The Privately Managed Portfolio Program
The Privately Managed Portfolio Program (“PMP”) offers individually managed investment accounts to clients, for clients with more than $500,000 of assets under management, providing access to the investment advisory services of a select, prescreened group of investment advisers (investment managers).
CCAM, through the PMP Program, helps investors select an appropriate adviser to manage their portfolio, pays the manager’s investment advisory fee on behalf of the investor, monitors and evaluates the manager’s performance, executes the investor’s portfolio transactions without commission charge, and provides custodial services for the investor’s assets, or provides any combination of these or other services, all for a single fee all-inclusive fee (wrap fee) paid by the investor to CCAM. The program also provides for on-going consulting services, account monitoring and performance reporting.
Portfolio composition will be determined based on each client’s needs and portfolio restrictions, if any, the client’s financial goals, age and risk tolerances.
Typically when a client has under $500,000 of assets under management, CCAM will itself manage the client’s portfolio. In this instance, CCAM will design and continuously manage a portfolio consisting entirely of mutual funds (primarily, though not necessarily exclusively, of no-load mutual funds) with the goal of meeting each client’s individual needs.
The PMP program offers advice regarding equity securities, warrants, corporate debt, commercial paper, bank certificates of deposit, municipal securities, investment company securities, U.S. government securities, options and futures contracts and partnerships, including real estate, equipment leasing and mortgage leasing. Some strategies, such as with option contracts, involve more risk and are only appropriate for certain investors.
In selecting independent money managers, CCAM will use an asset allocation strategy, recommending one or more managers in the following investment styles:
CCAM will assist the client in determining which portion of his or her assets should be allocated among these investment styles and will recommend appropriate managers within each style.
Large Cap Growth, Large Cap Value
Medium Cap Growth, Medium Cap Value
Small Cap Growth, Small Cap Value
International Growth, International Value
International Emerging Markets
Taxable Fixed Income
Tax Exempt Fixed Income
Additional information regarding the PMP Program
Please select an option below:
- Investment Managers
- Money Managers for Clients
- General Fees
- Conflicts of Interest
- Balance Sheet
- Key Officers
SELECTION OF INVESTMENT MANAGERS PARTICIPATING IN PMP
CCAM selects a group of professional investment managers from a large database of investment managers to participate in the program. Managers must be duly registered investment advisers and are screened for financial and organizational stability, historical performance, quality of management, research capabilities and other factors. Investment managers participating in the PMP are reviewed at least once a year and are evaluated and categorized according to their investment philosophy and approach, asset allocation, rate of return expectation and risk. Consideration is also given to methodology, standards and CCAM’s verification of investment managers’ reported historical composite returns. CCAM also utilizes the services of Lockwood Advisors, a nationally recognized firm that provides due diligence reviews of investment managers, monitors manager performance, and provides training and other support services. CCAM independently reviews the PMP pool of investment managers on at least an annual basis. The information CCAM obtains regarding investment managers participating in the PMP is believed to be reliable and accurate, however, CCAM does not guarantee accuracy nor independently verify reported results. CCAM may remove an investment manager from the program if, in the judgment of CCAM, the manager does not execute its functions in a manner consistent with its stated philosophy and approach or if the manager becomes otherwise unsuitable for continued participation. Such unsuitability may be augmented by material events that may impair the manager’s ability to perform its functions.
SELECTION OF MONEY MANAGER FOR CLIENTS
Clients will be interviewed by a CCAM financial consultant who will obtain necessary information regarding the client’s financial condition, sophistication, and investment objectives. The interview process includes the development of a client profile regarding financial condition, investment objectives, risk tolerance, liquidity requirements and time horizon. Based on CCAM’s understanding of the client’s investment needs and objectives as obtained by the interview process, CCAM will recommend one or more investment managers from those participating in the program whose investment philosophy and objectives CCAM believes are most compatible with the client’s investment philosophy and objectives. CCAM notifies the client-selected investment manager(s) and provides them with copies of the client’s questionnaire and any investment policies and restrictions provided by the client to CCAM in writing. Clients are regularly encouraged to, and are responsible for, bringing material changes in objectives or financial condition to the attention of their introducing financial consultant at CCAM. Changes in objectives and financial condition that CCAM deems material or noteworthy will be communicated to the client’s investment manager(s). Investment managers may also have similar communications with clients.
Both CCAM and client-chosen investment managers have discretionary authority. Other than in connection with its consulting responsibilities, CCAM does not assume responsibility for the conduct of the investment managers including, but not limited to, their performance or compliance with applicable laws or regulations. Clients are advised and are expected to understand that an investment manager’s past performance is not a guarantee of future results and that certain market and economic risks exist that may adversely affect a manager’s performance which could result in capital losses in that client’s account. The selection of risk parameters and comparative indices by CCAM with which to compare a client’s account performance are for informational purposes only. No guarantee is expressed or implied that the client’s account performance will compare favorably to such parameters or indices.
PERFORMANCE REVIEWS AND REPORTS
CCAM will continuously monitor the investments made for each client account being managed by one or more money managers. During this part of the process CCAM monitors the managers and investments selected by the client. In situations where CCAM believes that a recommended money manager is not meeting the client’s goals, CCAM may recommend the use of another money manager.
CCAM reviews performance data of all PMP investment managers and of the PMP accounts they manage on a quarterly, semi-annual and annual basis. Composite results reported by the managers are compared with results of a universe of managers with similar investment philosophies, objectives and approach and with standard market statistics. Composite results are also compared with results prepared by Lockwood in order to determine consistency. Results are reviewed for consistency in investment discipline and approach. CCAM reviews, but does not itself calculate, PMP account performance in accordance with the Association for Investment Management and Research (AIMR) standards. CCAM does not audit the performance data reported by the investment managers to the databases to insure they are calculated on a uniform and consistent basis. CCAM also does not audit compliance with any standards an investment manager has stated it uses.
CCAM provides PMP clients with comprehensive reports, detailing performance, asset allocation breakdowns, and holdings. The report reflects the account’s performance during the preceding quarter in terms of realized gains and losses, time weighted rate of return and compares the account’s performance to selected market indices. CCAM selects the comparative indices based on the client’s investment objectives and the investment manager’s style. Additionally, CCAM clients will receive ongoing and periodic reports of activity in their accounts from the client’s custodial broker/dealer. These reports include transaction confirmations, monthly statements itemizing account activity and all securities held in custody.
Accounts are reviewed according to the client’s stated guidelines or in response to requests. In the absence of guidelines, account reviews are conducted on a quarterly basis by CCAM’s financial consultant. Investment advisory accounts are reviewed by Robert E. Nixon, President and principal executive officer of CCAM.
On occasion, CCAM may recommend the replacement of a manager to a PMP client. This may be due to a failure by the manager to adhere to a stated management style or client objectives, a material change in the professional staff, unexplained poor performance or inconsistencies among accounts managed by the same manager.
GENERAL INFORMATION ON FEES
The all-inclusive fee, described for simplicity as an annual percentage of assets under management, is applied to the account asset value on a pro-rated basis and is billed quarterly in advance. CCAM’s fee includes compensation for the advisory and consulting services provided by CCAM, custodial and execution services (including brokerage charges on agency trades effected by the investment managers through broker-dealers), and quarterly performance reports and other account-related services provided.
The PMP fee does not include, and the client will be responsible and charged for, interest on debit account balances, underwriting commissions or discounts relating to securities purchased through public offerings from an underwriter or dealer, exchange fees and odd-lot differentials, transfer taxes and other fees required by law, IRA and qualified retirement account fees, postage and handling fees, and other money market account fees unless prohibited by law.
PMP fees are calculated as a percentage of the PMP account value. The fee is payable quarterly in advance. The fee will be a percentage of the market value of all assets in the Client Accounts on the last trading day of the prior calendar quarter. Fees are assessed on all assets under management including securities, cash and money market balances. Margin debit balances do not reduce the value of assets under management.
COMMUNICATIONS WITH INVESTMENT MANAGERS
CCAM places no restrictions on PMP clients’ ability to contact or consult with investment managers.
POTENTIAL CONFLICTS OF INTEREST
CCAM may recommend securities or investment products to clients in which CCAM or a related person may have some financial interest or buy or sell for itself securities it also recommends to clients. There can be no assurance that advisers acting on behalf of PMP clients will not place transactions in securities which the CCAM principals, in their capacity as a broker-dealer representative, or its related persons, may have an independent financial interest.
CCAM may give advice and take action in performing its duties to clients that may differ from advice given, or the timing and nature of action taken, with respect to PMP accounts. Additionally, CCAM and its principals may be limited in their ability to divulge or act upon certain information in their possession obtained from investment banking or other confidential sources. CCAM, or individuals associated with CCAM, and the PMP investment managers may purchase securities that are recommended to PMP clients. Certain investment managers that CCAM recommends to PMP accounts may direct brokerage commissions to CCAM relating to transactions effected for the account of others.
A portion of the PMP fee described in this brochure will be paid to CCAM financial consultants in connection with the introduction of accounts as well as providing client related services within this program. Such compensation may be more than the financial consultant would receive if clients participated in other programs or paid separately for investment advice, brokerage and other services and, therefore, the financial consultants may have a financial incentive to recommend the PMP over other programs and services.
Capital Consulting and Asset Management, Inc. has adopted and enforces internal policies and procedures with respect to conflicts of interest between Capital Consulting and Asset Management, Inc. and its clients. Pursuant to these policies and procedures, client orders are given precedence over and executed before transactions in which CCAM, or their employees, have an interest.
The client selected advisers in the PMP program provide discretionary portfolio management for client accounts.
PMP is an all-inclusive fee program and generally all brokerage and custody services under the program will be transacted by Fidelity Brokerage Services, Inc. and Charles Schwab & Co., in their capacity as a broker-dealer.
In the event that a client directs CCAM to use a particular broker or dealer other than Fidelity or Charles Schwab, it should be understood that under this circumstance the client will incur the cost of the broker-dealer’s commissions and other charges. As a result, the cost of the wrap fee program will be significantly greater than if the services were to be unbundled and purchased separately. In addition, in this circumstance, CCAM will not have authority to negotiate commissions, obtain volume discounts and best execution may not be achieved.
In circumstances where an independent adviser uses a broker other than Fidelity or Schwab, CCAM absorbs any additional commissions and other transaction costs.
The principal executive officer, Rob Nixon, is affiliated with the broker dealer Geneos Wealth Management (“GWM”), and as such, in the separate capacity as a registered representative, may effect securities transactions for compensation.
In addition, Mr. Nixon holds an insurance agent license, which is required in Nebraska in order to evaluate insurance policies and strategies for clients, and may effect transactions in insurance related products for compensation.
CCAM may compensate, either directly or indirectly, any person (defined as a natural person or a company) for client referrals. CCAM and its principals may accept referral fees from investment advisers. It is anticipated that persons participating in referrals will be other Registered Investment Advisers, broker-dealers, law firms, pension consultants, real estate broker-dealers, and accounting firms. CCAM will comply with SEC and state regulations regarding disclosure, recordkeeping and other requirements.
As CCAM does not have custody of client funds or securities, nor charge fees of $500 or more six months in advance, a balance sheet is not required.
EDUCATIONAL AND BUSINESS BACKGROUNDS OF KEY OFFICERS
CCAM personnel who provide investment advisory services or who are on the investment committee are required to hold a college degree or to possess five year’s business experience, at a minimum.
The following members of the Investment Committee are involved in determining general investment advice and selecting and evaluating managers on behalf of CCAM clients:
Robert Eugene Nixon
Formal Education: CFP, College for Financial Planning, Denver, CO, 1983
Financial Consultant, President and Director, with Capital Consulting and Asset Management, Inc. / Chase Investment Consulting, Inc., Lincoln, NE from June 28th of 1996 until Present.
Financial Consultant and Registered Representative with Chase Manhattan Investment Services, Inc.(“CMIS”), Lincoln, NE from March of 1994 until June 28th of 1996.
Financial Consultant and Registered Representative with Smith Barney/Shearson Lehman American Express, Lincoln, NE from September of 1982 until January of 1994.
The principal business of the principal executive officer, Robert E. Nixon, is managing Capital Consulting and Asset Management, Inc., which is a registered investment adviser and affiliated as registered representatives with Geneos Wealth Management (GWM), a registered broker/dealer. This principal executive spends the majority of his time on these functions. In addition, Mr. Nixon also holds an insurance agent license, which is required in order to evaluate insurance policies for clients.