Portfolio Resources Advisor Group, Inc. (hereinafter referred
to as “PRAG” and/or “the firm” and/or “we”) was established
in April 2007 and approved as a Registered Investment
Adviser in December 2007. Antonio Camejo is the President
and a 33.33% owner. Jose M. Maraver, and Inversiones
Sosabas, a foreign entity, are each 33.33% owners of PRAG.
ADVISORY SERVICES – TYPES OF CLIENTS
PRAG provides administrative, investment supervisory and
portfolio management services to individuals, qualified
investors, trusts, estates, charitable organizations,
corporations, and business entities. PRAG utilizes various
advisory programs offered through Envestnet Asset
Management, Inc. (“Envestnet”), and/or other independent
money management technology platforms ("Management
Platforms") that PRAG may utilize in the future. PRAG also
has investment management agreements with First
Affirmative Financial Network (FAFN) and other independent
third-party managers, included also in the term “Management
Platforms” in this Brochure. PRAG is responsible for all
advice, and suitability of such advice, regarding these
accounts. A full description of the specific managers
recommended to a particular client is provided in the PRAG
Investment Management Agreement (IMA), the Statement of
Investment Selection (SIS) agreement, and/or through
individual manager Form ADV’s. PRAG provides
discretionary account management in which the client is
provided with on-going investment advice and monitoring
with respect to their securities holdings. PRAG will manage
the account according to the client’s objectives and
restrictions as outlined in an Investment Policy Statement
(IPS) or Statement of Investment Selection (SIS). Custodians
utilized for the programs below include Pershing LLC.,
Schwab Institutional, Folio Investments, Inc., and any other
custodian with whom PRAG may establish a relationship in
the future.
PRAG also provides administrative advisory services to third-
party independent RIAs, such as billing and performance
reporting, through its relationship with various technology
platforms.
On occasion, PRAG advisors hold client seminars and/or
educational workshops to discuss investment issues and
opportunities. Such client presentations are previously
approved by the firm’s compliance department and are free
of charge to clients. Seminars or workshops are advertised in
various media publications including the use of email and the
internet. Such advertising requires prior approval by the
firm. Any interested party is welcome to attend.
Pershing LLC. provides custody, transaction, and banking
services through PRAG’s affiliated broker-dealer, Portfolio
Resources Group, Inc. (“PRG”).
The firm presently offers the following types of advisory
services:
I. Managed Account Solutions (Wrap Fee Program)
II. Non-Wrap Fee Programs
III. PRAG Investment Consulting (PRAG-IC)
IV. Financial Planning
TYPES OF ADVISORY SERVICES (TYPES OF INVESTMENTS):
I. Managed Accounts Solutions (Wrap Fee Program)
The “Wrap Fee Programs” offered are typically through third
party money management platforms such as Envestnet Asset
Management, Inc., First Affirmative Financial Network (FAFN),
and other management platforms that PRAG may utilize in the
future.
Wrap Fee Programs are sponsored by PRAG under the
Management Platforms in the same manner as described in
this document. PRAG receives advisory fees for its portfolio
management services as described in Appendix 1 of its Form
ADV Part 2A (Wrap Fee Program Brochure). PRAG will deliver
Investment Management Agreement (IMA) Disclosure
Documents or a Statement of Investment Selection (SIS) for
details on fee structure and account services. These programs
function under a “wrap-fee” billing program which means that
there is one total fee covering the cost of the portfolio manager,
platform fees, transaction (custodial) costs, fees imbedded in
certain types of securities, and the advisor (PRAG) fee.
Management Platforms, acting as billing service providers
calculate the “Program Wrap Fee”, and give instructions to
custodians to debit from the Clients account the fees due. Either
Management Platforms pay the applicable parties, or the
custodian pays PRAG and PRAG then pays the applicable parties.
“Program Wrap Fee” includes the cost of Sub- Managers, Model
Providers, reporting and billing, the Advisory fee (PRAG’s
Advisory fee), and the custodian fee. There are no additional
charges to the client other than the program wrap-fee the client
agrees to for the investment program selected on the
Management Platforms, unless otherwise disclosed in the
IMA/SIS and agreed to by the client. The custodian that executes
transactions and holds securities, and the technology
management platform that provides performance reporting
and other functions, sometimes have minimum fees that
can impact the asset-based fee (expressed in basis points,
percentages or flat fee) that is charged for a particular program.
Minimum fees become effective if the account assets under
management fall below the recommended minimum investment
size. Minimum fees need to be considered when selecting
an investment program. Depending on the amount of funds
available for investment, minimum fees can raise the percentage
cost of assets under management of a particular program. These
programs are as follows:
• Separately Managed Accounts (SMA): In this program,
assets are managed by institutional and/or independent
money managers. In some cases, the program includes
manager due diligence by the Management Platform (for
“approved managers” only), assistance in evaluating
separate account managers, and provides access to a
wide range of managers and investment disciplines,
including available managers not directly approved
by Management Platforms (“available managers”).
The program also includes professional money
management, performance reporting, and associated
services and support.
• Unified Managed Accounts (UMA) and Multi-
Manager Account (MMA) Programs: These
programs combine multiple investment styles
facilitating diversification within an individually
managed account. The program includes professional
money management, manager due diligence, and
performance reporting. Additionally, the UMA and
MMA may include Management Platforms as overlay
portfolio manager to manage the asset allocation of the
account and coordinate trading across investment
sleeves.
• Third Party Strategist-ETF/Mutual Fund Wrap
Program: In this program, assets are allocated across
a range of mutual funds or ETFs. Clients may select one
or more asset allocation portfolio strategies consisting
of either mutual funds or exchange- traded funds (ETFs).
Accounts are managed on a discretionary basis.
Management Platforms develop portfolio asset allocation,
selects the underlying funds populating the respective
model strategy and annually rebalances the client’s
account to the original allocation. This program offers
investment strategies including Aggressive Equity,
Growth Equity, Balanced with Growth, Balanced,
Equity Income and Income portfolios.
• Impact Investing Wrap-Fee Program (PRAG-SRI
Wrap): Portfolios managed under social and
environmentally responsible or Impact Investing criteria
(SRI), such as the High Impact Wrap-Fee Program,
managed by Thomas Moser. It takes into consideration
the individual objectives of each client but may or may not
represent the overall objectives of the client’s total
investment assets. PRAG advisors have access to and may
employ various investment strategies utilizing managers
who either screen their investments or base their entire
investment approach on SRI criteria. PRAG has a
management agreement with First Affirmative Financial
Network (FAFN), an advisory firm that specializes in SRI
investing solutions. PRAG advisors have access to the
strategies and managers under the FAFN network.
PRAG participates in the management fees of the High Impact
Wrap-Fee program. Therefore, the firm, the portfolio
managers, or its advisors could be motivated to recommend
these PRAG strategies over those of other managers. However,
this potential conflict of interest is mitigated by the fact that,
as fiduciaries, the firm, the portfolio managers, and all PRAG
advisors are ethically obligated to make investment
recommendations only in the best interests
of the client
irrespective of any other consideration.
II. Non-wrap-fee programs
Non-wrap-fee programs are also available. In these programs,
the custodial or transaction portion of the fees is charged on
a transactional basis, rather than as a fixed cost based on
assets under management. This approach may make sense for
managing fixed income portfolios, for example, where the
number of transactions is smaller in number than in an equity
portfolio.
These non-wrap-fee portfolios utilize custodians such as
Pershing, o r Schwab Institutional to provide brokerage,
custody, and related services to client accounts. Custodians
such as Schwab, and/or Management Platforms, do not
determine suitability of advice for any client. PRAG is
responsible for all advice and suitability of such advice
regarding these accounts. The Program may cost a client more
or less than purchasing the services separately. Factors bearing
on the relative cost of the Program that would be relevant when
considering the alternative of purchasing the services offered
in the Program separately include the trading activity in a
client's account and the corresponding brokerage commissions
that would be charged for execution of trades, and the fees
charged for investment advisory services. Management
Platforms provide third-party, arms-length, independent
performance reporting and billing under these programs.
The programs are as follows:
• Advisor Directed Models/Representative as
Portfolio Manager: PRAG advisors are provided a set
of tools to construct and manage model portfolios. This
program allows selected financial advisors to manage
client portfolios for a fee plus custodial transaction fees.
PRAG will enter into an Investment Management
Agreement with the client, under which PRG and its
clearing firm, Pershing LLC., or Schwab Institutional
provide services in association with Envestnet Asset
Management, Inc.
• Impact Investing Non-Wrap Fee Program (PRAG-SRI-
Non-Wrap): Portfolios managed under social,
environmental, and sustainability criteria, such as the
High Impact Non-Wrap Fee Program, take into
consideration the individual objectives of each client, but
may or may not represent the overall objectives of the
client’s total investment assets. PRAG advisors have access
to and may employ various investment strategies utilizing
managers who either screen their investments or base
their entire investment approach on SRI and sustainability
criteria. Managed accounts are designed to provide
discretionary management by an Advisor Representative
of the firm and/or SRI sub-managers. PRAG assists each
PRAG-SRI account client in formulating investment
objectives and manages the account within established
guidelines regarding, among other matters,
diversification and designation of securities that may be
purchased.
III. PRAG Investment Consulting (PRAG-IC)
Selected Registered Investment Advisors (RIAs) are
evaluated by the firm for client use. PRAG-IC services may
include assisting clients in identifying their investment
objectives and matching personal and financial data with a
select list of investment managers that meet the PRAG-IC
minimum quantitative and qualitative criteria. The intent of
the program is to have a selected list of high quality and
recognizable independent investment management firms
from which one or more managers are selected to handle the
day-to-day management of client accounts.
Managers selected for use by clients under the PRAG-IC
program need to meet several quantitative and qualitative
criteria. Among the criteria that may be considered are the
manager’s experience, assets under management,
performance record, client retention, the level of client
services provided, investment style, buy and sell disciplines,
capitalization level and the general investment process. Each
advisor must have a client profile that outlines the client’s
stated objectives and risk tolerance.
There is the potential for a conflict of interest in that PRAG
could be motivated to recommend its sponsored Programs to
clients, however, PRAG “approved” managers are evaluated
with the same criteria and parameters as any other manager
on recommending investment to clients.
When recommending outside investment managers, the firm
first analyzes the client's existing portfolio, if applicable, to
determine the investment style that will best facilitate the
desired diversification of the portfolio. The firm then
identifies strategies or managers that exhibit the desired
investment attributes. The firm helps the client measure the
performance of the managers by making comparisons to
appropriate benchmarks. Depending on client objectives, the
firm may advocate an active or passive investment strategy
using a diversified approach. Each Client’s account is
managed on the basis of the Client’s financial situation and
stated investment objectives, in accordance with the Client’s
reasonable investment restrictions imposed by Client on the
management of the assets in the account. Clients will be
contacted at least annually by their Advisor Representative
in order to confirm whether there have been any changes to
the Client’s financial situation, investment objectives or if the
Client would like to impose or modify investment
restrictions on the account.
The firm utilizes a team approach in designing and
supervising client portfolios, including a strategic
relationship with independent money management
technology platforms such as Envestnet Asset Management,
Inc., a nd First Affirmative Financial Network (FAFN), PRAG
offers FINRA & SIPC member broker/dealers s u c h a s
Portfolio Resources Group, Inc., a n d Schwab Institutional as
possible custodial relationships. The firm has access to
independent consultants and financial publications to obtain
information a b o u t companies and managers. The firm also
uses research materials prepared by others, academic
studies, third-party databases, and other publicly available
information.
The firm may at any time terminate the relationship with an
advisor that manages clients’ assets. Factors involved in the
termination of an advisor may include a failure to adhere to
management style or clients’ objectives, a material change in
the professional staff of the advisor, unexplained poor
performance, dispersion of client account performance, or
the firm’s decision to no longer include the advisor as one of
its approved program managers.
IV. Financial Planning
Upon specific request by the client, the Firm may provide
either financial consulting or a comprehensive financial plan
tailored to meet the client’s needs and investment objectives
as described by the client. These services may include, but
are not limited to, the following: identification of financial
goals, preparation of financial condition statements, stock
option exercising strategies, cash flow, net worth, and income
tax projections, insurance analysis, education funding options,
retirement planning, retirement plan distribution strategies,
estate tax analysis and planning, business planning, charitable
planned giving, and asset allocation analysis. During
meetings with the client the investment philosophy, risk
tolerance and investment objectives are discussed.
When appropriate, the firm encourages clients to use the
services of an estate attorney and makes clear that the firm
does not render legal, accounting, or tax advice. The firm will
a l s o not advise the client or act for the client in any legal
proceedings, including bankruptcies, involving securities
held or previously held, or the issuers of those securities. The
firm will not vote proxies for securities held in client
accounts.
As of August 31, 2023, PRAG held $107,846,099 million in
regulatory discretionary assets under management. As of
that same date, PRAG did not hold any non-discretionary
assets under management. PRAG also provides administrative
services such as performance reporting to $293.7 million in
non-discretionary assets as of August 31, 2023, and PRAG’s
affiliated broker/dealer, Portfolio Resources Group, Inc.
(PRG) held $1.4 billion in total client assets.