FNEX Capital (“FNEX”) is a registered broker-dealer with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). We are a broker dealer and provide investment banking services rather than brokerage account or advisory account services. It is important to understand the differences and fees charged for such. For your convenience, free and simple tools are available to research firms and financial professionals at Investor.gov/CRS, which also provides educational materials about broker-dealers and investing.
What investment services and advice can you provide me?
FNEX facilitates private secondary market transactions for Wealth Managers, Investment Advisors, Family Offices and High Net Worth investors. We present the information to prospective investors who make an independent decision whether to invest. We also facilitate private securities transactions that occur during institutional mergers and acquisitions.
FNEX also distribution services for private securities offerings. Our firm does not maintain accounts and does not hold cash on behalf of investors. This means that we do not offer periodic evaluation of your securities positions, rather we act in your best interest at the time we make a recommendation. We assess your investor profile based on information we collect from you about you and your goals, and we make recommendations that are designed to fit that profile. You may select investments, or we may recommend investments for you, but the ultimate investment decision resides with you, as pertains to your strategy and the purchase or sale of securities. We offer a limited selection of investments to retail investors, including untraded real estate investment trusts and private placements of securities. We also offer mutual fund products and private placements on a wholesale basis to broker-dealers and registered firms. Private placements are more complex and expensive than mutual funds, stocks, and bonds. Other firms could offer a wider range of choices, some of which might have lower costs. Since we do not hold customer accounts, we do not recommend account types. Our firm and its financial professionals will not accept discretionary authority over investors’ assets or securities.
Some questions you might ask one of our representatives
Given my financial situation, should I invest in a private placement? Why or why not?
What is the due diligence process on the issuers of the privately placed securities you offer?
What is your relevant experience, including your licenses, education and other qualifications? What do these qualifications mean?
What fees will I pay?
Primarily, FNEX acts solely as a finder, representing an issuer of a private security, where we simply introduce potential investors to the issuer. In these situations, we receive placement fees from the issuer, not the investor. In these situations, FNEX is not representing the investor, therefore we are not making a recommendation. After the introduction is made, the investor must independently make the decision to invest or not.
In other cases, we represent and make recommendations to retail investors. Investors that buy or sell through our firm will pay a transaction-based fee which is generally referred to as a commission, but may include
other fees such as referral fees, finder fees, marketing fees, diligence fees and/or wholesale fees. Some or all of these fees will be paid every time you make an investment. The exact amount of the fees will be disclosed in the offering materials provided to you, and we encourage you to read them thoroughly. There may also be fees or penalties associated with selling your investment and the offering materials will provide an explanation of those fees, if any.
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.
A question you might ask one of our representatives
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 make 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 can affect the products and services we provide you. Here are some examples to help you understand what this means. The firm receives placement fees from issuers for representing them as a placement agent.
As a placement agent representing the issuer, the firm is incented to place securities with investors on the best terms (price, structure, yield, etc.) for the issuing client. This may present a conflict with investors who are seeking the best terms when purchasing a security issued by our client. The firm also receives third party payments in connection with the sales of investment companies. This means we have a financial incentive to offer certain investments or products.
Certain FNEX registered representatives are owners, principals, managers, and/or employees of sponsors of the products we sell. This creates an economic incentive for these representatives to offer certain private placements over others. These financial professionals may be knowledgeable only of the products offered by their employer and may be limited in the variety of products they are able to offer you. This may also present a conflict of interest. These conflicts of interest are clearly disclosed in the offering documents that you are required to read prior to engaging in a transaction. You should discuss these conflicts of interest with your financial professional as you consider investment options.
A question you might ask one of our representatives
How might your conflicts of interest affect me, and how will you address them?
How do your financial professionals make money?
FNEX financial professionals are primarily compensated by earning placement fees from issuers we represent, and/or commissions on the products retail investors buy and sell through our firm. They may also make ongoing fees related to marketing/distribution or diligence fees. The sale of some products, such as complex private placement products that can require more knowledge, time and expertise to sell, may pay higher commissions to financial professionals than other products. More complex products may not be appropriate for all investors. A conflict arises when the financial professional has a greater incentive to sell products that pay higher commissions. We maintain procedures to mitigate these conflicts. Some FNEX financial professionals are also compensated by another business entity for their non- securities work and in some cases, this may cause a conflict of interest if the outside business entity earns fees for its services provided in an offering, as an issuer, sponsor, or provider of professional services. You should discuss this with your financial professional prior to accepting their recommendation.
Do you or your financial professionals have legal or disciplinary history?
FNEX has no disciplinary history. Certain financial professionals that are associated with our firm have legal or disciplinary history. Investor.gov/CRS can be used as a free and simple search tool to research us and all our financial professionals.
A question you might ask one of our representatives
As a financial professional, do you have any disciplinary history? For what type of conduct?
Additional Information
Additional information about our services can be found on the Firm’s website at: www.fnex.com
You can also request up-to-date information about our firm as well as a copy of our relationship summary by calling (888) 580-2588
A question you might ask one of our representatives
Who is my primary contact person? Is he or she a representative of an investment adviser or a broker-dealer? Who can I talk to if I have concerns about how this person is treating me?