A. Condor Capital Wealth Management (the “Registrant”) is a New Jersey corporation
formed on September 2, 1988. The Registrant became registered as an Investment
Adviser Firm in November 1988. The Registrant is principally owned by Kenneth
Schapiro, the Registrant’s President.
B.
INVESTMENT ADVISORY SERVICES
The Registrant provides discretionary and/or non-discretionary investment advisory
services on a fee-only basis. The Registrant’s annual investment advisory fee is based
upon a percentage (%) of the market value of the assets placed under the Registrant’s
management. Before engaging the Registrant to provide investment advisory services,
clients are required to enter into an Investment Advisory Agreement with Registrant
setting forth the terms and conditions of the engagement (including termination),
describing the scope of the services to be provided, and the fee that is due from the client.
Before Registrant provides investment advisory services, an investment adviser
representative will ascertain each client’s investment objectives. Thereafter, the
Registrant will allocate and/or recommend that the client allocate investment assets
consistent with the designated investment objectives. Once allocated, the Registrant
provides ongoing monitoring and review of account performance and asset allocation as
compared to client investment objectives
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
The Registrant may provide financial planning and/or consulting services (including
investment and non-investment related matters, including estate planning, insurance
planning, etc.) on a stand-alone separate fee basis.
Prior to engaging the Registrant to provide planning or consulting services, clients are
generally required to enter into a Financial Planning and Consulting Agreement with
Registrant setting forth the terms and conditions of the engagement (including
termination), describing the scope of the services to be provided, and the portion of the
fee that is due from the client prior to Registrant commencing services. If requested by
the client, Registrant may recommend the services of other professionals for
implementation purposes. The client is under no obligation to engage the services of any
such recommended professional. The client retains absolute discretion over all such
implementation decisions and is free to accept or reject any recommendation from the
Registrant.
If the client engages any recommended unaffiliated professional, and a dispute arises
thereafter relative to such engagement, the client agrees to seek recourse exclusively from
and against the engaged professional. At all times, the engaged licensed professional(s)
(i.e., attorney, accountant, insurance agent, etc.), and not the Registrant, shall be
responsible for the quality and competency of the services provided.
It remains the client’s responsibility to promptly notify the Registrant if there is ever any
change in their financial situation or investment objectives for the purpose of reviewing,
evaluating or revising Registrant’s previous recommendations and/or services.
PENSION CONSULTING
Registrant may be engaged to render consulting services to the sponsors of "participant-
directed" retirement plans established by the sponsors pursuant to Section 404(c) of
ERISA. Section 404(c) permits a Plan participant to exercise control over the assets
contained in his/her individual retirement account.
To the extent that the plan sponsor engages the Registrant in an ERISA Section 3(21)
capacity, the Registrant will assist with the selection and/or monitoring of investment
options (generally open-end mutual funds and exchange traded funds) from which plan
participants shall choose in self-directing the investments for their individual plan
retirement accounts.
If the plan sponsor chooses to engage the Registrant in an ERISA Section 3(38) capacity,
Registrant may provide the same services as described above, but may also: create
specific asset allocation models that Registrant manages on a discretionary basis, which
plan participants may choose in managing their individual retirement account; and/or
modify the investment options made available to plan participants on a discretionary
basis.
MISCELLANEOUS
Limitations of Financial Planning and Non-Investment Consulting/Implementation
Services. As indicated above, to the extent requested by a client, Registrant may provide
financial planning and related consulting services. Neither the Registrant nor its
investment adviser representatives assist clients with the implementation of any financial
plan, unless they have agreed to do so in writing. The Registrant does not monitor a
client’s financial plan, and it is the client’s responsibility to revisit the financial plan with
the Registrant, if desired.
Registrant does not serve as an attorney, accountant, or insurance agency, and no portion
of its services should be construed as legal, accounting, or insurance brokerage services.
Accordingly, Registrant does not prepare estate planning documents, tax returns or sell
insurance products. To the extent requested by a client, Registrant may recommend the
services of other professionals for certain non-investment implementation purpose (i.e.,
attorneys, accountants, insurance agents, etc.). Clients are reminded that they are under
no obligation to engage the services of any such recommended professional. The client
retains absolute discretion over all such implementation decisions and is free to accept or
reject any recommendation made by Registrant or its representatives.
If the client engages any unaffiliated recommended professional, and a dispute arises
thereafter relative to such engagement, the client agrees to seek recourse exclusively from
and against the engaged professional. At all times, the engaged licensed professional[s]
(i.e., attorney, accountant, insurance agent, etc.), and not the Registrant, shall be
responsible for the quality and competency of the services provided.
Retirement Rollovers-Potential for Conflict of Interest: A client or prospective client
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) roll over 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). If Registrant recommends that a client roll over
their retirement plan assets into an account to be managed by Registrant, such a
recommendation creates a conflict of interest if Registrant will earn new (or increase its
current) compensation as a result of the rollover. If Registrant provides a
recommendation as to whether a client should engage in a rollover or not (whether it is
from an employer’s plan or an existing IRA), Registrant is acting as 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. No client is
under any obligation to roll over retirement plan assets to an account managed by
Registrant, whether it is from an employer’s plan or an existing IRA.
Non-Discretionary Service Limitations. Clients that determine to engage Registrant on
a non-discretionary investment advisory basis must be willing to accept that Registrant
cannot effect any account transactions without obtaining prior consent to any such
transaction(s) from the client. Therefore, in the event that Registrant would like to make a
transaction for a client’s account (including an individual holding or in the event of
general market correction), and the client is unavailable, Registrant will be unable to
effect the account transaction(s) (as it would for its discretionary clients) without first
obtaining the client’s consent.
Account Aggregation Tools. In conjunction with the services provided by third party
service providers, the Registrant may also provide periodic comprehensive reporting
services, which can incorporate all of the client’s investment assets including those
investment assets that are not part of the assets managed by the Registrant (the “Excluded
Assets”). The Registrant’s service relative to the Excluded Assets is limited to reporting
services only, which does not include investment implementation.
Because the Registrant does not have trading authority for the Excluded Assets, to the
extent applicable to the nature of the Excluded Assets (assets over which the client
maintains trading authority vs. trading authority designated to another investment
professional), the client (and/or the other investment professional), and not the Registrant,
shall be exclusively responsible for directly implementing any recommendations relative
to the Excluded Assets. Rather, the client and/or their other advisors that maintain trading
authority, and not the Registrant, shall be exclusively responsible for the investment
performance of the Excluded Assets.
Without limiting the above, the Registrant shall not be responsible for any
implementation error (timing, trading, etc.) relative to the Excluded Assets. In the event
the client desires that the Registrant provide investment management services (whereby
the Registrant would have trading authority) with respect to the Excluded Assets, the
client may engage the Registrant to do so pursuant to the terms and conditions of the
Investment Advisory Agreement between the Registrant and the client.
Use of Mutual and Exchange Traded Funds: Most mutual funds and exchange traded
funds are available directly to the public. Therefore, a prospective client can obtain many
of the funds that may be utilized by Registrant independent of engaging Registrant as an
investment advisor. However, if a prospective client determines to do so, he/she will not
receive the Registrant’s initial and ongoing investment advisory services.
In addition to Registrant’s investment advisory fee described below, and transaction
and/or custodial fees discussed below, clients will also incur, relative to all mutual fund
and exchange traded fund purchases, charges imposed at the fund level (e.g.,
management fees and other fund expenses).
Private Investment Funds. Registrant may recommend that certain qualified clients
consider an investment in unaffiliated private investment funds. Registrant’s role relative
to the private investment funds shall be limited to its initial and ongoing due diligence
and investment monitoring services. Registrant’s clients are under absolutely no
obligation to consider or make an investment in a private investment fund(s).
Risks: Private investment funds generally involve various risk factors, including, but not
limited to, potential for complete loss of principal, liquidity constraints and lack of
transparency, a complete discussion of which is set forth in each fund’s offering
documents, which will be provided to each client for review and consideration. Unlike
liquid investments that a client may own, private investment funds do not provide daily
liquidity or pricing. Each prospective client investor will be required to complete a
Subscription Agreement, pursuant to which the client shall establish that he/she is
qualified for investment in the fund, and acknowledges and accepts the various risk
factors that are associated with such an investment.
Valuation: If Registrant bills an investment advisory fee based upon the value of private
investment funds or otherwise references private investment funds owned by the client on
any supplemental account reports prepared by Registrant, the value for all private
investment funds owned by the client will reflect the most recent valuation provided by
the fund sponsor. The current value of any private investment fund could be significantly
more or less than the original purchase price or the price reflected in any supplemental
account report.
Socially Responsible (ESG) Investing Limitations. Socially Responsible Investing
involves the incorporation of Environmental, Social and Governance (“ESG”)
considerations into the investment due diligence process. ESG investing
incorporates a
set of criteria/factors used in evaluating potential investments: Environmental (i.e.,
considers how a company safeguards the environment); Social (i.e., the manner in which
a company manages relationships with its employees, customers, and the communities
in which it operates); and Governance (i.e., company management considerations). The
number of companies that meet an acceptable ESG mandate can be limited when
compared to those that do not and could underperform broad market indices. Investors
must accept these limitations, including potential for underperformance.
Correspondingly, the number of ESG mutual funds and exchange-traded funds are
limited when compared to those that do not maintain such a mandate. As with any type of
investment (including any investment and/or investment strategies recommended and/or
undertaken by Registrant), there can be no assurance that investment in ESG securities or
funds will be profitable or prove successful. Registrant does not maintain or advocate an
ESG investment strategy but will seek to employ ESG if directed by a client to do so. If
implemented, Registrant shall rely upon the assessments undertaken by the unaffiliated
mutual fund, exchange traded fund or separate account portfolio manager to determine
that the fund’s or portfolio’s underlying company securities meet a socially responsible
mandate.
Cryptocurrency: For clients who want exposure to cryptocurrencies, including Bitcoin,
the Registrant will consider investment in corresponding exchange traded securities, or an
allocation to separate account managers and/or private funds that provide cryptocurrency
exposure. Crypto is a digital currency that can be used to buy goods and services, but
uses an online ledger with strong cryptography (i.e., a method of protecting information
and communications with codes) to secure online transactions. Unlike conventional
currencies issued by a monetary authority, cryptocurrencies are generally not controlled
or regulated and their price is determined by the supply and demand of their
market. Cryptocurrency is currently considered to be a speculative investment. The
speculative nature of cryptocurrencies notwithstanding, the Registrant may (but is not
obligated to) utilize crypto exposure in one or more of its asset allocation strategies for
diversification purposes.
Investment in cryptocurrencies is subject to the potential for liquidity constraints, extreme
price volatility and complete loss of principal.
Clients can notify the Registrant, in writing, to exclude cryptocurrency exposure from
their accounts. Absent the Registrant’s receipt of such written notice from the client, the
Registrant may (but is not obligated to) utilize cryptocurrency as part of its asset
allocation strategies for client accounts.
Independent Managers. Registrant may recommend that the client allocate a portion of
a client’s investment assets among unaffiliated independent investment managers
(“Independent Manager(s)”) in accordance with the client’s designated investment
objective(s). In such situations, the Independent Manager(s) will have day-to-day
responsibility for the active discretionary management of the allocated assets. Registrant
will continue to render investment supervisory services to the client relative to the
ongoing monitoring and review of account performance, asset allocation, and client
investment objectives. The Registrant generally considers the following factors when
recommending Independent Manager(s): the client’s designated investment objective(s),
management style, performance, reputation, financial strength, reporting, pricing, and
research. The management fees, which may include performance based fees, are charged
by the designated Independent Manager(s) are exclusive of, and in addition to,
Registrant’s ongoing investment advisory fee, subject to the terms and conditions of a
separate agreement between the client and the Independent Manager(s). Registrant’s
advisory fee is set forth in the fee schedule at Item 5 below.
Cash Positions. Registrant continues to treat cash as an asset class. As such, unless
determined to the contrary by Registrant, all cash positions (money markets, etc.) shall
continue to be included as part of assets under management for purposes of calculating
Registrant’s advisory fee. At any specific point in time, depending upon perceived or
anticipated market conditions/events (there being no guarantee that such anticipated
market conditions/events will occur), Registrant may maintain cash positions for
defensive purposes. In addition, while assets are maintained in cash, such amounts could
miss market advances. Depending upon current yields, at any point in time, Registrant’s
advisory fee could exceed the interest paid by the client’s money market fund.
Cash Sweep Accounts. Certain account custodians can require that cash proceeds from
account transactions or new deposits, be swept to and/or initially maintained in a
specific custodian designated sweep account. The yield on the sweep account will
generally be lower than those available for other money market accounts. When this
occurs, to help mitigate the corresponding yield dispersion Registrant shall (usually
within 30 days thereafter) generally (with exceptions) purchase a higher yielding money
market fund (or other type security) available on the custodian’s platform, unless
Registrant reasonably anticipates that it will utilize the cash proceeds during the
subsequent 30-day period to purchase additional investments for the client’s account.
Exceptions and/or modifications can and will occur with respect to all or a portion of the
cash balances for various reasons, including, but not limited to the amount of dispersion
between the sweep account and a money market fund, the size of the cash balance, an
indication from the client of an imminent need for such cash, or the client has a
demonstrated history of writing checks from the account.
The above does not apply to the cash component maintained within a Registrant actively
managed investment strategy (the cash balances for which shall generally remain in the
custodian designated cash sweep account), an indication from the client of a need for
access to such cash, assets allocated to an unaffiliated investment manager and cash
balances maintained for fee billing purposes.
The client shall remain exclusively responsible for yield dispersion/cash balance
decisions and corresponding transactions for cash balances maintained in any Registrant
unmanaged accounts.
Interval Funds/Risks and Limitations: Where appropriate, Registrant may utilize
interval funds (and other types of securities that could pose additional risks, including
lack of liquidity and restrictions on withdrawals). An interval fund is a non-traditional
type of closed-end mutual fund that periodically offers to buy back a percentage of
outstanding shares from shareholders. Investments in an interval fund involve additional
risk, including lack of liquidity and restrictions on withdrawals.
During any time periods outside of the specified repurchase offer window(s), investors
will be unable to sell their shares of the interval fund. There is no assurance that an
investor will be able to tender shares when or in the amount desired. There can also be
situations where an interval fund has a limited amount of capacity to repurchase shares
and may not be able to fulfill all purchase orders. In addition, the eventual sale price for
the interval fund could be less than the interval fund value on the date that the sale was
requested.
While an internal fund periodically offers to repurchase a portion of its securities, there is
no guarantee that investors may sell their shares at any given time or in the desired
amount. As interval funds can expose investors to liquidity risk, investors should consider
interval fund shares to be an illiquid investment. Typically, the interval funds are not
listed on any securities exchange and are not publicly traded. Therefore, there is no
secondary market for the fund’s shares.
Because these types of investments involve certain additional risk, these funds will only
be utilized when consistent with a client’s investment objectives, individual situation,
suitability, tolerance for risk and liquidity needs. Investment should be avoided where an
investor has a short-term investing horizon and/or cannot bear the loss of some, or all, of
the investment. There can be no assurance that an interval fund investment will prove
profitable or successful. In light of these enhanced risks, a client may direct Registrant, in
writing, not to purchase interval funds for the client’s account.
Portfolio Activity. Registrant has a fiduciary duty to provide services consistent with the
client’s best interest. As part of its investment advisory services, Registrant will review
client portfolios on an ongoing basis to determine if any changes are necessary based
upon various factors, including, but not limited to, investment performance, fund
manager tenure, style drift, account additions/withdrawals, and/or a change in the client’s
investment objective. Based upon these factors, there may be extended periods of time
when Registrant determines that changes to a client’s portfolio are neither necessary nor
prudent. Clients nonetheless remain subject to the fees described in Item 5 below during
periods of account inactivity.
Client Obligations. In performing its services, Registrant shall not be required to verify
any information received from the client or from the client’s other professionals, and is
expressly authorized to rely thereon. Moreover, each client is advised that it remains their
responsibility to promptly notify the Registrant if there is ever any change in their
financial situation or investment objectives for the purpose of reviewing, evaluating or
revising Registrant’s previous recommendations and/or services.
Cybersecurity Risk. The information technology systems and networks that Registrant
and its third-party service providers use to provide services to Registrant’s clients employ
various controls, which are designed to prevent cybersecurity incidents stemming from
intentional or unintentional actions that could cause significant interruptions in
Registrant’s operations and result in the unauthorized acquisition or use of clients’
confidential or non-public personal information. Clients and Registrant are nonetheless
subject to the risk of cybersecurity incidents that could ultimately cause them to incur
losses, including for example: financial losses, cost and reputational damage to respond
to regulatory obligations, other costs associated with corrective measures, and loss from
damage or interruption to systems. Although Registrant has established procedures to
reduce the risk of cybersecurity incidents, there is no guarantee that these efforts will
always be successful, especially considering that Registrant does not directly control the
cybersecurity measures and policies employed by third-party service providers. Clients
could incur similar adverse consequences resulting from cybersecurity incidents that
more directly affect issuers of securities in which those clients invest, broker-dealers,
qualified custodians, governmental and other regulatory authorities, exchange and other
financial market operators, or other financial institutions.
Disclosure Statement. A copy of the Registrant’s written Brochure and Client
Relationship Summary, as set forth on Part 2A of Form ADV and Form CRS
respectively, shall be provided to each client prior to, or contemporaneously with, the
execution of the Investment Advisory Agreement or Financial Planning Agreement.
C. The Registrant shall provide investment advisory services specific to the needs of each
client. Prior to providing investment advisory services, an investment adviser
representative will ascertain each client’s investment objective(s). Thereafter, the
Registrant shall allocate and/or recommend that the client allocate investment assets
consistent with the designated investment objective(s). The client may, at any time,
impose reasonable restrictions, in writing, on the Registrant’s services.
D. The Registrant does not participate in a wrap fee program.
E. As of December 31, 2023, the Registrant had $1,441,587,559 in assets under
management on a discretionary basis and $263,133,947 in assets under management on a
non-discretionary basis.