Regulation Best Interest Disclosure

Effective August 26, 2024                                                                                                                                               

This Regulation Best Interest (“Reg BI”) Disclosure Statement (“Reg BI Disclosure Statement”) provides information about Haverkamp Investments, Inc.  (“HI,” “us,” “our,” or “we”), specifically in our capacity as a broker-dealer. HI 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”). Our goal is to provide you with the information you need to make informed investment decisions. We encourage you to review this information carefully, along with any applicable account agreement(s), disclosure documentation, or other materials you receive from us. We reference various other documents throughout this disclosure, which have either been or will be provided to you, as applicable, based on you engaging in certain brokerage investment activities with us.  If you would like a copy of any of these documents, please ask us. You should contact us promptly at (515) 309-6414 if you do not fully understand or have questions about the disclosures in this document—or other disclosure documents you receive from us—or the essential facts of your brokerage relationship with us and conflicts of interest we face.

OVERVIEW OF THIS REG BI DISCLOSURE STATEMENT

This Reg BI Disclosure Statement provides information regarding the material facts relating to the scope and terms of the brokerage services we offer and the material facts and conflicts of interest that arise through our delivery of brokerage services. This Reg BI Disclosure Statement discusses the material fees and costs that apply to the brokerage services we offer, including the costs of placing and maintaining brokerage accounts with us; the type and scope of services we provide, including any material limitations on the securities or investment strategies involving securities we recommend; the basis for and risks associated with our recommendations; and material facts relating to conflicts of interest associated with our recommendations. This Reg BI Disclosure Statement is current as of the date above. The most up-to-date version is available on this page. If we make changes that would require us to send you updated disclosures, we will send them to you by mail or electronically consistent with your delivery elections and the SEC’s requirements. We may amend this document from time to time and you will be bound by the amended disclosures if you receive our services after we deliver the amended disclosures to you. You will also be subject to additional terms, conditions and disclosures in additional agreements, documents, and other disclosures we send you from time to time including but not limited to your Investor Questionnaire and Customer Agreement. Statements in this document expound on and provide more definitive information on matters discussed in our Form CRS (which is a summary in nature and limited in substance and size by the SEC). The statements made in this document are subject to the more complete terms and conditions of our Customer Agreement and other disclosures we provide. This Reg BI Disclosure Statement should be read together with your subscription agreement and the other disclosures and documents we provide or reference. For additional information regarding HI and its brokerage services, including disciplinary events, please visit brokercheck.finra.org, or please see our Form CRS and your individual brokerage agreements. You can also request information from your HI registered representative.

As you read the information in this disclosure, it is important for you to consider and understand the following:

•    This disclosure is intended to comply solely with our obligations under Regulation Best Interest (Rule 15l-1 under the Securities and Exchange Act of 1934), and, in certain cases, with other regulatory disclosure requirements.

•    This disclosure does not otherwise change, alter or modify our other obligations under the federal securities laws, nor does this disclosure otherwise change, alter or modify the terms and conditions of any agreement(s) you enter into with us.

 •   Our obligations under Regulation Best Interest apply only when we recommend a type of account, a securities transaction, an investment strategy involving securities in your brokerage account, or recommend that you roll over or transfer assets from one type of account to another (e.g., a workplace retirement plan account to an IRA). Our obligations under Regulation Best Interest do not extend to other dealings we have with you, including when we execute transactions where we have not made a recommendation, where you deviate from our recommendation(s), how we market securities and our services, or in determining the fees we charge.

•    Our obligations under Regulation Best Interest do not extend beyond a particular recommendation, nor do they create an ongoing duty to you, or impose on us any duty to monitor your brokerage account or to monitor specific investments in your brokerage account.

OUR AFFILIATED ENTITIES

Haverkamp Group:  Haverkamp Group is a collection of companies focused on multifamily development, acquisitions, design, construction management and property management.  The 100% owner of Haverkamp Group, Brent Haverkamp is also 99.8% owner of Haverkamp Investments.

Haverkamp Properties:  Property management company.

Haverkamp Construction: Construction company.

Haverkamp Farm Management:  Farmland acquisition.

Outdoor Escapes:  Landscape, design and snow removal.

Practic Design: Architectural design.

SCOPE AND TERMS OF OUR RELATIONSHIP WITH YOU

OUR CAPACITY

We offer brokerage service to sophisticated retail investors through offerings of private placements.  HI does not offer traditional retail brokerage services.  You will not be asked to “open” an account with HI whereby we custody your funds and securities, nor do we offer account monitoring services. 

Our Firm and registered representatives do not monitor the performance of any investment after an investment is purchased, including those investments we recommend to you.  Periodically, we may voluntarily review private placement investments you have transacted through our Firm, to determine whether to provide additional recommendations. 

There may be minimum requirements for investment size in the private placements we offer, which are set by the issuer and can be found in the applicable offering documents.  We do not set any minimum investment requirements beyond what the issuer has established.

In our capacity as a broker-dealer, we are paid for our services through a fee paid by the issuer which is generally calculated as a percentage of the amount of the offering that we sell.

We will not provide you with personalized advice based on your overall portfolio as to whether you should make or continue to hold a particular investment or as to which types of investments may be better suited for you. You are responsible for the ultimate decisions regarding the purchase or sale of any securities. We do not render advice regarding financial, legal, accounting, regulatory, tax or other matters. You should consult your own financial, legal, accounting, tax and other appropriate advisors regarding how any investments fit within your overall investment portfolio and financial plan. 

In our capacity as a broker-dealer, we can make recommendations to you as to which private placement that we are currently offering may be better suited to your investment objectives.  We can also provide you with the private placement memorandum and other offering and marketing documents related to the investment you are considering. 

UNDERSTANDING RISK

While we will take reasonable care in developing and making recommendations to you, investing in securities involves risk, and you may lose money, including your entire investment capital. The investment performance and the success of any particular investment is never guaranteed, and the value of your investments will fluctuate due to market conditions and other factors. There is no guarantee that you will meet your investment goals.  You should consider that some investments involve more risk than other investments. Higher-risk investments, such as private placements, have the potential for higher returns but also for significant losses. The lower your “risk tolerance,” meaning the amount of risk or loss you are willing and able to accept to achieve your investment goals, the more we encourage you to avoid higher-risk investments, as these investments pose the potential for significant losses. Before making any investment decision, it is your responsibility to fully understand the investment and the associated risks. Please consult any available offering documents for any private placement we recommend for a discussion of the risks associated with the product. We can provide those documents to you or help you to find them.  We do not offer any guarantees that any investment recommendations will be profitable. Moreover, you should note that past performance is not a guarantee of future results

BASIS FOR A RECOMMENDATION

When making a brokerage recommendation, we begin by gaining an understanding of your financial situation, investment objectives and goals, and tolerance for investment risk. This is commonly known as your investment profile and includes information that you disclose to us such as your income, age, number of dependents, net worth, liquid net worth, investment experience, investment preference, and time horizon. Your investor profile information provides us with a framework for evaluating whether private placements are a suitable part of your investment portfolio.  You should understand that there is no single “best” investment for any particular situation. You make the ultimate decision whether to follow our recommendation to invest in a particular private placement, and it is your responsibility to notify us of any changes to your investor profile.

MATERIAL LIMITATIONS

We are a limited purpose broker-dealer, and our Firm and registered representatives do not provide a wide range of brokerage services.  The following describes the material limitations on our services and the services of our registered representatives. 

No Account Monitoring:  As noted previously, our Firm and registered representatives do not monitor your investments after purchase, including those investments our registered representatives recommend.  Periodically, we may voluntarily review private placement investments you have transacted through our Firm, to determine whether to provide additional recommendations.  While our registered representatives remain available to assist you, they do not monitor your investment performance after effecting a securities transaction for you, or otherwise at any time. In all cases you are responsible for deciding whether to continue holding investments in your portfolio. 

Investment Limitations:  We only offer private placements for investment opportunities.  Our Firm does not offer traditional brokerage services, which commonly include the buying and selling of publicly traded stocks and bonds, options, mutual funds, ETFs, and futures.  Additionally, at times we will only have one private placement opportunity available to you.  As a result, at those times we will not have an alternative investment opportunity for you to consider and may have an incentive to offer an investment opportunity in that single investment.  Not all investment opportunities are suitable for all investors. 

The majority of the private placements we offer are from affiliated issuers.  The managing member of each HI related private placement is Haverkamp Group.  Haverkamp Group is 100% owned by Brent Haverkamp, who also owns 99.8% of HI. 

Certain Regulatory Restrictions:  Before purchasing interests in most “alternative investment funds” such private equity funds (which are “private placements”) you may have to meet certain financial or other thresholds in order to qualify as an “accredited investor,” a “qualified purchaser” and/or a “qualified client,” depending on the specific fund and its requirements. We will inform you if any of these restrictions apply to you.

FEES AND COSTS

This section provides certain information about the material fees and costs associated with your transactions. 

SUMMARY OF COMMISSION-EQUIVALENT CHARGES YOU PAY TO OUR FIRM FOR CERTAIN TRANSACTIONS

Sales Charges:  For private placement investments, instead of charging you a brokerage commission we receive sales charges and similar fees from the funds or their sponsors. We can receive these fees both up-front and in the form of an ongoing compensation for as long as you hold the security. A percentage of those sales charges and ongoing fees are paid by HI to your financial professional, according to their production and our commission grid.

SUMMARY OF OTHER REVENUES PAID TO OUR FIRM AS A RESULT OF YOUR TRANSACTIONS

You may pay us indirectly through compensation we receive from third parties.  Specifically, these payments include:

Education and Marketing Support: Some investment product sponsors contribute to or reimburse our Firm for the cost of educational and marketing events for our clients and registered representatives. Subject to approval by our Firm, product sponsors may also pay for travel, meals, entertainment and attendance at conferences, training events and due diligence trips for our registered representatives, but these payments are not made to our registered representatives directly.

SUMMARY OF EXPENSES YOU PAY FOR CERTAIN TRANSACTIONS

Private placements have direct costs associated with them that you pay indirectly as an investor to the product sponsor. These fees and expenses (often described as the “expense ratio”) will impact investment returns and are fully described in specific investment disclosures provided to you upon purchase. These expenses are typically used to pay continued annual operating expenses of the investment such as management expenses, accounting expenses, audit expenses, servicing expenses, distribution expenses, legal expenses, and recordkeeping expenses.

MATERIAL CONFLICTS OF INTEREST

Like any financial services firm, HI has certain conflicts of interest (conflicts) that relate to the recommendations our Firm and our registered representatives make. For purposes of this Reg BI Disclosure, a conflict of interest essentially means an economic interest that might provide an incentive for a broker-dealer firm or its registered representatives to make recommendations that are not in the best interest of their retail clients. Some of these conflicts exist between the interests of retail clients and our Firm and registered representatives alike. Others exist between the interests of retail clients and our Firm alone, or between the interests of retail clients and registered representatives alone. The section below discloses material facts relating to these conflicts so that you are able to make an informed decision regarding any recommendation we provide to you. Certain products may have unique conflicts of interest. Where applicable, product specific conflicts are discussed within the relevant product under the section entitled Fees and Material Conflicts of Interest Associated with Specific Investments.

CONFLICTS FOR BOTH OUR FIRM AND REGISTERED REPRESENTATIVES

Gifts from Sponsors:  HI registered representatives and other employees sometimes receive non-cash compensation from investment product sponsors that is not in connection with any particular client. This compensation may include such items as gifts valued at less than $100 annually, an occasional dinner or ticket to a sporting or entertainment event, or reimbursement in connection with client events, or marketing or advertising initiatives, including services for identifying prospective clients. These payments provide an incentive for our registered representatives to recommend investment products whose sponsors provide these forms of compensation. To mitigate these incentives, our Firm imposes an internal review and approval process for gifts made to our registered representatives.

Education and Marketing Support: Some investment product sponsors contribute to or reimburse our Firm for the cost of educational and marketing events for our clients and registered representatives. Subject to approval by our Firm, product sponsors may also pay for travel, meals, entertainment and attendance at conferences, training events and due diligence trips for our registered representatives, but these payments are not made to our registered representatives directly.

Registered representatives and Principals of our Firm dual employed by affiliated company (Haverkamp Group):  Registered representatives and Principals of our Firm may have responsibilities or be dual employed at an affiliated company, Haverkamp Group.  This may take away from the time they have to dedicate to HI and its customers. 

CONFLICTS FOR OUR FIRM ALONE

Proprietary Products:  Our Firm, considered together with our affiliates, receives more compensation and other benefits if you select private placements that are issued, sponsored, or managed by us. This creates an incentive for us to make available on our platform, and encourage the purchase of, proprietary private placements over others. To help address this conflict, our registered representatives are paid the same amount for selling proprietary products and third-party products, holding all other variables equal. A list of the proprietary products we offer to retail clients (current as of the effective date of this Reg BI Disclosure) is furnished in the attached Exhibit.

Firm Ownership:  HI and Haverkamp Group share the same owner in Brent Haverkamp.  Brent Haverkamp owns 99.8% of HI and 100% of Haverkamp Group.  Haverkamp Group is the managing member of the affiliated private placements that HI structures and subsequently sells to qualified investors.  Brent Haverkamp is not involved in the day-to-day operations of HI.  Unaffiliated legal counsel is engaged to draft private placement offering memorandum including the risks and conflicts associated with each offering. 

CONFLICTS FOR REGISTERED REPRESENTATIVES ALONE

Conflicts between the interests of retail clients and our registered representatives (but not our Firm) may be caused by a variety of arrangements, including compensation arrangements, retail client-specific arrangements, or outside business activities. The material facts relating to these conflicts, including certain ways our Firm addresses and manages them, are described below:

Production/Compensation Grid:  All employees are paid a salary.  Registered Representatives acting in a sales role are paid a salary plus a 1.75% commission based on dollars subscribed  This does not vary across private placements, but rather is the same for all. 

Other Bonuses and Awards:  HI registered representatives are paid an annual base salary.  Some registered representatives may also receive a guaranteed fixed annual bonus.  Such bonuses are outlined in their employment agreement.  These bonuses do not fluctuate with HI profitability, sales, or market conditions.

Outside Business Activities:  Some of our registered representatives have outside business activities that compete for their time. If your financial professional engages in any outside business activities, these activities can create an incentive for your financial professional to spend more time on the outside business activity rather than on their brokerage relationships with you and other retail clients.

You may research any outside business activities your financial professional may have for which they receive compensation at brokercheck.finra.org. All registered representatives are required to obtain approval from their supervisor prior to engaging in such activities to help ensure the activity does not conflict with their financial professional duties with HI.

FEES AND MATERIAL CONFLICTS OF INTEREST ASSOCIATED WITH SPECIFIC INVESTMENTS

GENERAL OVERVIEW:  RISK OF LOSS

PRIVATE PLACEMENTS

Private placements are generally private (not publicly traded) securities that are exempt from registration under federal securities laws and subject to limited regulatory oversight.  The are intended to complement other portions of the investment portfolios of certain sophisticated investors and to provide opportunities for additional diversification and overall portfolio risk hedging.  Private placements carry risks, including loss of your investment principal.

To avoid registration and application of certain federal securities laws, issuers of private placements often must limit eligible investors to those who fall within one or more of the following categories (who are presumed to have the necessary financial sophistication and resources to accept greater risks, and to be less in need of certain legal protections that attach to most private placements):

•    Accredited Investors – for individual investors, this status generally requires that you either have (1) net worth over $1 million alone or with your spouse/spousal equivalent (excluding the value of your primary residence) or (2) earned income exceeding $200,000 (or $300,000 together with your spouse/spousal equivalent) in each of the two prior years, and reasonably expect the same in the current year.

•    Qualified Clients – for individual investors, this status (which is required in order for the fund’s adviser (asset manager) to receive certain performance-based compensation) generally requires that you either have (1) at least $1.1 million under the management of the specific adviser or (2) net worth of at least $2.2 million alone or with your spouse (excluding the value of your primary residence).

•    Qualified Purchasers – for individual investors, this status generally requires that you own at least $5 million in certain investments.

Each private placement has an offering memorandum containing important information to help you make an informed decision about an investment in the private placement. You should read the private placement offering memorandum, and any other materials available carefully before investing. In deciding whether to invest in a private placement, you should consider several different factors, including the managing member’s past performance, the issuers investment objective, investment strategies and risks, and the fees and expenses associated with an investment in the particular private placement.  

Your HI registered representative can help you determine whether or not you are eligible to invest in certain private placements we offer.

ADDITIONAL INFORMATION

This Reg BI Disclosure reflects information that is complete and current as of the effective date on its cover. If we make changes that would require us to send you updated disclosures, we will send them to you by mail or electronically consistent with your elections and the SEC’s requirements. We will amend this document from time to time and you will be bound by the amended disclosures if you continue to accept our services after we deliver the amended disclosures to you. You may request up-to-date information by speaking with your financial professional or viewing our disclosure documents online.