Doremus’s web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by the Hanson & Doremus), will be profitable or equal any historical performance level(s).
Certain portions of the Hanson & Doremus’s web site (i.e. newsletters, articles, commentaries, etc.) may contain a discussion of, and/or provide access to, the Hanson & Doremus (and those of other investment and non-investment professionals) positions and/or recommendations as of a specific prior date. Due to various factors, including changing market conditions, such discussion may no longer be reflective of current position(s) and/or recommendation(s). Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from Hanson & Doremus, or from any other investment professional. The Hanson & Doremus is neither an attorney nor an accountant, and no portion of the web site content should be interpreted as legal, accounting or tax advice.
Please Note: Limitations: Neither rankings and/or recognitions by unaffiliated rating services, publications, media, or other organizations, nor the achievement of any professional designation, certification, degree, or license, membership in any professional organization, or any amount of prior experience or success, should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if the Hanson & Doremus is engaged, or continues to be engaged, to provide investment advisory services. Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser. Rankings are generally limited to participating advisers (see participation criteria/methodology). Unless expressly indicated to the contrary, Hanson & Doremus did not pay a fee to be included on any such ranking. No ranking or recognition should be construed as a current or past endorsement of Hanson & Doremus by any of its clients.
To the extent that any client or prospective client utilizes any economic calculator or similar interactive device contained within or linked to Hanson & Doremus’s web site, the client and/or prospective client acknowledges and understands that the information resulting from the use of any such calculator/device, is not, and should not be construed, in any manner whatsoever, as the receipt of, or a substitute for, personalized individual advice from the Hanson & Doremus, or from any other investment professional.Each client and prospective client agrees, as a condition precedent to his/her/its access to Hanson & Doremus’s web site, to release and hold harmless the Hanson & Doremus, its officers, directors, owners, employees and agents from any and all adverse consequences resulting from any of his/her/its actions and/or omissions which are independent of his/her/its receipt of personalized individual advice from the Hanson & Doremus.
Filed Form CRS
Item 1 – Introduction
Hanson & Doremus Investment Management (“we”, “us” or “our”) is registered with the U.S. Securities Exchange Commission (“SEC”) as an investment adviser. Investment advisory services and compensation structures differ from that of a registered broker-dealer, and it is important that you understand the differences. Free and simple tools are available to research firms and financial professionals at www.Investor.gov/CRS. The site also provides educational materials about broker-dealers, investment advisers and investing.
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ITEM 2 – RELATIONSHIPS AND SERVICES
What investment services and advice can you provide me?
We provide investment advisory services, including discretionary and non-discretionary investment management and financial planning services to individuals, trusts and estates (our “retail investors”). When a retail investor engages us to provide investment management services we shall monitor, on a continuous basis (no less than quarterly), the investments in the accounts over which we have authority as part of our investment management service. Furthermore, when engaged on a discretionary basis, we shall have the authority, without prior consultation with you (unless you impose restrictions on our discretionary authority), to buy, sell, trade and allocate the investments within your account(s) consistent with your investment objectives. If you engage us on a non-discretionary basis, we cannot effect any transactions in your account without obtaining prior consent. Our authority over your account(s) shall continue until our engagement is terminated. We offer investment management and financial planning services as part of our standard investment advisory engagement. However, we may also be engaged to provide financial services on a separate fee basis. When we provide financial planning, we rely upon the information provided by the client for our financial analysis and do not verify any such information while providing this service. We also offer an automated investment program (the “Program”) through which clients are invested in a range of investment strategies we have constructed and manage, each consisting of a portfolio of exchange-traded funds and a cash allocation. Our representatives are also available to assist Program participants. We do not limit the scope of our investment advisor services to proprietary products or a limited group or type of investment.
Additional Information: For more detailed information about our Advisory Business and the Types of Clients we generally service, please See Items 4 and 7, respectively in our ADV Part 2A.
Conversation Starters: Given my financial situation, should I choose an investment advisory 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 qualifications mean?
ITEM 3 – FEES, COSTS, CONFLICTS, AND STANDARD OF CONDUCT
What Fees will I pay?
We provide our investment advisory services on a fee basis. When engaged to provide investment management services, we shall charge a fee calculated as a percentage of your assets under our management (our “AUM Fee”). Our annual AUM Fee is negotiable, but will generally range from 0.65% to 1.00% of assets under management for equity portfolios and 0.65% for fixed income, mutual fund and exchange traded fund portfolios. Our annual fee for Program participation shall not exceed 1.00%, inclusive of sponsor fees. We, in our sole discretion, may reduce our investment management fee, charge a flat fee, or reach some other mutually agreeable fee arrangement based upon certain criteria as described in our disclosure brochure. We typically deduct our AUM Fee from one or more of your accounts on a quarterly basis, in advance, based upon the market value of the assets on the last day of the previous business quarter. Because our AUM Fee is generally calculated as a percentage of your assets under management, the more assets you have in your advisory account, the more you will pay us for our investment management services. Therefore, we have an incentive to encourage you to increase the assets maintained in accounts we manage. Fees for limited consulting services shall be negotiated with the client based upon the scope and complexity of the engagement, although we typically charge $250 on an hourly rate basis. We generally require a minimum account size of $500,000 for investment advisory services. We do not have a minimum fee amount.
Other Fees and Costs: Your investment assets will be held with a qualified custodian. Custodians generally charge brokerage commissions and/or transaction fees for effecting certain securities transactions. In addition, relative to all mutual fund and fixed income security transaction fees, certain charges will be imposed at the fund level (e.g., management fees and other fund expenses). Custodians may also charge additional administrative or service fees in accordance with their posted fee schedules. 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.
Additional Information: For more detailed information about our fees and costs related to our management of your account, please See Item 5 in our ADV Part 2A.
Conversation Starters: 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 acting as my investment adviser?
When we act as your investment adviser, 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 can affect the investment advice we provide you. As an example, we may recommend a particular custodian to custody your assets, and we may receive support services and/or products from that same custodian, certain of which assist us to better monitor and service your account while a portion may be for the benefit of our firm. We may also recommend that you roll over your retirement plan assets into an account managed by us and in which we may earn new or, an increase in, current compensation as a result of the rollover.
How do your financial professionals make money? How else does your firm make money and what conflicts of interest do you have?
Our financial professionals are compensated on a salary basis. Our financial professionals also receive a profit-sharing retirement account contribution. You should discuss your financial professional’s compensation directly with your financial professional.
ITEM 4 – DISCIPLINARY HISTORY
Do you or your financial professionals have legal or disciplinary history?
No. We encourage you to visit www.Investor.gov/CRS to research our firm and our financial professionals. Furthermore, we encourage you to ask your financial professional to inquire about us.
Conversation Starters: As a financial professional, do you have any disciplinary history? If so, for what type of conduct?
ITEM 5 – ADDITIONAL INFORMATION
Additional information about our firm is available on the SEC’s website at www.adviserinfo.sec.gov. You may contact our Chief Compliance Officer, Eric Sven Eklof, Jr., at any time to request a current copy of your ADV Part 2A or our Relationship Summary. Our Chief Compliance Officer may be reached by phone: (802) 658‐2668.
Conversation Starters: Who is my primary contact person? Is he or she a representative of an investment adviser or broker-dealer? Who can I talk to if I have concerns about how this person is treating me?
A copy of our Part 2A is available at: https://files.adviserinfo.sec.gov/IAPD/Content/Common/crd_iapd_Brochure.aspx?BRCHR_VRSN_ID=827609
Current ADV Part 2A & 2B Information:
This brochure provides information about the qualifications and business practices of Hanson & Doremus Investment Management (the “Registrant”). If you have any questions about the contents of this brochure, please contact us at (802) 658-2668 or hansondoremus.com. 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.
Hanson & Doremus Investment Management (referred to as “HDIM”) maintains physical, electronic, and procedural safeguards that comply with federal standards to protect its clients’ nonpublic personal information (“information”). Through this policy and its underlying procedures, HDIM attempts to secure the confidentiality of customer records and information and protect against anticipated threats or hazards to the security or integrity of customer records and information.
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HANSON & DOREMUS INVESTMENT MANAGEMENT
Hanson & Doremus Investment Management(“Hanson & Doremus”) maintains physical, electronic, and procedural safeguards that comply with federal standards to protect its clients’ nonpublic personal information (“information”). Through this policy and its underlying procedures, Hanson & Doremusattempts to secure the confidentiality of customer records and information and protect against anticipated threats or hazards to the security or integrity of customer records and information.
It is the policy of Hanson & Doremusto restrict access toand/or the sharing ofall current and former clients’ information (i.e., information and records pertaining to personal background[including social security number and address],investment objectives, financial situation, financial planning issues, tax information/returns, investment holdings, account numbers, account balances, etc.) to those employees and affiliated/nonaffiliated entities who need to know that information in furtherance of theclient’s engagement of Hanson & Doremus.
Hanson & Doremus shall disclose, as necessary, the client’s information: (1) to unaffiliated service providers and vendors in furtherance of establishing, maintaining, and reporting on the client’s Hanson & Doremus relationship (i.e., broker-dealer, account custodian, record keeper, technology, performance reporting, customer relationship management software [CRM], proxy voting, insurance, independent managers, sub-advisers, etc.); (2) required to do so by judicial or regulatory process; or (3) otherwise permitted to do so in accordance with applicable federal and/or state privacy regulations.However, Hanson & Doremus does not, and shall not, disclose or share information with any affiliated or unaffiliated persons, entities or service providers for marketing or any other purposes or reasons not referenced above.
ANY QUESTIONS OR CONCERNS: Should you have any questions regarding the above, please contact Eric Sven Eklof Jr., Chief Compliance Officer.
In accordance with the requirements of United States SEC Rule 206(4)-6 under the Investment Advisers Act of 1940 (the “Advisers Act”) and the Canadian Securities Act R.S.O. 1990 Chapter S5, and the regulations promulgated under the Canadian Securities Act RRO 1990, Regulation 1015 General, Hanson & Doremus Investment Management (“Hanson & Doremus”) has adopted the following proxy voting policy
with respect to those assets for which a client has vested Hanson & Doremus with discretionary investment management authority (the “assets”).
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PROXY VOTING POLICY
Registrant has retained the use of third-party service provider/agents, (i.e. Institutional Shareholder Services (“ISS”), Broadridge Investor Communication Solutions, Inc. (“BICS”) and/or other third-party service provider/agents) to execute these policies. Information regarding the third-party proxy voting service provider/agent is available upon request as well. Unless a client directs otherwise, in writing, Hanson & Doremus or its third-party service provider/agent shall be responsible for: (1) directing the
manner in which proxies solicited by issuers of securities beneficially owned by the client shall be voted, and (2) making all elections relative to any mergers, acquisitions, and tender offers. Hanson & Doremus and/or the client shall correspondingly instruct each custodian of the assets to forward to Hanson & Doremus, or its third-party service provider/agent, copies of all proxies and shareholder communications relating to the assets. Absent mitigating circumstances and/or conflicts of interest (to the extent any such
circumstance or conflict is presented, if ever, information pertaining to how Hanson & Doremus or its third-party service provider/agent addressed any such circumstance or conflict shall be maintained by Hanson & Doremus – see examples below), it is Hanson & Doremus’s general policy to vote proxies
consistent with the recommendation of the senior management of the issuer. Hanson & Doremus shall monitor corporate actions of individual issuers and investment companies consistent with Hanson & Doremus’s fiduciary duty to vote proxies in the best interests of its clients. With respect to individual
issuers, Hanson & Doremus may be solicited to vote on matters including corporate governance, adoption or amendments to compensation plans (including stock options), and matters involving social issues and
corporate responsibility. With respect to investment companies (e.g., mutual funds), Hanson & Doremus may be solicited to vote on matters including the approval of advisory contracts, distribution plans, and mergers. Hanson & Doremus or its third-party service provider/agent shall maintain records pertaining to proxy voting as required pursuant to United States SEC Rule 204-2 (c)(2) under the Advisers Act as well as the Canadian Securities Act R.S.O. 1990 Chapter S5, and the regulations promulgated under the Canadian
Securities Act RRO 1990, Regulation 1015 General.
Copies of United States SEC Rules 206(4)-6 and 204-2(c)(2) and the Canadian Securities Act R.S.O. 1990 Chapter S5, and the regulations promulgated under the Canadian Securities Act RRO 1990, Regulation
1015 General are available upon written request. In addition, information pertaining to how Hanson & Doremus or its third-party service provider/agent voted on any specific proxy issue is also available upon written request. Any questions regarding Hanson & Doremus’ proxy voting policy shall be directed to Eric Sven Eklof Jr., Chief Compliance Officer of Hanson & Doremus at (802) 658-2668.
MITIGATING CIRCUMSTANCES/CONFLICTS OF INTEREST
The following are examples of mitigating circumstances and/or conflicts of interest: (1) an adviser or its affiliate may manage a pension plan, administer employee benefit plans, or provide brokerage, underwriting, insurance, or banking services to a company whose management is soliciting proxies; (2) an
adviser may have business or personal relationships with participants in proxy contests, corporate directors, or candidates for directorships, etc.; (3) an adviser has a business relationship not with the company but with a proponent of a proxy proposal that may affect how it casts votes on client securities; and (4) senior management’s recommendation, in the opinion of Hanson & Doremus, is not in the best interests of the client.
PRE-POPULATION OF VOTING PROXIES/ENGAGEMENT OF A PROXY
In the event that Hanson & Doremus pre-populates clients’ votes (in conjunction with ISS/BICS, or such other proxy voting vendor that Hanson & Doremus may engage), and Hanson & Doremus (or its proxy voting vendor) becomes aware that subsequent to submission of Hanson & Doremus’ votes, the proxy issuer publishes new material information prior to the voting submission deadline, Hanson & Doremus (in conjunction with ISS/BICS, or such other proxy voting vendor that Hanson & Doremus may engage), shall
determine that it (or the proxy firm that it engages) has the ability to react to, and address, whether such additional information requires a vote change. Policy: If, subsequent to completion of the Firm’s voting process, the proxy issuer publishes new material information, such information will be reviewed by the Hanson & Doremus Investment Committee (or proxy vendor that Hanson & Doremus engages), and a determination will be made if a change in the Firm’s prior vote is necessary. If a vote change is determined necessary, Hanson & Doremus (or ISS/BICS, or such other engaged vendor), shall make the revised vote prior to the submission deadline.
Eric Sven Eklof Jr., Chief Compliance Officer, or his designee shall be primarily responsible for determining how client proxies are voted and recording how Hanson & Doremus addressed any mitigating circumstance or conflict of interest. Mr. Eklof shall be primarily responsible for the ongoing review and
evaluation of Hanson & Doremus’s proxy voting policy and corresponding compliance with the requirements of United States SEC’s Rules 206(4)-6 and 204-2(c)(2) and the Canadian Securities Act R.S.O. 1990 Chapter S5, and the regulations promulgated under the Canadian Securities Act RRO 1990,
Regulation 1015 General. Copies of the Rules can be attached and made a part hereof.
The above Proxy Voting Policy was initially adopted by Hanson & Doremus Investment Management on the first day of March 2019, and amended in March 2021 to reflect the July 2020 SEC proxy voting amendment relative to pre-population above.
Fair Funds Notice
With the Sarbanes-Oxley Act of 2002, The U.S. Securities and Exchange Commission (SEC) established the ability to create Fair Funds. A Fair Fund enables the SEC to distribute money to investors in cases where companies are found to have violated securities regulations due to illegal or unethical behavior.
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A Fair Fund is separate and independent from any Class Action Lawsuits, which are civil lawsuits brought on behalf of a group of people or businesses. Fair Fund money comes from fines and other penalties levied by the SEC.
Hanson+Doremus is unable to file Fair Fund claims on behalf of clients. Clients who may qualify for distributions from a Fair Fund will receive notice and informational material directly from the SEC and must file a claim with the SEC to participate, pursuant to SEC instructions. However, Hanson+Doremus can assist you by providing security ownership documentation or other supporting information for your claim.
It is important to note that while we are unable to file Fair Fund claims for clients, we will continue to use communications company Broadridge to process Class Action filings.
Please contact our office at 802-658-2668 if you have any questions.
FOR FURTHER CLARIFICATION
If you have any questions regarding Fair Funds, do not hesitate to contact Alma Pilausic (email@example.com) or Eric Sven Eklof Jr. (firstname.lastname@example.org).