4. A. Advisory Firm Description
Van Den Berg Management I, Inc. (the “Company” or “Advisor”), a Texas corporation, was founded by
Arnold Van Den Berg in 1974 in order to provide investment management and financial planning
services. Today, the Advisor offers a complete suite of wealth management and financial planning
services under the name Century Management Financial Advisors. In addition, the Advisor serves as
the investment adviser to The CM Advisors Family of Funds under the name CM Fund Advisors. The
Advisor also conducts business under the names Century Management and Century Management
Investment Advisors. The Advisor’s principal owner is Arnold Van Den Berg.
4.B. Types of Advisory Services
The Advisor offers comprehensive wealth management services under the name Century Management
Financial Advisors. These services include the investment management of equity, fixed income, and
mutual fund portfolios; the investment management of retirement plans; and financial planning
services. The Advisor also serves as the investment advisor of a mutual fund. Each of these services
is described in more detail below.
Investment Management Services
The Advisor manages equity, fixed income, and mutual fund portfolios on behalf of its clients, primarily
on a discretionary basis, pursuant to an investment advisory agreement with the client. These services
are typically provided through separate accounts.
For most portfolio management clients, the Advisor will implement an investment strategy based on
the client’s risk tolerance and investment objectives. However, for 401(k) plan clients (“401(k)
Clients”), the Advisor will typically provide plan sponsors with a mutual fund line-up that will allow for
broad diversification so that that a plan participant can actualize a specific investment objective. To
implement these investment strategies (and, in the case of 401(k) Clients, objectives), the Advisor will
use an investment method selected by the client. Each of these investment strategies and methods is
described below.
Investment Strategies: The Advisor’s investment strategies are broadly defined in the following table:
Strategy Risk Tolerance Investment
Objective
Objective Defined
Aggressive
An aggressive investor is willing to
accept a substantial amount of risk
in order to maximize returns
Aggressive
Growth
Long-term growth is
the primary objective
Moderately
Aggressive
A moderately aggressive investor
values higher long-term returns and
is comfortable with higher volatility
Growth
Long-term growth is
primary objective,
income is secondary
Moderate
A moderate investor values growth,
income, and risk reduction equally
Balanced
Long-term growth and
current income are
equally important
Moderately
Conservative
A moderately conservative investor
values preserving principal but is
willing to accept a small amount of
risk to seek some appreciation
Income
& Growth
Income is primary
objective, long-term
growth is secondary
Conservative
A conservative investor values
income and capital preservation
over asset appreciation and is
comfortable with lower returns in
exchange for protecting principal
Income
Income and capital
preservation is the
primary objective
Methods of Investing: There are three primary methods of investment (each, a “Method”) in which
the client may choose for the Advisor to use when implementing the investment strategy or objective.
• Method 1: Mutual Funds, ETFs, and Closed-End Funds: This Method primarily invests in
mutual funds, including open-end mutual funds, closed-end mutual funds, and exchange
traded funds (“ETFs”), to implement the client’s investment strategy.
• Method 2: Individual Stocks and Bonds: This Method primarily invests in individual stocks
and bonds to implement the client’s investment strategy.
• Method 3: Any Type of Investment: This Method may invest in any type of investment,
including mutual funds set forth in Method 1 above and individual stocks and bonds as set
forth in Method 2 above, to implement the client’s investment strategy.
Cash and Cash Equivalent Holdings: Regardless of which Method is authorized by the client, the
Advisor may invest discretionary advisory clients in cash or cash equivalent positions in any percentage
for any length of time (including extended periods of time) when the Advisor, in its sole judgement,
believes markets offer limited investment opportunities or are overpriced.
Conflict of Interest: The Advisor may recommend its separately managed account program, its
managed mutual fund program, or its mutual fund (CM Advisors Fixed Income Fund, a series of the
CM Advisors Family of Funds (the “CM Fund”)) to the client if the Advisor deems such products
appropriate based on the client’s goals, objectives, risk tolerance, and time horizon. The client should
understand that the Advisor’s recommendation of its own products and services creates a potential
conflict of interest in that the Advisor has an incentive to recommend its own products and services
rather than similar products and services of third parties. The client is under no obligation to invest in
the Advisor’s separately managed account programs, its managed mutual fund program, or the CM
Fund.
Retirement Plan Services
We provide discretionary investment management services to retirement plans (including, without
limitation, defined benefit pension plans (e.g., traditional defined benefit and cash balance pension
plans), profit sharing plans, and 401(k) plans) (“Plans”) and non-discretionary investment management
services to 401(k) Clients on an ongoing basis, as requested by the Plan sponsor. We are willing to
accept “Investment Manager” status under Section 3(38) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”) (for discretionary investment management services) or the
designation as a “Co-Fiduciary” under Section 3(21)(A) of ERISA as part of our normal course of
business. Depending on the needs and requests of the Plan sponsor, both our discretionary and non-
discretionary services for Plans generally include assisting Plan sponsors with (1) policy guidance; (2)
investment selection; (3) employee education; and (4) collaboration with the Plan’s third-party advisors
and service providers.
• Policy Guidance - If the Plan has not yet established an investment policy statement (“IPS),
the Advisor may help the Plan sponsor in recommending an appropriate IPS that describes the
Plan’s objectives, risk tolerance, and goals. If the Plan has established an IPS, the Advisor may
review and monitor the IPS for consistency with the Plan’s objectives, and recommend any
changes that the Advisor deems necessary,
• Investment Selection – The Advisor will generally perform the following investment selection
services:
o With respect to Plans receiving discretionary services (“Discretionary Plans”), select or
construct appropriate investments or investment options for the Plan, and with respect
to Plans receiving non-discretionary services (“Non-Discretionary Plans”), recommend
appropriate investments or investment options for the Plan.
o With respect to Plans that include participant-directed investments, select (with
respect to discretionary Plans) or recommend (with respect to Non-discretionary
Plans) a default investment option for the Plan that is a “qualified default investment
alternative” under Section 404(c)(5) of ERISA;
o Monitor the investments or investment options for their continued appropriateness for
the Plan; and
o Provide the Plan, upon request, with comments, analysis, and supporting information
regarding the investments and/or investment options.
In selecting investments for Plans, the Advisor typically uses the investment strategies and
methods described above, under “Investment Management Services.” However, for 401(k)
Clients, the Advisor will typically provide plan sponsors with a mutual fund line-up that will
allow for broad diversification so that a plan participant can actualize one of the investment
objectives described in the chart under “Investment Management Services – Investment
Strategies,” above.
• Employee education – Upon request, the Advisor will generally provide Plan participants with
the following services, subject to travel, expense reimbursement, and quantity limitations:
o Distribution of plan materials, including enrollment books, information regarding
investment options, and other materials, and those provided by the Plan Administrator,
to participants involved in sessions;
o Make available, or direct Plan participants to, written or electronic materials discussing
generally accepted investment principles, including asset allocation and diversification,
for participants involved in sessions;
o Lead virtual or in-person group educational sessions; and
o Conduct virtual or in person individual participant calls or meetings as requested.
• Collaboration – The Advisor will share information with third-party administrators, accountants,
auditors, attorneys, and other advisors to the Plan, as authorized by the Plan.
If the client accounts are part of the Plan, and we accept appointments to provide our services to such
accounts, we acknowledge that we are a fiduciary within the meaning of section 3(38) of ERISA with
respect to the provision
of services identified as “Services Provided as an ERISA Fiduciary” in the
Addendum to the Plan’s investment advisory agreement with the Advisor.
Financial Planning
The Advisor offers three different types of financial plans to clients: (1) Focused Wealth Plans, (2)
Comprehensive Wealth Plans, and (3) Social Security Optimization Plans (collectively, the “Wealth
Plans”). Each of these Wealth Plans is described below.
Focused Wealth Plan: A Focused Wealth Plan is created for new clients as well as existing clients
who don’t have or need a Comprehensive Wealth Plan.
The Focused Wealth Plan provides the client with the following:
• Family Index Number: The individual rate of return designed to help you work towards
achieving your goals and objectives.
• Personalized Cash-Flow Based Planning: Narrowly tailored to identify and address your
specific goals and objectives. Will consider clients’ current assets (stocks, bonds, mutual funds,
CD’s, annuities, real estate holdings, etc.), earned income, investment income, social security,
the possibility of inheritance, gifting, and miscellaneous income and expenses.
• Risk Management Planning: Comprehensive analysis of life, disability, long-term care, and
other risk management solutions.
• Social Security Analysis and Optimization: Custom analysis and comparison of the social
security claiming options that are available.
• Solutions Center: a proprietary cloud-based platform licensed through eMoney Advisors, LLC,
where you will gain access to your own personal financial management website. The Solutions
Center will give you access to your financial information through an interactive portal, and allow
for up-to-date account balances, provide for comprehensive account aggregation, and allow
for multiple customized cash flow and net worth scenario analyses to be performed. You will
also be provided a client vault (“Client Vault”), which will allow you to share and store
documents.
Comprehensive Wealth Plan - The Comprehensive Wealth Plan includes everything in the Focused
Wealth Plan explained above, plus we analyze in detail the areas of insurance, investment, tax,
retirement, and estate planning. We will work with your outside tax, estate, and insurance advisors to
give you more comprehensive specialized knowledge and advice. During this part of the planning
process, we will be your advocate and help you coordinate this advice.
The Comprehensive Wealth Plan will also give you access to the Solutions Center and a Client Vault.
One key element of Solutions Center for Comprehensive Wealth Plans is that your tax, estate, and
insurance advisor can be granted limited access to portions of your financial website that pertain to
their work.
Social Security Optimization Plan- This personalized plan will help clients analyze claiming
strategies, show clients their Social Security income stream under different claiming scenarios, and
help clients take advantage of innovative strategies designed to maximize benefits.
Limitations: The projections or other information generated and presented by the Advisor in Wealth
Plans regarding the likelihood of various investment outcomes are hypothetical in nature and do not
reflect actual investment results. There are risks associated with investing, including the risk of losing
all or a portion of your invested capital. We recommend that in addition to working with the Advisor,
clients work closely with their attorneys, accountants, insurance agents, real estate brokers and other
investment professionals.
Separate Agreement: Clients are required to sign a separate agreement engaging the Advisor to
prepare Wealth Plans, which outlines the terms of the service. Wealth Plans generally are provided on
a one-time basis and are not intended to be used as the basis for an ongoing financial planning
arrangement; however, the Advisor may agree to perform ongoing financial planning services to clients
in certain cases. The results contained in Wealth Plans rely heavily on information the client has
provided to the Advisor. Some or all of the information, goals, and/or objectives furnished by the client
to the Advisor may change after the Wealth Plan has been presented to the client. It is important to
note that any changes to the inputs, variables, or information provided to the Advisor may render the
Plan less useful and, in some cases, obsolete.
Business Succession and Exit Planning Consulting Services
The Advisor offers business succession and exit planning consulting services to businesses and
business owners. The business succession and exit planning consulting services are designed to assist
businesses and business owners prepare for leadership transition or sale. The business succession
and exit planning consulting services include development of a summary report of business succession
or exit plan readiness and development of a business succession or exit plan assessment and plan
(“Business Exit Plan”), which includes a detail analysis of one or more of the following areas: (i)
finance, (ii) planning, (iii) revenue and profit, and (iv) operations. The Advisor will work with your
outside legal, accounting, tax, estate, and other professional advisors to give you more comprehensive
specialized knowledge and advice. In addition, the Advisor offers to assist clients in implementing the
Business Exit Plan.
Limitations: The reports, assessments, plans or other information generated and presented by the
Advisor regarding business succession and exit planning recommendations and the likelihood of
various outcomes are hypothetical in nature and do not reflect actual success. Changes in various
circumstances, including changes in economic and market conditions and employee and family related
issues may affect the outcome of the Business Exit Plan and its implementation. The Business Exit
Plan and its implementation may not be successful as anticipated. We recommend that in addition to
working with the Adviser, clients work closely with their attorneys, accountants, tax advisors, insurance
agents, business brokers and other investment professionals.
Separate Agreement: Clients are required to sign a separate agreement engaging the Advisor to
provide the business succession and exit planning consulting services. The results contained in the
reports, assessments or plans rely heavily on information the client has provided to the Advisor. Some
or all of the information, goals, and/or objectives furnished by the client to the Advisory may change
after the reports, assessments or plans have been presented to the client. It is important to note that
any changes to the inputs, variables, or information provided to the Advisor may render the reports,
assessments and plans less useful and, in some cases, obsolete.
General Consulting Services
In addition to the foregoing services, the Advisor may provide general consulting services to clients.
These services are provided as and when requested by the client and agreed to by the Advisor and
may include the provision of non-discretionary investment advisory services.
Mutual Fund Advisory Services
CM Fund Advisors serves as investment advisor and portfolio manager to the CM Fund, which has an
investment strategy that generally corresponds to the Conservative Strategy for separate accounts.
4.C. Client Investment Objectives/Restrictions
At the outset of each client engagement, the Advisor spends time with the client, asking questions,
discussing the client’s investment experience and financial circumstances, tolerance for risk, and
broadly identifying major goals of the client. This information provided by the client guides our
management of the client’s account. It is the client’s responsibility to promptly inform the Advisor if
the information provided to the Advisor becomes materially inaccurate, or if the client’s investment
objective or risk tolerance has changed.
Discretionary advisory clients may request certain reasonable restrictions on the Advisor in the
management of their accounts, such as prohibiting the inclusion of certain types of investments in an
investment portfolio or prohibiting the sale of certain investments held in the account at the
commencement of the relationship, with written notice to the Advisor. Each client should note,
however, that restrictions, if accepted by the Advisor, may adversely affect the composition and
performance of the client’s investment portfolio. Each client should also note that his or her investment
portfolio is treated individually by giving consideration to each purchase or sale for the client’s account.
For these and other reasons, performance of client investment portfolios within the same investment
objectives, goals and/or risk tolerance may differ and clients should not expect that the composition
or performance of their investment portfolios would necessarily be consistent with similar clients of
the Advisor.
4.D. Wrap-Fee Programs
The Advisor typically does not participate in wrap-fee programs at this time.
4.E. Assets Under Management
As of January 31, 2024, the Advisor had $500,531,825 in assets under management. This figure
includes all accounts, including the CM Advisors Fixed Income Fund, for which the Advisor has
discretion and is paid a management fee.
• Discretionary basis: $500,531,825.
• Non-Discretionary basis: $0