This Disclosure document is being offered to you by Cornerstone Advisors, LLC
(“Cornerstone Advisors” or “Firm”) about the investment advisory services we provide. It
discloses information about our services and the way those services are made available to
you, the client.
We are an SEC registered investment management firm located in Topeka, Kansas. We
specialize in investment advisory services for individuals, high net worth individuals,
corporations, charitable organizations, trusts and estates. Cornerstone Advisors was
established in 2000 as a registered investment advisor. The owners are Mark Bucholtz and
Jeff Sorensen.
We are committed to helping clients build, manage, and preserve their wealth, and to
provide assistance that helps clients to achieve their stated financial goals. We will offer an
initial complimentary meeting upon our discretion; however, investment advisory services
are initiated only after you and Cornerstone Advisors execute an Investment Management
Agreement.
Investment Management Services
We manage advisory accounts on a discretionary or non-discretionary basis. Once we have
determined a profile and investment plan with a client, we will execute the day-to-day
transactions without seeking prior client consent. For those clients who have given us dis-
cretionary authority, besides day-to-day transactions, we will also execute trades without
seeking prior client consent. Account supervision is guided by the profile and investment
plan of the client. With our non-discretionary relationship, we will provide recommenda-
tions to help meet your financial objectives, but we must obtain your approval before mak-
ing any transactions in your account.
We may accept accounts with certain restrictions if circumstances warrant. We primarily
allocate client assets among cash and cash equivalents, stocks, bonds, various mutual
funds and Exchanged Traded Funds (“ETFs”) in accordance with their stated investment
objectives. As appropriate, we may recommend non-traded REITS, structured notes, or
other alternative investments for some qualified clients. We may also accommodate client
requests for purchase of specific equities. All of which are considered asset allocation cat-
egories for the client’s investment strategy.
During personal discussions with clients, we determine the client’s objectives, time
horizons, risk tolerance and liquidity needs. As appropriate, we also review a client’s prior
investment history, as well as family composition and background. Based on client needs,
we develop a client’s personal profile and investment plan. We then create and manage
the client’s investments based on that profile and plan. It is the client’s obligation to notify
us immediately if circumstances have changed with respect to their goals.
Once we have determined the appropriate strategy for you and your family and executed
the strategy, we will provide ongoing investment review and management services. This
approach requires us to periodically review your portfolio.
With our discretionary relationships, we will make changes to the portfolio, as we deem
appropriate, to meet your financial objectives. We trade these portfolios based on the
combination of our market views and your objectives. We tailor our advisory services to
meet the needs of our clients and seek to ensure that your portfolio is managed in a
manner consistent with those needs and objectives. You will have the ability to leave
standing instructions with us to refrain from investing in particular industries or invest in
limited amounts of particular securities.
Our Firm may advise a Client about legacy positions or other investments in Client portfo-
lios. Clients can limit or restrict our trading in these positions.
Where appropriate, we provide advice about concentrated stock positions already held in
client portfolios. Clients can engage us to advise them on certain investment products that
are not maintained at their primary Custodian, such as annuity contracts and assets held in
employer-sponsored retirement plans and qualified tuition plans (i.e., 529 plans).
You are advised and are expected to understand that our past performance is not a
guarantee of future results. Certain market and economic risks exist that adversely affect
an account’s performance. This could result in capital losses in your account.
Financial Planning
We work with all clients to understand their financial objectives. For most clients, our asset
management fee includes the cost of financial planning. If more complex planning is
needed, Cornerstone Advisors may charge separate fees under a Financial Planning
Agreement for the preparation of a formal financial plan. Through the financial planning
process, our team strives to engage our clients in conversations around the family’s goals,
objectives, priorities, vision, and legacy – both for the near term as well as for future
generations. With the unique goals and circumstances of each family in mind, we may offer
financial planning ideas and strategies to address the client’s holistic financial picture,
including estate, income tax, charitable, cash flow, wealth transfer and family legacy
objectives. We partner with our clients’ other advisors
(CPA, estate attorney, insurance
broker, etc.) to ensure a coordinated effort of all parties toward the client’s stated goals.
Such services include various reports on specific goals and objectives or general investment
and/or planning recommendations, guidance to outside assets and periodic updates.
Our specific services in preparing your formal financial plan may include:
• Review and clarification of your financial goals;
• Assessment of your overall financial position including cash flow, balance sheet,
investment strategy, risk management and estate planning;
• Creation of a unique plan for each goal you have, including personal and business
real estate, education, retirement or financial independence, charitable giving,
estate planning, business succession and other personal goals;
• Development of a goal-oriented investment plan, with input from various advisors
to our clients around tax suggestions, asset allocation, asset location, expenses,
risk and liquidity factors for each goal. This includes IRA and qualified plans,
taxable and trust accounts that require special attention.
The recommendations for the financial plan will not be reviewed nor updated, unless re-
quested by the client at which point a new Financial Planning Agreement between Client
and Advisormay be executed.
Consulting Services
We also provide clients investment advice on a more limited basis on one-or-more isolated
areas of concern such as small business consulting, real estate, pension plan consulting, or
any other specific topic. Additionally, we provide advice on non-securities matters about
the rendering of estate planning, insurance, real estate, and/or annuity advice. All these
are rendered under a Consulting Services Agreement.
In these cases, we may supply recommendations, but you will be required to select your
own investment managers, custodian and/or insurance companies for the implementation
of consulting recommendations. If your needs include brokerage and/or other financial
services, we will recommend the use of one of several investment managers, brokers,
banks, custodians, insurance companies or other financial professionals. You must
independently evaluate these firms before opening an account or transacting business, and
you have the right to effect business through any firm you choose. Also note, you have the
right to choose whether to follow the consulting advice that we provide.
Disclosure Regarding Rollover Recommendations
A client or prospect leaving an employer typically has four options regarding an existing
retirement plan (and may engage in a combination of these options): (1) leave the money
in the former employer’s plan, if permitted, (2) roll over the assets to the new employer’s
plan, if one is available and rollovers are permitted, (3) rollover to an Individual Retirement
Account (“IRA”), or (4) cash out the account value (which could, depending upon the
client’s age, result in adverse tax consequences). Our Firm may recommend an investor
roll over plan assets to an IRA for which our Firm provides investment advisory services. As
a result, our Firm and its representatives may earn an asset-based fee. In contrast, a
recommendation that a client or prospective client leave their plan assets with their
previous employer or roll over the assets to a plan sponsored by a new employer will
generally result in no compensation to our Firm. Our Firm, therefore, has an economic
incentive to encourage a client to roll plan assets into an IRA that our Firm will manage,
which presents a conflict of interest. To mitigate the conflict of interest, there are various
factors that our Firm will consider before recommending a rollover, including but not
limited to: (i) the investment options available in the plan versus the investment options
available in an IRA, (ii) fees and expenses in the plan versus the fees and expenses in an
IRA, (iii) the services and responsiveness of the plan’s investment professionals versus those
of our Firm, (iv) protection of assets from creditors and legal judgments, (v) required
minimum distributions and age considerations, and (vi) employer stock tax consequences,
if any. All rollover recommendations are reviewed by our Firm’s Chief Compliance Officer
and remains available to address any questions that a client or prospective client has
regarding the oversight.
We are fiduciaries under the Investment Advisers Act of 1940 and when we provide
investment advice to you regarding your retirement plan account or individual retirement
account, we are also fiduciaries 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. We have to act in your best interest and not put our
interest ahead of yours. At the same time, the way we make money creates some conflicts
with your interests.
Wrap Fee Program
We do not sponsor a Wrap Fee Program.
Assets
As of December 31, 2023, Cornerstone Advisors manages a total of $218,023,298 regula-
tory assets under management. Our firm manages $184,187,951 in discretionary assets
and $33,835,347 in non-discretionary assets.