Business Continuity Plan
Lakeside Advisors, Inc.
Business Continuity Plan
1. Emergency Contact Persons
Our firm's emergency contact persons are: Robert E. Frey Jr., CFP (Telephone 206 285-1730; 206-940-6426). The name will be updated in the event of a material change.
II. Firm Policy
Our firm's policy is to respond to a Significant Business Disruption (SBD) by safeguarding employees' lives and firm property, making a financial and operational assessment, quickly recovering and resuming operations, protecting all of the firm's books and records, and allowing our clients to transact business. In the event that we determine we are unable to continue our business, we will assure clients prompt access to their funds and securities.
A. Significant Business Disruptions
Our plan anticipates two kinds of Significant Business Disruptions (SBDs), internal and external. Internal SBDs affect only our firm's ability to communicate and do business, such as a fire in our building. External SBDs prevent the operation of the securities markets or a number of firms, such as a terrorist attack, a city flood, or a wide-scale, regional disruption. Our response to an external SBD relies more heavily on other organizations and systems, especially on the capabilities of our clearing and custody firms.
B. Approval and Execution Authority
Robert E. Frey Jr., President, is responsible for approving the plan and for conducting the required annual review. Robert E. Frey Jr. has the authority to execute this BCP as well.
C. Plan Location and Access
Our firm will maintain copies of its BCP plan and the annual reviews, the changes that have been made to it, and the result of our BPC testing for inspection. An electronic copy of our plan is located on http://www.Lakeside Advisors.com in the “Business Continuity Plan" folder and in the repository service of FMG Suite.
D. Training
All employees must receive training at least once a year. Our firm will maintain the record of when the training is provided and the copies of training materials.
III. Business
Description
Our firm conducts business in equity, fixed income, and derivative securities. Our firm is a registered investment advisory firm working through a broker-dealer, Pershing Advisor Solutions (PAS). PAS is a wholly owned subsidiary of BNY Mellon an affiliate of Pershing, LLC (Pershing), which provides clearing and custody services for our clients. We do not hold clients' funds or securities. We accept and enter orders. All transactions are sent to our clearing firm, Pershing, which executes our orders, compares them, allocates them, clears and settles them. Pershing also maintains our clients' accounts, can grant clients access to them, and delivers funds and securities. Our firm services individual and institutional clients. We do not engage in any private placements.
IV. Office Locations
Our Firm has offices located in Location #1 and Location #2.
A. Office Location #1
Our Location #1 Office is located at 1115 East Denny Way, Seattle, Washington 98122 2427. Its main telephone number is 206-285-1730; 1-800-262-3739. Our employees may travel to that office by means of foot, car or bus. We engage in order taking and entry, as well as all other business activities at this location.
B. Office Location #2
Our Location #2 Office is located at 18614 8th Avenue SW, Normandy Park, WA 98166. Its main telephone number is (206) 439-7123. Our employees may travel to that office by means of car or bus. We engage in order taking and entry at this location.
V. Alternative Physical Location(s) of Employees
In the event of an SBD, we will move our staff from the affected offices to the closest of our unaffected office locations. Both office locations are capable of providing uninterrupted business activities. As an example, Robert E. Frey Jr. (Office Location #2) has a permanently installed, automatic 18 KVA generator which is powered by natural gas and several different Internet connections, including wireless. In addition to alternate office locations, authorized employees are equipped with remote access capabilities allowing them to access the company systems remotely through a secured gateway to work from their homes. We provide authorized employees a company approved device with secure VPN access.
VI. Evacuation Plan
In the event of an SBD which requires evacuation from our Denny office, our employees and visitors in the Denny office will meet at the Cal Anderson Park located at 1635 11th Avenue, Seattle, WA 98122.
Fire extinguishers are located at the front door, at the back door, and in the kitchen area in the office.
VII. Clients' Access to Funds and Securities
Our firm does not maintain custody of clients' funds or securities, which are held at our clearing firm, Pershing LLC. In the event of an internal or external SBD, if telephone service is available, we will take clients orders or instructions and contact Pershing on their behalf. If no telephone service or web access is available to us, clients may contact PAS directly to process limited trade-related transactions, cash disbursements and security transfers. Instructions must be in writing and transmitted via fax or postal service as follows:
Pershing Advisor Solutions
P.O. Box 2065 Jersey City, NJ 07303-2065
Fax: (866) 355-5571
For additional information about how to request funds and securities when our firm cannot be contacted due to SBD, please call Pershing at (201) 413-3635 for recorded instruction.
VIII. Data Back-Up and Recovery (Hard Copy and Electronic)
Our firm maintains primary hard copy of the firm's financial books and records and its electronic records at 1115 East Denny Way, Seattle, Washington 98122-2427, as well as electronic copies on cloud servers owned by a company called Smart Vault. Robert E. Frey Jr., is responsible for the maintenance of these books and records.
Our firm maintains personal client information, advisory books and records, these are not transmitted to Pershing. Our firm maintains back-up hard copy of the firm's financial books and records at the home of Robert E. Frey Jr., where there is a specially constructed vault. These records are paper copies, microfilm, and portable disks. Susan L. O'Leary (Accountant) keeps electronic copies of our firm's financial books and records as well on servers maintained by QuickBooks (Intuit).
The firm backs up its electronic records every hour between 8 am and 8 pm daily on a western digital USB hard drive maintained at an office site. Its electronic records are also backed up daily at an off-site location. Electronic records backed up at an off-site location are also backed up once a week at a cloud server. The majority of our critical data is stored and filed on SmartVault cloud as well as Pershing's internal and redundant storage spread over at least three locations.
In the event of an internal or external SBD that causes the loss of our records, we will recover them from our back-up site. If our primary site is inoperable, we will continue operations from our back-up site or alternate locations.
IX. Financial and Operational Assessments
A. Operational Risk
Operational risk includes the firm's ability to maintain communications with clients and to retrieve key activity records through its mission critical systems.
In the event of an SBD, we will immediately identify what means will permit us to communicate with our clients, employees, critical business constituents, critical banks, critical counter-parties, and regulators. Although the effects of a SBD will determine the means of alternative communication, the communications options we will employ will include our website, forwarding telephone land lines to cellular lines and landlines at one of our alternate locations, and voicemail. Systems at our location #2 are fully portable and operational in any environment that includes an internet connection. Our location #2 is equipped with generator and perpetual fuel in the form of natural gas. In addition, we will retrieve our key activity records as described in the section above, Data Back-Up and Recovery (Hard Copy and Electronic).
B. Financial and Credit Risk
Financial risk involves the firm's ability to fund operations and maintain adequate financing and sufficient capital. The firm also may face credit risk (where its investments may erode from the lack of liquidity in the broader market), which would also hinder the ability of the firm's counter-parties to fulfill their obligations.
In the event of an SBD, we will determine the value and liquidity of our investments and other assets to evaluate our ability to continue to fund our operations and remain in capital compliance. Because the firm has no debt and maintains a strong balance sheet, there should always be sufficient capital to meet our obligations to counter-parties.
X. Mission Critical Systems
Our firm's “mission critical systems" are maintained and provided through our relationship with PAS / Pershing. These systems ensure prompt and accurate processing of securities transactions, including order taking, entry, execution, comparison, allocation, clearance and settlement of securities transactions, the maintenance of clients' accounts, access to clients' accounts, and the delivery of funds and securities.
Though our internal systems are critical in the sense of performance reporting, billing and documentation, and communications they are “fed” by the external systems described above and are not required to perform the tasks identified in the previous paragraph.
Our internal systems programs and data are replicated on a Western Digital USB hard drive at our primary location. Data is maintained or backed up every hour between 8 am to 8 pm.
We have primary responsibility for establishing and maintaining our business relationships with our clients and have sole responsibility for our mission critical functions of order taking, and entry for execution. Pershing provides, by contract, the execution, comparison, allocation, clearance and settlement of securities transactions, the maintenance of clients' accounts, access to clients' accounts, and the delivery of funds
and securities.
Pershing also maintains a business continuity plan and the capacity to execute that plan. Pershing represents that it will advise us of any material changes to its plan that might affect our ability to maintain our business. In the event Pershing executes i represents that it will notify us of such execution and will provide us equal access to services as its other clients. If we reasonably determine that Pershing has not or cannot put its plan in place quickly enough to meet our needs, or is otherwise unable to provide access to such services, Pershing represents that it will assist us in seeking services from an alternative source.
Pershing represents that it backs up our records at remote sites. Pershing also represents that it operates a back-up operating facility in geographically separate areas with the capability to conduct the same volume of business as its primary site. Pershing has also confirmed the effectiveness of its back-up arrangements to recover from a wide scale disruption by testing, and it has confirmed that it tests its back-up arrangements frequently
Recovery-time objectives provide concrete goals to plan for and test against. They are not, however, hard and fast deadlines that must be met in every emergency situation, and various external factors surrounding a disruption, such as time of day, scope of disruption, and status of critical infrastructure-particularly telecommunications can affect actual recovery times. Recovery refers to the restoration of clearing and settlement activities after a wide-scale disruption; resumption refers to the capacity to accept and process new transactions and payments after a wide-scale disruption.
A. Our Firm's Mission Critical Systems
1. Order Taking
Currently, our firm receives orders from clients via telephone/fax/e-mail/in person visits by the clients. During an SBD, either internal or external, we will continue to take orders through any of these methods that are available and reliable, and in addition, as communications permit, we will inform our clients when communications become
available to tell them what alternatives they have for sending their orders to us. Clients will be informed of alternatives by any means possible. If necessary, we will advise our clients to place orders directly with Pershing. Information regarding contacting Pershing in case of SBD is described at Section VII Clients' Access to Funds and Securities in our BCP.
2. Order Entry
Currently, our firm enters orders by recording them on paper and electronically and sending them to Pershing electronically or telephonically.
In the event of an internal SBD, we will enter and send records to Pershing by the fastest alternative means available, which include electronically, telephonically, and fax. In the event of an external SBD, we will maintain the order in electronic or paper format, and deliver the order to the clearing firm by the fastest means available when it resumes operations. In addition, during an internal SBD, we may need to refer our clients to deal directly with Pershing for order entry.
3. Order Execution
We currently execute orders by internet connection and telephone. In the event of an internal SBD, we would continue to enter orders via cellular telephone. In the event of an external SBD, we would use whatever means are possible.
4. Other Services Currently Provided to Clients
We manage account portfolios on a discretionary basis. In the event of an internal and external SBD, we would deliver our orders as specified above.
B. Mission Critical Systems Provided by Our Clearing Firm
Our firm relies, by contract, on Pershing to provide order execution, order comparison, order allocation, and the maintenance of clients' accounts, delivery of funds and securities, and access to clients' accounts. Please see information regarding client support for PAS in the event of SBD at Appendix A.
XI. Alternate Communications Between the Firm and Clients,
Employees, and Regulators
A. Clients
We communicate with our clients using the telephone, e-mail, fax, U.S. mail, and in person visits at our firm or at the other's location. In the event of an SBD, we will assess which means of communication are still available to us, and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party. For example, if we have communicated with a party by e-mail but the Internet is unavailable, we will call them on the telephone and follow up where a record is needed with paper copy in the U.S. mail.
B. Employees
We communicate with our employees using the telephone, text, e-mail, and in person. In the event of an SBD, we will assess which means of communication are still available. We will also employ a call tree so that senior management can reach all employees during an SBD. The call tree includes all staff home, cellphone, and office phone numbers. We have identified persons, noted below, who live near each other and may reach each other in person:
The person to invoke use of the call tree is Robert E. Frey. ECU
Caller Robert E. Frey (A) Call Recipients Person B, Person C, Person D
Kristi A. Mandt (B) Person A, Person C, Person D
Miki Okamoto-Swanson (C) Person A, Person B, Person D
Veronika Y. Dolgikh (D) Person A, Person B, Person C
C. Regulators
We communicate with our regulators using the telephone, e-mail, fax, U.S. mail, and in person. In the event of an SBD, we will assess which means of communication are still available to us, and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party.
XII. Critical Business Constituents, Banks, and Counter-Parties
A. Business constituents
We have contacted our critical business constituents (businesses with which we have an ongoing commercial relationship in support of our operating activities, such as vendors providing us critical services), and determined the extent to which we can continue our business relationship with them in light of the internal or external SBD. We will quickly establish alternative arrangements if a business constituent can no longer provide the needed goods or services when we need them because of a SBD to them or our firm. Our major suppliers are: CenturyLink, Comcast and Advent Software.
B. Banks
We have sufficient capital to never need bank financing in light of the internal or external SBD. Our operating accounts are maintained at Pershing & Pacific Premier Bank.
C. Counter-Parties
We have contacted critical counter-parties, such as other broker-dealers or institutional clients, to determine if we will be able to carry out our transactions with them in light of the internal or external SBD. Where the transactions cannot be completed, we will work with Pershing or contact those counter-parties directly to make alternative arrangements to complete those transactions as soon as possible.
XIII. Disclosure of Business Continuity Plan
Our BCP is available on our Web site (http://www.Lakeside Advisors.com). We will also mail it to clients upon request. Our summary discloses the existence of back-up facilities and arrangements.
XIV. Updates and Annual Review
Our firm will update this plan whenever we have a material change to our operations, structure, business or location or to those of our clearing and custody firms. In addition, our firm will review this BCP annually, to modify it for any changes in our operations, structure, business, or location or those of our clearing and custody firms.
XV. Senior Officer Approval
I have approved this Business Continuity Plan as reasonably designed to enable our firm to meet its obligations to clients in the event of an SBD
Signed:
Date: 4/26/2011 Robert E. Frey, President, Chief Compliance Officer
Client Support
In the event that your investment advisor experiences a significant business interruption, you may contact Pershing Advisor Solutions LLC directly to process limited trade-related transactions, cash disbursements and security transfers. Instructions must be in writing and transmitted via facsimile or postal service as follows:
Pershing Advisor Solutions
P.O. Box 2065 Jersey City, NJ 07303-2065
Fax: (866) 355-5571
Please note that the fax number above is for business interruption-related issues only, and should not be used for any other purposes, such as change of address notices, account transfers and credit verification. Information received on this fax that is unrelated to business interruption issues will not be acted upon.
For additional information about how to request funds and securities when your financial organization cannot be contacted due to a significant business interruption, refer to the information below or dial the following Pershing telephone number (201) 413-3635 for recorded instructions. If you cannot access the instructions from the previously noted number, you may call (213) 624-6100, extension 500, an alternate number for recorded instructions. The specific transactions Pershing will perform for clients of our introducing firms, and the required accompanying information, are as follows:
I. Trades Pershing will process the following closing security transactions:
- Sale of security position held long in the client's account
- Buy of security to close-out short security position
Pershing will process closing security transactions upon receipt of written instructions that must include the following information: Client brokerage account number Client name (as registered on the brokerage account)
- Security description, including symbol or CUSIP number
Number of shares Note: All orders will be handled as market orders.
II. Cash Disbursements
Pershing will process cash disbursements upon receipt of signed written instructions that must include the following information:
- Client brokerage account number
- Client name (as registered on the brokerage account)
Exact amount to be disbursed
- Method of disbursement (as follows), and provide the information indicated:
- a) Check - Indicate name and address of record check is to be mailed to
b) Federal Funds - Indicate receiving bank name, ABA number and receiving bank account number Note: The receiving bank account name and brokerage account name must be identical unless we have a letter of authorization on file indicating alternate instructions.
III. Securities Transfers
Pershing will process security transfer requests upon written instruction that must include the following information:
- Client brokerage account number
- Client name (as registered on the brokerage account)
- Description of security(ies) to be transferred, including symbol(s) or CUSIP number(s)
Quantity to be transferred
- Receiving account information for securities, as follows: a) Transfer to another brokerage account at Pershing
- Provide receiving account number at Pershing (name and address on both accounts must be the same) b) Transfer to another financial organization
- Name of the receiving financial organization - DTC number (if the receiving financial organization is a registered broker-dealer) - Name of the receiving financial organization.
Schedule of Maximum Charges
Available here is the schedule of maximum charges for services provided by Pershing Advisor Solutions LLC. Your investment advisor may have negotiated lower rates on your behalf. Please contact your investment advisor should you have any questions or would like more detail regarding the charges being applied to your account(s).
Terms and Conditions
Please refer to this copy or contact your advisor for more information.
March 2018
2019 Advisor Solutions. Advisor Solutions refers to the brokerage services business of Pershing Advisor Solutions LLC and/or the bank custody solutions business of BNY Mellon, N.A.
Pershing Advisor Solutions LLC, member FINRA, SIPC, is a subsidiary of The Bank of New York Mellon Corporation (BNY Mellon). Clearing, brokerage custody or other related services may be provided by Pershing LLC, member FINRA, NYSE, SIPC. Pershing Advisor Solutions relies on its affiliate Pershing LLC to provide execution services. Bank custody and private banking solutions are provided by BNY Mellon. National Association (BNY Mellon, N.A.), member FDIC, a wholly owned subsidiary of The Bank of New York Mellon Corporation.
Pershing LLC, Pershing Advisor Solutions LLC and BNY Mellon, N.A. Bank Custody Solutions do not provide investment advice. Affiliated investment advisory services, it offered, are provided by Lockwood Advisors, Inc. (Lockwood), a Pershing affiliate and an investment adviser registered in the United States under the Investment Advisers Act of 1940.
For professional use only. Not intended for use by the general public. Trademark(s) belong to their respective owners.