A. Investment Partners Asset Management, Inc. (the “Registrant”) is a corporation formed on May 23, 1995
in the state of Delaware. The Registrant became registered as an investment adviser firm in April 2003.
The Registrant is owned by Investment Partners Group, Inc. and Gregg Abella is the Registrant’s Chief
Executive Officer.
B.
INVESTMENT ADVISORY SERVICES
The Registrant provides discretionary or non-discretionary investment advisory services on a fee 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 (between negotiable and 1.75%). The Registrant
offers two investment advisory account options that reflect the distribution of assets and asset classes
within a portfolio.
The Registrant does currently permit clients (or their authorized agents) to make unsolicited purchases
and sales in advised accounts -- i.e. trades that are not recommended by the Registrant or its investment
adviser representatives, but rather are recommended by the client itself (or its authorized agent) -- on
client’s own behalf for their own account and risk. The Registrant also permits clients to bring assets
into their accounts from other locations and, if instructed to do so either verbally or in writing by the
client (or its authorized agent), the Registrant may continue to hold such securities in a client’s account,
even if under other circumstances the Registrant might recommend that such assets, in whole or in part,
be liquidated. In such instances, since the Registrant charges an investment advisory fee generally on
the entire account balance at the end of a quarter, the fee may potentially include: a) assets which were
purchased by the client (or its authorized agent), b) assets sold by the client (or its authorized agent), (if,
for example the asset is a short position), or c) assets which were brought into the account by the client
which the client (or its authorized agent) wishes to continue to hold.
The Registrant may (or may not), from time to time, make recommendations to the client (or its
authorized agent) regarding assets purchased or sold on an unsolicited basis or assets brought into the
account from another location - particularly if such assets represent, what the Registrant believes to be,
a high concentration in the client’s overall account - although the Registrant is under no obligation to
provide such advice and the client (or its authorized agent) is under no obligation to accept such advice.
The Registrant, its affiliates, and its adviser representatives, are under no circumstances liable for the
performance of: a) assets purchased by the client (or its authorized agent) for its own account and risk
on an unsolicited basis, b) assets sold by the client (or its authorized agent) for its own account and risk
on an unsolicited basis, or c) assets brought into the client’s account from another location (if the
Registrant, its affiliates, and adviser representatives are directed either verbally or in writing to continue
to hold such securities.) Similarly, the Registrant, its affiliates and its adviser representatives are not
liable: a) if the client (or its authorized agent) sells on an unsolicited basis an asset which was originally
recommended by or purchased by the Registrant if that asset appreciates in value subsequent to the
unsolicited order to sell it (or conversely, in the event of a shorted security), or b) if the client (or its
authorized agent) purchases on an unsolicited basis an asset which is not currently recommended by the
Registrant (but may have been recommended to clients in the past and may perhaps be recommended to
clients in the future) and that security subsequently decreases in value (or conversely in the event of a
shorted security).
RETIREMENT PLAN CONSULTING SERVICES
The Registrant also provides retirement plan consulting services, pursuant to which it assists sponsors
of self-directed retirement plans with the selection and/or monitoring of investment alternatives
(generally open-end mutual funds) from which plan participants shall choose in self-directing the
investments for their individual plan retirement accounts. In addition, to the extent requested by the
plan sponsor, the Registrant shall also provide participant education designed to assist participants in
identifying the appropriate investment strategy for their retirement plan accounts. The terms and
conditions of the engagement shall be set forth in a Retirement Plan Consulting Agreement between the
Registrant and the plan sponsor.
MISCELLANEOUS
Limited Consulting/Implementation Services. Although the Registrant does not hold itself out as
providing financial planning, estate planning or accounting services, to the extent specifically requested
by the client, the Registrant may provide limited consultation services to its investment management
clients on investment and non-investment related matters, such as estate planning, tax planning,
insurance, etc. and may use software to assist in analysis of such matters. Except as indicated
subsequently in this brochure, the Registrant generally shall not receive any separate or additional fee
for any such consultation services.
Neither the Registrant, nor any of its representatives, serves as an attorney or accountant, and no portion
of the Registrant’s services should be construed as same. To the extent requested by a client, the
Registrant may recommend the services of other professionals for certain non-investment
implementation purposes (i.e. attorneys, accountants, insurance, etc.). The client is under no obligation
to engage the services of any such recommended professional. The client retains absolute discretion
over all implementation decisions and is free to accept or reject any recommendation from the
Registrant.
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 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.
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.
Other Services. From time to time, the Principals of the Registrant may perform consulting services,
valuation studies, expert witness testimony, credit or equity committee participation, or other services
on their own behalf, through Registrant or through an affiliate of Registrant. Furthermore, clients of
such services may be current, past, or future clients of Registrant, outside entities (including but not
limited to companies, funds, trusts, limited partnerships, etc.) that are, were, or may be investments in
client portfolios, or entities that manage investments (companies, funds, trusts, limited partnerships, etc.)
that are, were, or may be investments in client portfolios.
The Registrant’s Principals and/or employees may from time to time sit on the boards of directors or
boards of trustees of outside entities, including clients of the Registrant or entities in which clients of
the Registrant may have an investment, and receive compensation for doing so. The Chief Compliance
Officer, in conjunction with the portfolio manager or supervisor, determines if any such activity could
present a conflict between an advisory client’s interests and the interests of the Registrant, its personnel,
or affiliates requiring disclosure to the client and potential re-assignment of the account to another
manager.
Because the Registrant (either directly or indirectly via its officers and/or affiliated entities) may derive
an economic benefit from the foregoing services and activities, the Registrant has a conflict of interest
when considering investing in any such entities for its clients. In light of the conflict of interest, a client
may direct the Registrant, in writing, not to invest in any such entities for their accounts.
Non-Discretionary Service Limitations. Clients that determine to engage the Registrant on a non-
discretionary investment advisory basis must be willing to accept that the Registrant cannot effect any
account transactions without obtaining prior consent to any such transaction(s) from the client. Thus, 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 client is unavailable, the Registrant will be
unable to effect the account transaction (as it would for its discretionary clients) without first obtaining
the client’s consent.
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).
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, 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.
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.
Unaffiliated 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).
Risk Factors. 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.
Fund 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.
Interval Funds. When consistent with a client’s investment objectives, the Registrant may allocate
client assets on a discretionary or non-discretionary basis to interval funds. Investment companies
structured as interval funds are generally designed for long-term investors who do not require daily
liquidity. Shares of interval funds typically do not trade on the secondary market. Instead, their shares
are subject to periodic redemption offers by the fund at a price based on net asset value. Accordingly,
interval funds are subject to liquidity constraints. Interval funds investing in securities of companies
with smaller market capitalizations, derivatives, or securities with substantial market and/or credit risk
tend to have the greatest exposure to liquidity risk. Generally, interval funds recommended by IPAM
offer liquidity on a quarterly basis, during which the client may seek the redemption of previously
purchased interval funds. While interval funds usually honor the entire amount requested during a
timely quarterly redemption, there are instances where funds may take multiple redemption periods to
fully liquidate a client’s investment. Given the lack of secondary market, the infrequent nature of the
offers to buy back shares, and the liquidity gates (or re-purchase limits), the investor should consider
the shares of interval funds to be illiquid. If you wish to restrict the Registrant’s ability to invest in
interval funds for your accounts, please do so in writing.
Independent Managers. Registrant may allocate (and/or 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) shall have day-to-day responsibility for the active discretionary management
of the allocated assets. 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 which 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.
The investment management fee charged by the Independent Manager(s) is separate from, and in
addition to, Registrant’s advisory fee as set forth in the fee schedule in Item 5 below and which will be
disclosed to the client before entering into the Independent Manager engagement and/or subject to the
terms and conditions of a separate agreement between the client and the Independent Manager(s).
Sub-Advisory Arrangements. The Registrant may engage other unaffiliated investment advisers as
sub-advisors to manage certain portions of a client’s portfolio. Sub-advisors have discretionary authority
for the day-to-day management of the apportioned assets. Clients do not pay a higher advisory fee than
the agreed-upon rate for the account itself as a result of the Registrant’s use of sub-advisors.
When using Sub-Advisors, the Registrant shall maintain both the initial and ongoing day-to-day
relationship with the client. It is envisioned that Registrant and/or the client will continue to determine
the custodian/broker-dealer to be used, not the Sub-Advisor, and in some cases, Charles Schwab & Co.,
Inc. (“Schwab”) would be the custodian. However, in some circumstances, the Sub-Advisor may
determine to use a specific custodian and as a result, underlying clients may pay higher commissions,
other transaction costs, greater spreads, or receive less favorable net prices on transactions for the
account than would otherwise be the case through alternative clearing arrangements. Higher costs
adversely impact account performance.
Structured Notes. The Registrant may purchase structured notes for client accounts. A structured note
is a financial instrument that combines two elements, a debt security and exposure to an underlying asset
or assets. It is essentially a note, carrying counter party risk of the issuer. However, the return on the
note is linked to the return of an underlying asset or assets (such as the S&P 500 Index or commodities).
It is this latter feature that makes structured products unique, as the payout can be used to provide some
degree of principal protection, leveraged returns (but usually with some cap on the maximum return),
and be tailored to a specific market or economic view. In addition, investors may receive long-term
capital gains tax treatment if certain underlying conditions are met and the note is held for more than
one year. Finally, structured notes may also have liquidity constraints, such that the sale thereof before
maturity may be limited.
Socially Responsible Investing Limitations. Socially Responsible Investing involves the incorporation
of Environmental, Social and Governance considerations into the investment due diligence process
(“ESG). There are potential limitations associated with allocating a portion of an investment portfolio
in ESG securities (i.e., securities that have a mandate to avoid, when possible, investments in such
products as alcohol, tobacco, firearms, oil drilling, gambling, etc.). The number of these securities may
be limited when compared to those that do not maintain such a mandate. ESG securities 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.
Cryptocurrency. For clients who want exposure to cryptocurrencies, including Bitcoin, Registrant, will
advise the client to consider a potential investment in corresponding exchange traded securities 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 through the use of 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. Because
cryptocurrency is currently considered to be a speculative investment, Registrant will not exercise
discretionary authority to purchase a cryptocurrency investment for client accounts. Rather, a client must
expressly authorize the purchase of the cryptocurrency investment. Registrant does not recommend or
advocate the purchase of, or investment in, cryptocurrencies. Registrant considers such an investment
to be speculative. Clients who authorize the purchase of a cryptocurrency investment must be prepared
for the potential for liquidity constraints, extreme price volatility and complete loss of principal.
Excluded Account Reporting. Registrant, in conjunction with the services provided by third-party
service providers may also make available periodic comprehensive reporting services which can
incorporate all or most of the client’s investment assets, including those investment assets that are not
part of the assets managed by Registrant (the “Excluded Assets”).
The client and/or their other advisors that maintain trading authority, and not Registrant, shall be
exclusively responsible for the investment performance of the Excluded Assets. Unless otherwise
specifically agreed to, in writing, Registrant’s service relative to the Excluded Assets is limited to
reporting only. The sole exception to the above shall be if Registrant is specifically engaged to monitor
and/or allocate the assets within the client’s 401(k) account maintained away at the custodian directed
by the client’s employer. As such, except with respect to the client’s 401(k) account (if applicable),
Registrant does not maintain any trading authority for the Excluded Assets. Rather, the client and/or
the client’s designated other investment professional(s) maintain supervision, monitoring and trading
authority for the Excluded Assets.
If 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. In the event the client desires
that Registrant provide investment management services for the Excluded Assets, the client may engage
Registrant to do so pursuant to the terms and conditions of the Investment Advisory Agreement between
Registrant and the client.
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.
Disclosure Statement and Customer Relationship Summary. A copy of the Registrant’s written
Brochure as set forth on Part 2A of Form ADV and its Customer Relationship Summary shall be
provided to each client prior to, or contemporaneously with, the execution of the Investment Advisory
Agreement.
B. 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.
C. The Registrant does not participate in a wrap fee program.
D. As of December 31, 2022, the reporting date of its annual ADV filing, the Registrant had $174,505,651in
assets under management with $170,202,682 in assets on a discretionary basis and $4,302,969 on a non-
discretionary basis. The Registrant also had an additional $4,636,777 in assets under advisement, in
connection with its retirement plan consulting services. For further informational purposes, as of
February 28, 2023, the Registrant had approximately $185,421,518 in assets under management.