This Disclosure document is being offered to you by Capital Advisor Network (“CAN” 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.
Our Firm became a registered investment adviser in July 2018 and is owned by Peter K Johnson,
Jared Wickes, Billy Evans, Venture Family Office LLC, and Malcom Brown. Jeffrey Smith has been
the Chief Compliance Officer of the Firm since 2023.
We are committed to helping clients build, manage and preserve their wealth. Our Firm provides
services that help 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 CAN execute an Investment Management Agreement.
INVESTMENT AND WEALTH MANAGEMENT AND SUPERVISION SERVICES
We offer advisory accounts on a discretionary and nondiscretionary basis. For discretionary
accounts, 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 but within the expected
investment guidelines. We may accept accounts with certain restrictions, if circumstances
warrant. We primarily allocate client assets among individual stocks, bonds, exchange traded
funds (“ETFs”), options, mutual funds, cash and other public and private securities or investments.
All of which are considered asset allocation categories for the client’s investment strategy.
Portfolios will be designed to meet a particular investment goal, determined to be suitable to the
client’s circumstances. Once the appropriate portfolio has been determined, portfolios are
continuously and regularly monitored, and if necessary, rebalanced based upon the client’s
individual needs, stated goals and objectives.
During personal discussions with clients, we usually 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 and risk
tolerances, we develop a client’s personal profile and investment plan. We then create and
manage the client’s investments based on that policy 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 types of investments to be included in a client’s portfolio and have
allocated the assets, we provide ongoing investment review and management services.
With our discretionary relationship, we will make changes to the portfolio, as we deem
appropriate, to meet client financial objectives and risk tolerances. We trade these portfolios
based on the combination of our market views and client objectives, using our investment process.
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. Clients have the
ability to leave standing instructions with us to refrain from investing in particular industries or
invest in limited amounts of securities.
Clients have a direct and beneficial interest in their securities, rather than an undivided interest in
a pool of securities. We do have limited authority to direct the Custodian to deduct our investment
advisory fees from your accounts, but only with the appropriate written authorization from clients.
Where appropriate, we provide advice about any type of legacy position held in client portfolios.
Typically, these are assets that are ineligible to be custodied at our primary custodian. Clients will
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engage us to advise on certain investment products that are not maintained at their primary
custodian, such as variable life insurance, annuity contracts, and assets held in employer
sponsored retirement plans and qualified tuition plans (e.g., 529 plans).
Clients 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 could adversely affect an account’s
performance. This could result in capital losses in your account.
FINANCIAL PLANNING
Through the financial planning process, our team strives to engage our clients in conversations
around the client’s goals, objectives, priorities, risk tolerances, vision, and legacy – both for the
near term as well as for future generations. With the unique goals and circumstances of each
client in mind, our team will offer financial planning ideas and strategies to address the client’s
holistic financial picture, including estate, income tax, charitable, cash flow, wealth transfer, and
client legacy objectives. Our team partners with our client’s other advisors (CPAs, Enrolled Agents,
Estate Attorneys, Insurance Brokers, 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 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, expenses, risk, and liquidity factors for
each goal. This includes IRA and qualified plans, taxable, and trust accounts that require
special attention
Design of a risk management plan including risk tolerance, risk avoidance, mitigation, and
transfer, including liquidity as well as various insurance and possible company benefits;
and
Crafting and implementation of, in conjunction with your estate and/or corporate
attorneys as tax adviser, an estate plan to provide for you and/or your heirs in the event
of an incapacity or death
Upon request, a written evaluation of each client's initial situation or Financial Plan is provided to
the client. An annual review will be provided by the Adviser, if indicated by the Client and Adviser
per the Agreement. More frequent reviews occur but are not necessarily communicated to the
client unless immediate changes are recommended.
CONSULTING SERVICES
We also provide clients investment advice on a more-limited basis on one-or-more isolated areas
of concern such as divorce planning, estate planning, real estate, retirement planning, or any
other specific topic. Additionally, we provide advice on non-securities matters about the
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rendering of estate planning, insurance, real estate, and/or annuity advice or any other business
advisory / consulting services for equity or debt investments in privately held businesses. In these
cases, 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 multiple investment
managers, brokers, banks, custodians, or insurance companies (“outside investment firms”). You
must independently evaluate these outside investment firms before opening an account or
transacting business and have the right to effect business through any firm you choose. You have
the right to choose whether to follow the consulting advice that we provide.
THIRD PARTY MONEY MANAGERS (“TPMM”)
Our firm utilizes the services of a TPMM for the management of client accounts. Investment
advice and trading of securities will only be offered by or through the chosen TPMM. Our firm will
not offer advice on any specific securities or other investments in connection with this service.
Prior to referring clients, our firm will provide initial due diligence on third party money managers
and ongoing reviews of their management of client accounts. In order to assist in the selection of
a TPMM, our firm
will gather client information pertaining to financial situation, investment
objectives, and reasonable restrictions to be imposed upon the management of the account.
Our firm will periodically review third party money manager reports provided to the client at least
annually. Our firm will contact clients from time to time in order to review their financial situation
and objectives; communicate information to third party money managers as warranted; and assist
the client in understanding and evaluating the services provided by the TPMM. Clients will be
expected to notify our firm of any changes in their financial situation, investment objectives, or
account restrictions that could affect their financial standing.
RETIREMENT PLAN ADVISORY SERVICES
Retirement Plan Advisory Services consists of helping employer plan sponsors to establish,
monitor and review their company's retirement plan. As the needs of the plan sponsor dictate,
areas of advising could include investment selection and monitoring, plan structure, and
participant education.
Pursuant to Section 402(c)(3) of ERISA, the client may appoint us as the Plan’s “investment
manager” with respect to the Plan’s portfolio of investment options. We acknowledge that we
are registered as an investment adviser under the SEC. Our firm acts as a “fiduciary” within the
meaning of Section 3(21) and 3(38) of ERISA with respect to the Plan. We offer advisory services
to employer sponsored retirement plans such as 401(k), 457, & 403(b). On the plan level, we
manage the investment line-up making changes as necessary as well as providing risk-based
investment models for the participants. On the individual participant level, we manage risk-based
models using the current investment lineup based on risk tolerance of the individual investor. For
employer-sponsored retirement plans with participant-directed investments, our firm provides
its advisory services as an investment advisor as defined under Section 3(21) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”).
When serving as an ERISA 3(21) investment adviser, the Plan Sponsor and our Firm share fiduciary
responsibility. The Plan Sponsor retains ultimate decision-making authority for the investments
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and may accept or reject the recommendations in accordance with the terms of a separate ERISA
3(21) Plan Sponsor Investment Management Agreement between our Firm and the Plan
Sponsor. Under the 3(21) agreements, our Firm can provide the following services to the Plan
Sponsor:
• Review or Development of an Investment Policy Statement
• Perform Due Diligence on Money Managers
• Provide Initial Investment and Management Selection - Our Firm typically uses
mutual funds/managed accounts/collective trusts/cash equivalents to structure
portfolios designed to meet client objectives and risk profiles.
• Provide ongoing Performance Evaluation and Monitoring of Money Mangers
• Make Investment Recommendations when necessary
• Retirement Plan Services Analysis - Our Firm will conduct an analysis of a client’s
retirement plan to evaluate the services currently provided to the client by third
parties. The areas of analysis may include asset management services, record
keeping, administration, customer service, participant education, etc. These services
may also include a cost/benefit analysis, recommendation of alternative vendors,
facilitation of the RFP process for solicitation of a new vendor, and/or assistance in
fee negotiations with proposed vendors.
• Provide Employee Education Services - Our Firm will provide enrollment and
educational services the content of the program will be generic in nature.
When serving as a result of the 3(38) appointments, we are granted full trading authority over the
Plan and have the responsibility for the selection and monitoring of all investment options offered
under the Plan in accordance with the investment policy statement and its underlying investment
objectives and strategies for the Plan. Plan participants have the ability to exercise control over
the investment selection from the plans line up of investments, and we have no authority or
discretion to direct the investment of assets of any participant’s account under the Plan.
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): (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) rollover 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). 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 Adviser. 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
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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 also reviewed by our Firm’s Chief Compliance Officer in a best effort to determine that the
recommendation to a client was reasonable or that the client has determined to make the rollover
after being provided ample information about their options. No client is under any obligation to
roll over plan assets to an IRA advised by our Firm or to engage our Firm to monitor and/or advise
on the account while maintained with the client's employer. Our Firm’s Chief Compliance Officer
remains available to address any questions that a client or prospective client has regarding this
disclosure.
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.
ASSET STRUCTURING AND ASSET PRESERVATION SERVICES
CAN likewise provides services to current or prospective, high-net-worth clients, in connection
with third-party service providers, involving the structuring of the entity and its assets as well as
the implementation of asset preservation strategies. Payment for these services is made by a third
party who directly receives fees or compensation from the client or prospective client.
INTRODUCTION TO PRIVATE INVESTMENT OPPORTUNITIES
Where appropriate, CAN may introduce (but not necessarily recommend) available opportunities
with private fund managers or other issuers of private investments (together “Private
Investments”) to the appropriate clients. The Firm or its supervised persons make these
introductions to Private Investments solely as an accommodation to clients and not as an
investment advisory service.
ASSETS
As of December 31, 2023, CAN had a total of $95,753,862.68 of assets under management and
advisement. Of these assets, the discretionary assets under management or advisement were
$70,277,209.72 while the non-discretionary assets under management or advisement totaled
$25,478,862.68.