We hold ourselves to a higher ethical standard and operate more efficiently and with better internal controls than many other firms. How so? Because we comply with a rigorous set of performance-reporting guidelines called Global Investment Performance Standards, also known as GIPS®.
What makes GIPS® compliance special?
- CapWealth claims compliance with the Global Investment Performance Standards (GIPS®)
- GIPS® standards are broadly accepted and endorsed by investment management firms worldwide.
- Participation in GIPS® is voluntary and regulators do not require investment management firms to follow it, indicating that those firms who opt into this process are truly committed to reporting and performance excellence.
- GIPS® compliance indicates that a firm sticks to the overall guiding principles of the GIPS® standards: fair representation and full disclosure of a firm’s investment performance.
- When comparing the results of multiple GIPS® compliant firms, you can be confident that results were calculated and presented by firms using the same methodology.
We’re a Registered Investment Advisor (RIA) registered with the Securities and Exchange Commission.
What are the benefits of working with an RIA like CapWealth?
An RIA has a special “fiduciary duty” to its clients.
That means we have a legal obligation to provide proper investment advice and always act in the best interests of our clients. Any other advisor—with banks, brokerages, broker dealers, wirehouses, etc.—can be held to a lower “suitability” standard. They may suggest an investment considered suitable for you at that moment, but may not make sense for your situation later in life. As an RIA, we’re obligated to keep tabs on your investments over your life to ensure they remain appropriate for your inevitably changing circumstances—such as marriage, children, evolving financial situation, older age and more. (Executive Vice President and Financial Advisor Jennifer Pagliara, CFP®, has written a financial column for The Tennessean about this topic here.)
As part of that higher standard, an RIA is required to maintain public records of how it does business.
RIAs must file a Form ADV with the Securities and Exchange Commission that describes exactly how we do business and how we are compensated. The Form ADV consists of two parts: the first contains information about our business regarding ownership and regulatory matters, while the second includes two sections known as the ADV Brochure and the Brochure Supplement, which outline our services, fees, background and strategies in addition to information on the specific advisor providing financial advice. Before you hire an advisor, always ask for and carefully read both parts of Form ADV. You can also find a copy of an investment advisor’s most recent Form ADV on the SEC’s Investment Advisor Public Disclosure website at www.adviserinfo.sec.gov.
Many RIAs operate as independent business owners.
As an entrepreneurial business, we have a vested interest in building long-term relationships with satisfied clients. We also have with a network of professionals with expertise in accounting, law, estate planning and insurance. These networks allow an RIA to design a comprehensive strategy to meet all of a clients’ financial goals and objectives.
Most independent RIAs use a third-party institutional custodian to hold assets. That translates to even greater peace of mind for clients.
Though we oversee and manage your assets, a multi-billion-dollar entity, such as Charles Schwab, safeguards your money. The custodian focuses on holding assets and providing infrastructure services such as the execution of trades that we order. That allows us to focus solely on understanding your needs and providing the best advice possible. It also adds an important system of checks and balances. You will receive regular statements from our custodian, detailing every transaction in your account, in addition to the reports that we provide.
Transparent by choice and by technology
Every client deserves a crystal-clear understanding of what their financial advisor does for them, including transparent, comprehensive reporting on the returns and the costs of their investments.
What we mean by transparency
Our fees are simple and easy to understand. We’re not interested in hiding or complicating our compensation. We offer excellent work at a fair price, the only way to build a partnership of mutual trust and benefit. And quite frankly, the only kind of partnership we’re interested in.
We provide the same openness and integrity in our performance reporting—how your investments have risen or fallen in value—through technology. All clients get Provable Integrity® reporting, a proprietary data-aggregation and -analysis service powered by cutting-edge technology that provides accurate, easy-to-understand pictures of how their investments perform.
What does all of this mean for you? When you receive a quarterly performance report from CapWealth (digital or paper, your choice, but either way will always come with a personal letter and our brief analysis of the market), you will get some graphs and pie charts, because those are great tools. But on the first page of every report, you’ll always get these important basics: the beginning value of your account, the ending value, gains and income, and fees. All in black and white. Good luck finding all that essential information presented in such an unmistakably clear, straightforward manner from other firms’ quarterly reports.