The Department of Labor and the Securities Exchange Commission suggests that a plan fiduciary interested in retaining an investment adviser ask the following questions prior to making a decision. These guidelines were issued in 2005 but we believe they are even more relevant today.
1. Are you registered with the SEC or a state securities regulator as an investment adviser? If so, have you provided me with all the disclosures required under those laws (including Part II of Form ADV)?
Yes. Capital Strategies Investment Group is registered with the SEC as a Registered Investment Adviser. We are also registered with the State of Illinois. Our Form ADV can be found at:
2. Do you or a related company have relationships with money managers that you recommend, consider for recommendation, or otherwise mention to the plan for our consideration? If so, describe those relationships?
No. We do not have any relationships or affiliations with any investment managers, broker/dealers, banks, custodians, trustees. Nor do we sell our services through these types of organizations.
3. Do you or a related company receive any payments from money managers you recommend, consider for recommendation, or otherwise mention to the plan for our consideration? If so, what is the extent of these payments in relation to your other income (revenue)?
No. We do not receive any payments from money managers we recommend, consider for recommendation, or otherwise mention to our clients for their consideration. As a Registered Investment Adviser only, there is no mechanism in place whereby we can receive any payments/commissions or compensation from any source. The only revenue we receive comes from the flat, annual retainers we charge our clients.
4. Do you have any policies or procedures to address conflicts of interest or to prevent these payments or relationships from being considered when you provide advice to your clients?
Yes. Our policy states that neither our firm nor any of the associates we employ are affiliated with any bank, broker/dealer, investment manager, provider/recordkeeper, insurance company etc.
Every individual (and spouses/significant others) at Capital Strategies Investment Group is required to adhere to our strict conflict of interest policy.
5. If you allow plans to pay your consulting fees using the plan’s brokerage commissions, do you monitor the amount of commissions paid and alert plans when consulting fees have been paid in full? If not, how can a plan make sure it does not over-pay its consulting fees?
Since we are not a broker-dealer or affiliated with a broker-dealer, we cannot generate or accept commissions. Some of our fees are ERISA eligible expenses and can be paid from the trust/plan assets but only upon written instruction by the plan sponsor.
6. If you allow plans to pay your consulting fees using the plan’s brokerage commissions, what steps do you take to ensure that the plan receives best execution for its securities trades?
Since we are not a broker-dealer or affiliated with a broker-dealer, we cannot generate or accept commissions. Our clients pay us directly via their trustee or custodian upon their written instruction.
7. Do you have any arrangements with broker-dealers under which you or a related company will benefit if money managers place trades for their clients with such broker-dealers?
No. We have no arrangements or affiliations with any broker-dealers under which we benefit if trades are placed through a specific broker/dealer.
8. If you are hired, will you acknowledge in writing that you have a fiduciary obligation as an investment adviser to the plan while providing the consulting services we are seeking?
Yes. We act as fiduciary 3(21) or 3(38) for every client we serve and we acknowledge and document this is in writing in every consulting contract.
9. Do you consider yourself a fiduciary under ERISA with respect to the recommendations you provide the plan?
Yes. We consider ourselves a fiduciary under ERISA for the investment recommendations we make to every plan we serve.
10. What percentage of your plan clients utilize money managers, investment funds, brokerage services or other service providers from whom you receive fees?
More information can be found at: http://www.sec.gov/investor/pubs/sponsortips.htm
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