A. Creative Capital Management Investments LLC (“CCMI LLC”) was formed on
June 9, 2016 in the state of California and became registered as an investment
adviser with the SEC in 2017, thereby continuing many of the client relationships
established by its predecessor firm, Creative Capital Management, Inc., which
was founded in 1980. CCMI LLC is owned 47.5% by JAMES Family Holdings,
47.5% by M. Ohana Holdings, and 5% by TKB Holdings Inc. JAMES Holdings is
owned by Matt Showley, M. Ohana Holdings is owned by Brian Matter, and TKB
Holdings is owned by Kim Benson. We are a fee only firm, which means our only
compensation comes from clients and not any other individuals or entities.
B. As discussed below, CCMI LLC offers investment advisory services to its clients,
and, to the extent specifically requested by a client, financial planning and related
consulting services.
INVESTMENT ADVISORY SERVICES
The client can decide to engage CCMI LLC to provide discretionary investment
advisory services on a fee-only basis as discussed at Item 5 below. We manage
our advisory accounts on a discretionary basis. This means that we make trades
without discussing it with the client beforehand using the client’s stated objectives
to guide our actions. Before engaging CCMI LLC to provide investment advisory
services, clients are generally required to enter into an Investment Advisory
Agreement with CCMI LLC setting forth the terms and conditions of the
engagement (including termination), describing the scope of the services to be
provided, and the fee that is due from the client. To commence the investment
advisory process, CCMI LLC will ascertain each client’s investment objective(s)
and then allocate the client’s assets consistent with the client’s designated
investment objective(s). Once allocated, CCMI LLC provides ongoing supervision
of the account(s).
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
To the extent requested by a client, CCMI LLC may provide financial planning or
consulting services (including investment and non-investment related matters,
including estate, tax, and insurance planning,) on a stand-alone separate fee
basis. Neither CCMI LLC, nor any of its representatives, serves as an attorney,
accountant, or licensed insurance agent, and no portion of CCMI LLC’s services
should be construed as legal or accounting services. CCMI LLC may recommend
the services of other professionals for implementation purposes. The client is
under no obligation to engage the services of any recommended professional.
The client retains absolute discretion over all implementation decisions and is free
to accept or reject any recommendation from CCMI LLC. If the client engages
any recommended professional, and a dispute arises, the client agrees to seek
recourse exclusively from the engaged professional. It remains the client’s
responsibility to promptly notify CCMI LLC if there is ever any change in their
financial situation or investment objectives so that CCMI LLC can review, and if
necessary update its previous recommendations.
FINANCIAL PLANNING PROCESS
In order to introduce CCMI LLC to the client, review the client’s personal financial
or business planning needs, and determine the scope of services the client
desires, this first appointment usually takes approximately one hour, for which
there may be no charge. Thereafter, CCMI LLC’s normal hourly fee applies.
Prior to initiating any financial planning services for the client, in follow-up
correspondence CCMI LLC will summarize the financial concerns discussed in the
meeting and the fees required to complete the financial plan. CCMI requests an
initial retainer fee from the client and provides the client with regulatory
disclosures and agreements to begin the planning process. An outline of any
additional data needed for the analysis will then be provided. Upon receipt of all
of the additional data or information requested and the retainer fee, CCMI LLC will
begin the work for the client’s benefit. Once the plan or project is completed, the
client will receive a final invoice detailing the work done by members of the CCMI
LLC team and the balance of the fee due.
Once CCMI LLC has completed a preliminary summary focusing on the financial
objectives, financial data and assumptions, and priorities the client develops and
verifies with CCMI LLC’s input, CCMI LLC will provide conclusions and
recommendations to the client. CCMI LLC will review the recommendations with
the client at the follow up meeting and the client is free to implement any or all of
CCMI LLC’s recommendations. The financial planning engagement is considered
completed when the client reviews the plan with CCMI LLC. Assistance with
implementation items is available upon request on an hourly fee basis.
Clients are encouraged to periodically review their financial progress. Upon client
request, CCMI LLC provides financial planning reviews that might target a specific
concern or provide a general reassessment of the client’s overall financial
progress. These reviews are also provided on a fee-only basis.
All of the planning services are based on information provided by the client. This
data is kept confidential and is shared with third parties only as permitted by law
or with prior client consent. This includes situations when client information must
be disclosed during examinations performed by the SEC. At times, CCMI may
need to consult with the client’s other advisors, such as an attorney, accountant,
trust officer, or insurance agent. It is helpful to have access to members of the
client’s professional advisory team and, as such, CCMI LLC will ask for either
verbal or written permission from the client to do so.
Miscellaneous financial advice is also available on an hourly fee basis. Reviewing
areas such as mortgage options, tax planning, or financial concerns of a limited
scope come under this general heading and can be provided on an hourly fee
basis.
FIRST STEP FINANCIAL PLANNING SERVICES
First Step Financial Plan
In addition to our traditional financial planning services, we have a First Step
Financial Plan offering, suitable for clients with less complex financial lives, also
provided on a fee-only basis. Generally, this offering is best suited for clients who
have not yet acquired a high level of wealth and are interested in financial
planning for the first time. The CCMI LLC First Step Financial Plan process
provides personalized solutions and recommendations based on a client’s
particular financial concerns; thus, for these clients, we will need to review the
aforementioned financial information.
The financial areas that are commonly addressed in a First Step Financial Plan
include: properly allocating a company retirement plan, saving to buy a home,
navigating the student loan repayment process, establishing a budget for ongoing
expenses, learning to optimally allocate extra cash flow, planning for a child’s
college education, and establishing an estate plan or proper life insurance
coverage. First Step Financial plans generally do not focus on retirement
planning, but rather on optimizing the use of available funds over 10 or 15 years;
specific retirement planning would need to be completed at a later time.
MISCELLANEOUS
Limitations of Financial Planning and Non-Investment Consulting and
Implementation Services. When CCMI LLC provides financial planning and
consulting services, including through its First Step Financial Plan offering, it can
provide advice on investment and non-investment related matters, such as
estate, tax, and insurance planning. CCMI LLC does not serve as a law firm,
accounting firm, or insurance agency, and no portion of CCMI LLC’s services
should be construed as legal, accounting, or insurance advice requiring licensing.
Accordingly, CCMI LLC does not prepare estate planning documents, tax returns
or sell insurance products. To the extent requested by a client, CCMI LLC may
recommend the services of other professionals for certain non-investment
implementation purposes (i.e. attorneys, accountants, and insurance agents).
Clients are reminded that they are under no obligation to engage the services of
any recommended professional. The client retains absolute discretion over all
implementation decisions and is free to accept or reject any recommendation
made by CCMI LLC or its representatives: If the client engages any
recommended professional, and a dispute arises, the client agrees to seek
recourse exclusively from the engaged professional.
Unaffiliated Private Investment Funds. CCMI LLC also provides investment
advice regarding private investment funds. CCMI LLC may manage private funds
that clients may transfer into an account, but do not recommend that any clients
consider an investment in private investment funds. Management of private
investment funds is on a non-discretionary basis, as clients may be restricted as
to when they can trim their positions given lock-up periods, and CCMI LLC cannot
unilaterally decide to reduce or sell the position
without
the client’s involvement. CCMI LLC’s role relative to unaffiliated private
investment funds shall be limited to non-discretionary management of private
investment funds transferred into a CCMI LLC-managed account by a client, in
accordance with the terms and conditions of the fund documents. If a client
determines to become an unaffiliated private fund investor, the amount of assets
invested in the fund(s) shall be included as part of “assets under management” for
purposes of CCMI LLC calculating its investment advisory fee. CCMI LLC’s fee
shall be in addition to the fund’s fees. CCMI LLC’s clients are under absolutely no
obligation to consider or make an investment in any private investment fund(s).
Please Note: Private investment funds generally involve various risk
factors, including, but not limited to, potential for complete loss of principal,
liquidity constraints and lack of transparency, a complete discussion of
which is set forth in each fund’s offering documents, which will be provided
to each client for review and consideration. Unlike liquid investments that a
client may own, private investment funds do not provide daily liquidity or
pricing. Each prospective client investor will be required to complete a
Subscription Agreement, pursuant to which the client shall establish that the
client is qualified for investment in the fund, and acknowledges and accepts
the various risk factors that are associated with such an investment.
Please Also Note: Valuation. In the event that CCMI LLC references
private investment funds owned by the client on any supplemental account
reports prepared by CCMI LLC, the value(s) for all private investment funds
owned by the client shall reflect the most recent valuation provided by the
fund sponsor. However, if subsequent to purchase, the fund has not
provided an updated valuation, the valuation shall reflect the initial
purchase price. If subsequent to purchase, the fund provides an updated
valuation, then the statement will reflect that updated value. The updated
value will continue to be reflected on the report until the fund provides a
further updated value. Please Also Note: As result of the valuation
process, if the valuation reflects initial purchase price or an updated value
subsequent to purchase price, the current value(s) of an investor’s fund
holding(s) could be significantly more or less than the value reflected on the
report. Unless otherwise indicated, CCMI LLC shall calculate its fee based
upon the latest value provided by the fund sponsor.
Retirement Rollovers. A client or prospective client leaving an employer typically
has four options regarding an existing retirement plan (and may engage in a
combination of these options): (i) leave the money in the former employer’s plan, if
permitted, (ii) roll over the assets to the new employer’s plan, if one is available
and rollovers are permitted, (iii) roll over to an Individual Retirement Account
(“IRA”), or (iv) cash out the account value (which could, depending upon the
client’s age, result in adverse tax consequences). If the CCMI LLC recommends
that a client roll over their retirement plan assets into an account to be managed
by CCMI LLC, such a recommendation creates a conflict of interest if CCMI LLC
will earn new (or increase its current) compensation as a result of the rollover.
Whether CCMI LLC provides a recommendation as to whether a client should
engage in a rollover or not, CCMI LLC is acting as a fiduciary within the meaning
of Title I of the Employee Retirement Income Security Act and/or the Internal
Revenue Code, as applicable, which are laws governing retirement accounts. No
client is under any obligation to roll over retirement plan assets to an account
managed by CCMI LLC. CCMI LLC’s Chief Compliance Officer, Brian Matter,
remains available to address any questions that a client or prospective client may
have regarding the potential for conflict of interest presented by a rollover
recommendation.
Independent Managers. CCMI LLC may allocate a portion of a client’s
investment assets to unaffiliated independent investment managers (each an
“Independent Manager”) in accordance with the client’s designated investment
objectives. The Independent Manager will have day-to-day responsibility for the
active discretionary management of the allocated assets. CCMI LLC will continue
to monitor and review the client’s account performance, asset allocation and
investment objectives. The factors CCMI LLC considers in recommending
Independent Managers includes the client’s investment objectives, and the
manager’s management style, performance, reputation, financial strength,
reporting, research and pricing. Registrant defines “Independent
Managers” to primarily include separately managed accounts. Currently, an
independent manager is being used for one asset class, municipal bonds, but
may determine to use another independent manager at some point in the future.
The investment management fee charged by the Independent Manager[s] is
separate from, and in addition to, CCMI LLC’s investment advisory fee disclosed
at Item 5 below.
Reporting Services. CCMI LLC can also provide account reporting services,
which can incorporate client investment assets that are not part of the assets that
CCMI LLC manages (the “Excluded Assets”). Unless agreed to otherwise, in
writing, the client and/or his/her/its other advisors that maintain trading
authority, and not CCMI LLC, shall be exclusively responsible for the
investment performance of the Excluded Assets. Unless also agreed to
otherwise, in writing, CCMI LLC does not provide investment management,
monitoring or implementation services for the Excluded Assets. If CCMI LLC is
asked to make a recommendation as to any Excluded Assets, the client is under
absolutely no obligation to accept the recommendation, and CCMI LLC shall not
be responsible for any implementation error (timing, trading, etc.) relative to the
Excluded Assets. The client can engage CCMI LLC to provide investment
management services for the Excluded Assets pursuant to the terms and
conditions of the Investment Advisory Agreement between CCMI LLC and the
client.
Client Obligations. In performing its services, CCMI LLC is not required to verify
any information received from the client or from the client’s other professionals
and will not be responsible for relying on that information. Moreover, it remains
each client’s responsibility to promptly notify CCMI LLC if there is ever any change
in his/her/its financial situation or investment objectives for the purpose of
reviewing/evaluating/revising our previous recommendations and/or services.
Investment Risk. Different types of investments involve varying degrees of risk,
and it should not be assumed that future performance of any specific investment
or investment strategy (including the investments and/or investment strategies
recommended or undertaken by CCMI LLC) will be profitable or equal any specific
performance level(s).
Cybersecurity Risk. The information technology systems and networks that
CCMI LLC and its third-party service providers use to provide services to CCMI
LLC’s clients employ various controls, which are designed to prevent
cybersecurity incidents stemming from intentional or unintentional actions that
could cause significant interruptions in CCMI LLC’s operations and result in the
unauthorized acquisition or use of clients’ confidential or non-public personal
information. Clients and CCMI LLC are nonetheless subject to the risk of
cybersecurity incidents that could ultimately cause them to incur losses, including
for example: financial losses, cost and reputational damage to respond to
regulatory obligations, other costs associated with corrective measures, and loss
from damage or interruption to systems. Although CCMI LLC has established its
systems to reduce the risk of cybersecurity incidents from coming to fruition, there
is no guarantee that these efforts will always be successful, especially
considering that CCMI LLC does not directly control the cybersecurity measures
and policies employed by third-party service providers. Clients could incur similar
adverse consequences resulting from cybersecurity incidents that more directly
affect issuers of securities in which those clients invest, broker-dealers, qualified
custodians, governmental and other regulatory authorities, exchange and other
financial market operators, or other financial institutions.
C. CCMI LLC provides investment advisory services specific to the needs of each
client. Prior to providing services, an investment adviser representative will
determine each client’s investment objectives. Thereafter, CCMI LLC shall invest
or recommend that the client invest their assets consistent with their investment
objectives. The client may, at any time, impose reasonable restrictions, in writing,
on CCMI LLC’s services.
D. CCMI LLC does not participate in a wrap fee program.
E. As of August 31, 2023, CCMI LLC had $552,569,232 in assets under management
on a discretionary basis and $601,122 in assets under management on a non-
discretionary basis.