Firm Description
CYPRESS ASSET MANAGEMENT, INC., (“Cypress”, “The Firm” or “CAM”)
was founded in 1996.
CYPRESS ASSET MANAGEMENT, INC. is an independently owned investment
advisory firm based in Houston, TX. Cypress clients include individuals, trusts, estates,
small businesses, charitable organizations, pension and profit-sharing plans. The firm does
not sell annuities, insurance, stocks, bonds, mutual funds, limited partnerships or other
commissioned products. The firm is not owned or affiliated by ownership with other
entities that sell financial products or services.
CYPRESS ASSET MANAGEMENT, INC. does not act as a custodian of client
assets. The assets of all Cypress clients are housed at a custodian of the client’s
choice. The client always maintains control of assets. All Cypress clients receive a
monthly or quarterly (as required) client statement from the custodian and a quarterly
statement from Cypress. The quarterly statements issued by Cypress, however, do not
replace or supersede any statements issued by the client’s custodian(s).
CYPRESS ASSET MANAGEMENT, INC. offers clients a choice of several investment
strategies: a Growth and Income equity strategy, a Core Growth equity strategy, an
Energy and Natural Resources equity strategy, an Enhanced Yield Dividend strategy and
a Fixed Income strategy. All client accounts are separately managed, there are no pooled
accounts. Our research is primarily conducted internally. Un-invested reserve funds are
normally maintained in a money market domiciled at the custodian. Specific securities
utilized may include:
Equity securities: include exchange-listed securities, securities traded over the counter,
foreign issues traded on U.S. exchanges, and master limited partnerships (MLPS).
-Debt securities: include United States Government and agency securities, corporate debt
securities, commercial paper, certificates of deposit, and municipal securities.
-Preferred securities, Convertible Preferred securities, and Convertible debt and equity
securities.
-Exchange Traded Securities (ETF’s).
-Investment company securities such as mutual funds and closed end funds.
Clients make the final decision on investment strategy. We meet with and speak to
clients regularly and portfolios are tailored to the needs of individual clients. We generally
attempt to accommodate the investment restrictions imposed by clients (for example: an
aversion to tobacco, defense companies or casino companies).
As noted, the assets of all Cypress clients are housed at a custodian of the clients’ choice.
Brokerage services are generally provided by the custodian. When the custodian does not
provide brokerage services, Cypress may utilize the brokerage services of a third-party
broker to execute purchases and sales of securities.
In some circumstances, Cypress acts as a third-party advisor, providing investment
management service to separate accounts of the clients of other investment advisors. In
these circumstances, Cypress shares in a negotiated, previously determined, part of the
management fee charged to the client by the custodian.
Cypress does not publish research reports or sell newsletters. We do not normally use the
term “financial planning” but we do work with our clients’ accountants and attorneys when
appropriate to discuss estate planning and tax efficiency. We conduct no other business.
As of December 31, 2023, CYPRESS ASSET MANAGEMENT, INC. manages
approximately $348,077,908 in assets for approximately 123 clients of
which
$342,817,391 are managed on a discretionary basis and $5,260,517 on a non-discretionary
basis.
Principal Owners
William L. Garwood, Jr. is a 50% stockholder. Frank P. Lee is a 50% stockholder.
Item – 5 - Fees and Compensation
Description
Our compensation for our individually managed accounts is based on the amount of
assets under management. Most of our advisory fees are billed and payable quarterly in
arrears (we are paid for the work done in the last 90 days) based upon the market value of
the assets in the account at the end of the quarter. If the account utilizes margin, which
is usually at the client’s request, then the fee payable to CAM will be based on the market
value of investments in the account. The internal records we use for billing may contain
a different market value than the statement received from the respective custodian, but we
believe these differences, if any, are immaterial. However, some of our advisory fees
(clients related to one custodian) are billed and payable in advance based on the market
value of assets under management at the end of the previous quarter. When a client related
to that one custodian (that pays in advance) terminates a relationship with Cypress, fees
collected in advance are promptly reimbursed by the custodian to the client. Fees
reimbursed by the custodian and due back to the custodian from Cypress are settled in the
following billing cycle. Payment in full is expected upon invoice presentation.
We may either bill clients for fees incurred or deduct fees from clients’ assets, according
to the desires of the client. Clients may select either method of payment. The client
must consent in advance to direct debiting of their investment account.
The annual equity fee schedule is listed below:
1.25% on the first $2 million
.70% on the next $3 million (from 2,000,001 to 5,000,000)
.5% on the next $5 million (from 5,000,001 to 10,000,000)
.40% on assets above $10,000,000
The annual fee for the management of fixed income is listed below:
.40% on the first $2 million
.25% on all assets over $2 million
In addition, if equities under management exceed $2 million, the annual fee on all fixed
income securities is .25%.
There is no minimum fee and all fees are negotiable. Cypress, in its sole discretion, may
charge a lesser investment advisory fee.
Cypress clients’ assets are always housed with a third- p a r t y custodian, whom the
client selects. Clients should anticipate that they will pay the custodian a fee for their
services. Cypress does not have input into the fees charged by a custodian.
Some of the investments that Cypress chooses (for example Exchange Traded Funds,
Closed End Funds, Mutual Funds) have a fee that is in addition to the fee charged by
Cypress. Cypress does not have any say over the fees charged by Exchange Traded Funds,
Closed End Funds or Mutual Funds.
Cypress clients will pay a separate brokerage fee generated by purchases and sales of securities on
their behalf by a brokerage firm. The brokerage commissions a client pays will vary, depending on
the brokerage firm and/or custodian they choose or is chosen by CAM. Please refer to Item 12 for
more information on Brokerage Practices.
Cypress reserves the right to stop work on any account that is more than 60 days past due. Cypress
reserves the right to bill terminated accounts a fee equal to 90 days of fees of assets under
management as of the date of termination. The fee covers work performed by Cypress on behalf of
the former client after the date of termination.