Cannon Wealth Management Services, LLC (“CWMS” or the “Firm”) is a limited liability company
organized in the State of North Carolina. CWMS is an investment advisory firm registered with the United
States Securities and Exchange Commission (“SEC”). CWMS is wholly owned by William Amburn,
Matthew Hearn, Joseph Perkins and Raymond Wilcox. The CWMS Wrap Fee Program (the “Program”) is
an investment advisory program sponsored by CWMS. This Brochure describes the Program as it relates
to clients receiving services through the Program. The Program is only made available to clients of CWMS
who received advisory services from CWMS personnel while such personnel were investment adviser
representatives of a non-affiliated investment adviser (the “Transition Clients”). The provision of
investment management services through the CWMS Wrap Fee Program is limited to the Transition Clients.
In addition to the Program, the Firm offers a variety of advisory services, which include financial planning
and consulting services, family office services and investment management services under different
arrangements then those described in this Brochure. Information about these services is contained in the
Firm’s Form ADV Part 2A. New clients of CWMS, who are not Transition Clients, are not provided
investment management and other services through the Program.
A. Description of the Program
CWMS provides investment management services as the sponsor and manager of the Program. The
Program utilizes registered mutual funds and exchange traded funds (“ETFs”), but will also utilize equity
securities, corporate bonds, REITS, private funds/alternative investments and variable annuities, among
others, if we determine such investments fit within a client’s objectives and are in the best interest of our
clients. Under the Program the client pays a single fee (“Program Fee”) for CWMS’s investment advice,
custody and commissions for securities transactions executed through the Program custodian/broker-dealer,
as described below. See Additional Fees and Expenses below for information regarding fees and expenses
not included in the Program Fee.
As part of the Program, CWMS may further recommend to clients that all or a portion of their investment
portfolio be managed on a discretionary basis by one or more unaffiliated money managers or investment
platforms (“External Managers”). The client may be required to enter into a separate agreement with the
External Manager(s), which will set forth the terms and conditions of the client’s engagement of the
External Manager. CWMS generally renders services to the client relative to the discretionary selection of
External Managers. CWMS also assists in establishing the client’s investment objectives for the assets
managed by External Managers, monitors and reviews the account performance and defines any restrictions
on the account. The investment management fees charged by the designated External Managers, are
exclusive of, and in addition to, the annual advisory fee charged by CWMS. Commissions for securities
transactions at the direction of an External Manager executed at Schwab, as defined below, are included in
the Program Fee. Any commissions for securities transactions at the direction of an External Manager
executed at a broker-dealer/custodian other than Schwab are in addition to the Program Fee.
Prior to receiving services under the Program, clients are required to enter into a written agreement with
CWMS setting forth the relevant terms and conditions of the advisory relationship. Client must also open
a securities brokerage account and complete a new account agreement with Charles Schwab & Co., Inc.
(“Schwab”), which is a “qualified custodian” as that term is described in Rule 206(4)-2 of the Investment
Advisers Act of 1940.
Note for IRA and Retirement Plan Clients: When CWMS provides investment advice to you regarding
your retirement plan account or individual retirement account, CWMS is 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. The way CWMS makes money creates some conflicts with
your interests, so CWMS operates under a special rule that requires CWMS to act in your best interest and
not put CWMS’s interest ahead of yours.
B. The Program Fee
The Program Fee covers CWMS’s advisory services, custody and commissions for securities transactions
effected through Schwab, whether on the instruction of CWMS or an External Manager. The Program Fee
does not cover the investment management fees charged by the designated External Managers. The number
of transactions made in clients’ accounts, the size of the accounts, and the securities used to construct a
portfolio, as well as the commissions charged for each transaction, determines the relative cost of the
Program versus paying for execution on a per transaction basis and paying a separate fee for advisory
services. Participants in the Program may pay a higher or lower aggregate fee than if the investment
management and brokerage services are purchased separately. CWMS does not charge its clients higher
advisory fees based on their trading activity, but clients should be aware that CWMS may have an incentive
to limit its trading activities in client accounts because CWMS is charged for executed trades. CWMS
addresses this conflict of interest by this disclosure and by its policies and procedures which work to ensure
that accounts are managed in accordance with clients’ goals and objectives without consideration of trading
costs incurred by CWMS.
Cash Positions
At any specific point in time, depending upon perceived or anticipated market conditions or events
(there being no guarantee that such anticipated market conditions/events will occur), CWMS may
maintain cash positions for defensive or other purposes. All cash positions (money markets, etc.)
will be included as part of assets under management for purposes of calculating the Program Fee.
Additional Fees and Expenses
In addition to the Program Fee, clients will be responsible for transfer taxes, odd lot differentials,
exchange fees, interest charges, ADR processing fees and any charges, taxes or other fees mandated
by any federal, state or other applicable law, retirement plan account fees (where applicable),
electronic fund and wire fees. Furthermore, CWMS fees do not cover transaction fees or “trade
away” fees imposed for trades placed away from Schwab.
Fee Schedule
CWMS charges an annual Program Fee that is agreed upon with each client and set forth in an
agreement executed by CWMS and the client. The Program Fee is based on a percentage of the
value of assets under management and the Program Fee for the initial month shall be paid, on a pro
rata basis, in arrears, based on the average daily balance of the net billable assets under management
at the end of such initial month. For subsequent months, the Program Fee shall be paid, in arrears,
based on the average daily balance of the net billable assets under management at the end of that
month, as provided by third-party sources, such as pricing services, custodians, fund administrators,
and client-provided sources. The maximum annual Program Fee is 1.80%.
As described above, the Program is only made available to Transition Clients. The Program Fee
for Transition Clients are a continuation of each individual Transition Client’s fee schedule with
the non-affiliate investment adviser through which CWMS personnel previously provided
investment advisory services pursuant to a wrap fee program. The Program Fee charged by the
Firm will apply to all of the client’s assets in the Program, unless specifically excluded in the client
agreement. The Program Fee does not cover the investment management fees charged by the
designated External Managers. Although CWMS believes that its fees are competitive, clients
should understand that lower fees for comparable services may be available from other sources and
firms.
C. Compensation for Recommending the Program
CWMS does not have any arrangements where it receives an economic benefit from a third party for
recommending the Program.