Stern Capital Management, Inc. is a Securities and Exchange Commission (SEC) registered
investment advisor with its principal place of business located in New Jersey. Stern Capital
Management, Inc. began conducting business in 1996 as a sole-proprietorship and incorporated
in 1999, and acts as a fiduciary for our clients.
Listed below are the firm's principal shareholders (i.e., those individuals and/or entities
controlling 25% or more of this company).
• Stuart Mark Stern, President
Stern Capital Management, Inc. offers the following advisory services to our clients:
Investment Advisory Services: Our firm provides portfolio management services to
clients using model asset allocation portfolios. Each model portfolio is designed to meet a
particular investment goal. The accounts will be invested in mutual funds exclusively or with
ETF's offered through Charles Schwab & Company or another firm who will act as a custodian.
Stern Capital Management, Inc. will never act as the custodian. Clients retain individual
ownership of all securities. Stern Capital Management, Inc. does not participate in wrap fee
programs.
The investments will be selected from among a broad universe of mutual funds, EFT's, asset
classes and style categories in accordance with a client's investment objectives.
We manage these advisory accounts on a discretionary or non-discretionary basis. Account
supervision is guided by the client's stated objectives (i.e., aggressive, moderately aggressive,
moderate, moderately conservative, conservative and most conservative models). Any other
securities (i.e.: individual stocks, bonds, or options) not found in the model portfolios are not
recommended by the adviser and will be transacted on an unsolicited basis only. The adviser
will not be responsible for monitoring the securities not found in its model portfolios.
Through personal discussions with the client in which the client's goals and objectives are
established, we determine if the model portfolio is suitable to the client's circumstances. Once
we determine the suitability of the portfolio, the portfolio is managed based on the portfolio's
goal, rather than on each client's individual needs. Clients, nevertheless, have the opportunity
to place reasonable restrictions on the types of investments to be held in their account. Some
types of investments involve certain additional degrees of risk, they will only be
implemented/recommended when consistent with the client's stated investment objectives,
tolerance for risk, liquidity and suitability.
To ensure that our initial determination of an appropriate portfolio remains suitable and that the
account continues to be managed in a manner consistent with the client's financial
circumstances, we will:
1. Send quarterly written reminders to each client requesting any updated information
regarding changes in the client's financial situation and investment objectives.
2. Be reasonably available to consult with the client.
3. Maintain client suitability information in each client's file.
Retirement Plan Rollovers: When leaving an employer, there are typically four options
regarding the existing retirement plan: (1) leave the assets in the former employer’s plan, if
permitted, (2) rollover the assets to the new employer’s plan, if one is available and rollovers
are permitted, (3) rollover the assets to an Individual Retirement Account (IRA), or (4) take a
full withdrawal in cash, which would result in ordinary income tax on the distribution amount
and an additional IRS early withdrawal penalty, if the client is under age 59½.
If we recommend that a client rollover their 401(k) or other qualified plan assets to an IRA, this
rollover recommendation presents a conflict of interest in that we would receive compensation
(or may increase current compensation) when investment advice is provided following the
client’s decision to rollover their retirement plan assets. We will discuss retirement plan options
including retention of the client’s 401(k) or qualified plan assets within the client’s current plan,
if allowed. Prior to
making a decision, the client should carefully review the information
regarding their rollover options and are under no obligation to rollover retirement plan assets to
an account that we manage.
General Disclosures Regarding ERISA and Qualified Accounts
SCM is deemed to be a fiduciary to advisory clients that are participants of an employer
retirement plan or owner of individual retirement accounts (IRAs) pursuant to the Employee
Retirement Income and Securities Act (ERISA), and regulations under the Internal Revenue
Code of 1986. As a fiduciary, we only recommend a rollover when we believe it is in the client’s
best interest.
Financial Planning: We offer financial planning services. Financial planning is a
comprehensive evaluation of a client's current and future financial state by using currently
known variables to predict future cash flows, asset values and withdrawal plans. Through the
financial planning process, all questions, information and analysis are considered as they impact
and are impacted by the entire financial and life situation of the client. Clients purchasing this
service receive a written report which provides the client with a detailed financial plan designed
to assist the client achieve his or her financial goals and objectives.
In general, the financial plan can address any or all of the following areas:
• PERSONAL: We review family records, budgeting, personal liability, estate
information and financial goals.
• TAX & CASH FLOW: We analyze the client's income tax and spending and planning
for past, current and future years; then illustrate the impact of various investments on the
client's current income tax and future tax liability.
• INVESTMENTS: We analyze investment alternatives and their effect on the client's
portfolio.
• INSURANCE: We review existing policies to ensure proper coverage for life, health,
disability, long-term care, liability, home and automobile.
• RETIREMENT: We analyze current strategies and investment plans to help the client
achieve his or her retirement goals.
• DEATH & DISABILITY: We review the client's cash needs at death, income needs of
surviving dependents, estate planning and disability income.
• ESTATE: We assist the client in assessing and developing long-term strategies,
including as appropriate, living trusts, wills, review estate tax, powers of attorney, asset
protection plans, nursing homes, Medicaid and elder law. Stern Capital Management,
Inc. is not an attorney and will not prepare documents. We will provide this service only
in conjunction with the client's attorney.
We gather required information though in-depth personal interviews. Information gathered
includes the client's current financial status, tax status, future goals, return objectives and
attitudes towards risk. We carefully review documents supplied by the client, including a
questionnaire completed by the client, and prepare a written report. Should the client choose to
implement the recommendations contained in the plan, we suggest the client work closely with
his/her attorney, accountant, insurance agent, and/or stockbroker. Implementation of financial
plan recommendations is entirely at the client's discretion. Financial planning recommendations
are not limited to any specific product or service offered.
We also provide general non-securities advice on topics that may include tax and budgetary
planning, estate planning and business planning. A conflict exists between the interests of the
investment adviser and the interests of the client. The client is under no obligation to act upon
the investment adviser’s recommendation, and if the client elects to act on any of the
recommendations, the client is under no obligation to effect the transaction through the
investment adviser.
Amount of Managed Assets: As of December 31, 2023, Stern Capital Management,
Inc. had $218,114,396 of client's assets under management on a discretionary basis and
$275,433 of client’s assets on a non-discretionary basis. Therefore, the total of client’s assets
under management is $218,389,829.