A. TCI Wealth Advisors, Inc. (the “Registrant”) is a corporation formed on August 6, 1990 in
the state of Arizona. The Registrant became registered as an Investment Adviser Firm in
August 1990. The Registrant is owned by several individuals and trusts as reported on the
Registrant’s ADV Part 1, Schedules A and B. However, the Registrant is not “principally
owned” (as that term is defined for the purposes of this ADV Part 2A, Item 4.A) by any
such individual(s) or trust(s). Sam Swift is the Registrant’s Chief Executive Officer and
President.
B.
INVESTMENT MANAGEMENT AND PLANNING
The Registrant provides discretionary and 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.
Registrant’s annual investment advisory fee shall include investment advisory services,
and, to the extent specifically requested by the client, financial planning and consulting
services. In the event that the client requires extraordinary planning and/or consultation
services (to be determined in the sole discretion of the Registrant), the Registrant may
determine to charge for such additional services, the dollar amount of which shall be set
forth in a separate written notice to the client.
Our Process
The investment plan process begins with a discussion of financial values and goals, as well
as the client’s key relationships, existing assets, other professional advisors, preferred
process and important interests. Taking into account the long-term nature of successful
investing, Registrant then sets objectives for the client’s portfolio that are appropriate for
willingness, ability and need to take risk, and the investment horizon(s) identified. Because
it is so important, asset allocation is the first investment decision. During this process,
Registrant decides how much of a portfolio to invest in each of the different investment
types, or asset classes, including stocks, bonds and short-term investments, both domestic
and foreign. With an asset allocation in place, Registrant selects the investment vehicles to
use to implement the portfolio strategy. Two key investing principles guide these decisions:
the importance of diversification and the value of remaining invested.
Building on the aforementioned, Registrant constructs a portfolio suited to Clients’ needs,
goals, time horizon and risk attitude. The building blocks for the portfolio are institutional
asset class funds, an excellent way to implement a diversified portfolio investment so as to
maximize the probability of achieving goals.
It is important to note that Registrant believes in the long-term building of wealth. While
no strategy guarantees a certain rate of return, a disciplined asset allocation approach can
produce a higher probability of success, if given over five or more years to implement it.
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 such 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.
It shall remain 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.
RETIREMENT PLAN CONSULTING
The Registrant also provides retirement plan consulting services. 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. The terms and
conditions of the engagement shall generally be set forth in a Retirement Plan Consulting
Agreement between the Registrant and the plan sponsor.
ERISA PLAN and 401(k) INDIVIDUAL ENGAGEMENTS:
Trustee Directed Plans. Registrant may be engaged to provide discretionary investment
advisory services to ERISA retirement plans, whereby the Firm shall manage Plan assets
consistent with the investment objective designated by the Plan trustees. In such
engagements, Registrant will serve as an investment fiduciary as that term is defined under
The Employee Retirement Income Security Act of 1974 (“ERISA”). Registrant will
generally provide services on an “assets under management” fee basis per the terms and
conditions of an Investment Advisory Agreement between the Plan and the Firm.
Participant Directed Retirement Plans. Registrant may also provide investment advisory
and consulting services to participant directed retirement plans per the terms and conditions
of a Retirement Plan Services Agreement between Registrant and the plan. For such
engagements, Registrant shall assist the Plan sponsor with the selection of an investment
platform from which Plan participants shall make their respective investment choices
(which may include investment strategies devised and managed by Registrant), and, to the
extent engaged to do so, may also provide corresponding education to assist the participants
with their decision making process.
Client Retirement Plan Assets. If requested to do so, Registrant shall provide investment
advisory services relative to 401(k) plan assets maintained by the client in conjunction with
the retirement plan established by the client’s employer. In such event, Registrant shall
allocate (or recommend that the client allocate) the retirement account assets among the
investment options available on the 401(k) platform. Registrant’s ability shall be limited to
the allocation of the assets among the investment alternatives available through the plan.
Registrant will not receive any communications from the plan sponsor or custodian, and it
shall remain the client’s exclusive obligation to notify Registrant of any changes in
investment alternatives, restrictions, etc. pertaining to the retirement account. Unless
expressly indicated by the Registrant to the contrary, in writing, the client’s 401(k) plan
assets shall be included as assets under management for purposes of Registrant calculating
its advisory fee.
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.
Registrant’s Chief Compliance Officer, Simone Gehner , remains available to address any
questions that a client or prospective client may have regarding the potential for conflict of
interest presented by such rollover recommendation.
MISCELLANEOUS
Limitations of Financial Planning, Non-Investment Consulting and Implementation.
As indicated above, to the extent requested by a client, Registrant may provide financial
planning and related consulting services regarding non-investment related matters such as
tax and estate planning, insurance, etc. Registrant will generally provide such consulting
services inclusive of its advisory fee set forth at Item 5 below (exceptions could occur
based upon assets under management, special projects, stand-alone planning engagements,
etc. for which Firm may charge a separate or additional fee). Please Note. Registrant
believes that it is important for the client to address financial planning issues on an ongoing
basis. Registrant’s advisory fee, as set forth at Item 5 below, will remain the same
regardless of whether or not the client determines to address financial planning issues with
Registrant. Please Also Note: Registrant does not serve as an attorney, accountant, or
insurance agent, and no portion of our services should be construed as same. Accordingly,
Registrant does not prepare legal documents, prepare tax returns, or sell insurance
products. To the extent requested by a client, we may recommend the services of other
professionals for non-investment implementation purpose (i.e. attorneys, accountants,
insurance, etc.). The client retains absolute discretion over all such implementation
decisions and is free to accept or reject any recommendation from Registrant and/or its
representatives. 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.
Clients are reminded that they are under no obligation to engage the services of any such
recommended professional.
If the client engages any 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.
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.
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 such
transaction(s) from the client. Therefore, in the event that Registrant would like to make a
transaction for a client’s account (including in the event of an individual holding or general
market correction), and the client is unavailable, the Registrant will be unable to effect the
account transaction(s) (as it would for its discretionary clients) without first obtaining the
client’s consent.
Independent Managers. The Registrant may allocate a portion of the client’s investment
assets among unaffiliated independent
investment managers in accordance with the client’s
designated investment objective(s). In such situations, the Independent Manager[s] shall
have day-to-day responsibility for the active discretionary management of the allocated
assets, including, to the extent applicable, proxy voting responsibility. Registrant shall
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. Factors that Registrant shall consider in recommending Independent
Manager[s] include the client’s designated investment objective(s), management style,
performance, reputation, financial strength, reporting, pricing, and research. Please Note.
The investment management fee charged by the Independent Manager[s] is separate from,
and in addition to, Registrant’s investment advisory fee disclosed at Item 5 below. ANY
QUESTIONS: Registrant’s Chief Compliance Officer, Simone Gehner remains available
to address any questions that a client or prospective client may have regarding the
allocation of account assets to an Independent Manager(s), including the specific additional
fee to be charged by such Independent Manager(s).
Use of Mutual Funds and Exchange Traded Funds.
Registrant utilizes mutual funds and exchange traded funds for its client portfolios. 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).
Please Note-Use of DFA Mutual Funds: Registrant utilizes the mutual funds issued by
Dimensional Fund Advisors (“DFA”). DFA funds are generally only available through
registered investment advisers approved by DFA. Thus, if the client was to terminate
Registrant’s services, and transition to another adviser who has not been approved by DFA
to utilize DFA funds, restrictions regarding additional purchases of, or reallocation among
other DFA funds, will generally apply. The Registrant’s Chief Compliance Officer, Simone
Gehner, remains available to address any questions that a client or prospective client may
have this arrangement.
Socially Responsible Investing Limitations.
Socially Responsible Investing involves the
incorporation of Environmental, Social and Governance considerations into the
investment due diligence process (“ESG). ESG investing incorporates a set of
criteria/factors used in evaluati
ng 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 maintain 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 few 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.
Borrowing Against Assets/Risks. A client who has a need to borrow money could
determine to do so by using:
• Margin-The account custodian or broker-dealer lends money to the client. The
custodian charges the client interest for the right to borrow money, and uses the
assets in the client’s brokerage account as collateral; and
• Pledged Assets Loan- In consideration for a lender (i.e., a bank, etc.) to make a
loan to the client, the client pledges its investment assets held at the account
custodian as collateral.
These above-described collateralized loans are generally utilized because they typically
provide more favorable interest rates than standard commercial loans. These types of
collateralized loans can assist with a pending home purchase, permit the retirement of more
expensive debt, or enable borrowing in lieu of liquidating existing account positions and
incurring capital gains taxes. However, such loans are not without potential material risk
to the client’s investment assets. The lender (i.e. custodian, bank, etc.) will have recourse
against the client’s investment assets in the event of loan default or if the assets fall below
a certain level. For this reason, Registrant does not recommend such borrowing unless it is
for specific short-term purposes (i.e. a bridge loan to purchase a new residence). Registrant
does not recommend such borrowing for investment purposes (i.e. to invest borrowed funds
in the market). Regardless, if the client was to determine to utilize margin or a pledged
assets loan, the following economic benefits would inure to Registrant:
• by taking the loan rather than liquidating assets in the client’s account, Registrant
continues to earn a fee on such Account assets;
• if the client invests any portion of the loan proceeds in an account to be managed
by Registrant, Registrant will receive an advisory fee on the invested amount;
and,
• if Registrant’s advisory fee is based upon the higher margined account value (
see
margin disclosure at Item 5 below), Registrant will earn a correspondingly higher
advisory fee. This could provide Registrant with a disincentive to encourage the
client to discontinue the use of margin.
Please Note: The client must accept the above risks and potential corresponding
consequences associated with the use of margin or a pledged assets loans.
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.
Please Note: 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.
ANY QUESTIONS: Registrant’s Chief Compliance Officer, Simone Gehner, remains
available to address any questions that a client or prospective may have regarding the
above fee billing practice.
Cash Sweep Accounts. Account custodians generally
require that cash proceeds from
account transactions or cash deposits be swept into and/or initially maintained in the
custodian’s sweep account. The yield on the sweep account is generally lower than those
available in money market accounts. To help mitigate this issue, Registrant shall generally
purchase a higher yielding money market fund available on the custodian’s platform with
cash proceeds or deposits, 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, 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. ANY QUESTIONS: Registrant’ Chief Compliance
Officer, Simone Gehner, remains available to address any questions that a client or
prospective client may have regarding the above
ByAllAccounts and eMoney Advisor Platform. In conjunction with the services
provided by ByAllAccounts, Inc. and the eMoney Advisor platform, the Registrant can
also provide account 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”). Unless agreed to otherwise, the client and/or
his/her/its other advisors that maintain trading authority, and not Registrant, shall
be exclusively responsible for the investment performance of the Excluded Assets.
Unless also agreed to otherwise, Registrant does not provide investment management,
monitoring or implementation services for the Excluded Assets. If the Registrant is asked
to make a recommendation as to any Excluded Assets, the client is under absolutely no
obligation to accept the recommendation, and Registrant shall not be responsible for any
implementation error (timing, trading, etc.) relative to the Excluded Assets. The client can
engage Registrant to provide investment management services for the Excluded Assets
pursuant to the terms and conditions of the
Investment Advisory Agreement between
Registrant and the client. The Registrant’s Chief Compliance Officer, Simone Gehner,
remains available to address any questions that a client or prospective client may have this
arrangement.
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 its systems to reduce the risk
of cybersecurity incidents from coming to fruition, 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 Privacy Notice, written
disclosure statement as set forth on Part 2 of Form ADV and Form CRS (Client
Relationship Summary) shall be provided to each client or prospective client prior to, or
contemporaneously with, the execution of the
Investment Advisory Agreement,
Financial
Planning and Consulting Agreement, or
Retirement Plan Consulting 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 $ 4,074,741,298 in assets under management
on a discretionary basis and $ 16,925,434 in assets under management on a non-
discretionary basis.