Arlen Capital, LLC (hereinafter referred to as "Arlen Capital") is an investment advisory firm offering
Investment Management and Wealth Planning Services customized to your individual needs. The
services are more fully described below.
Arlen Capital has been in business since April of 2001. Arlen Capital is a one member LLC wholly
owned by Arlen Corporation. Arlen Corporation is owned by Peter A. Sullivan.
Arlen Capital offers the following advisory services. As previously stated, each of the services is more
fully described below.
• Investment Management
• Analysis, Recommendation and Monitoring of Third Party Managed Programs
• Wealth Planning
Arlen Capital tailors the advisory services it offers to your individual needs. You can impose restrictions
and/or limitations on the investing in certain securities or types of securities.
Our investment advisory services begin with an initial interview and data gathering to determine your
individual needs, goals, time horizons and risk tolerance. Additionally, you will be asked to complete a
Client Suitability Form (New Account Form). The information gathered by Arlen Capital will assist Arlen
Capital to provide you with the requested services and customize the services to your financial
situation. Depending on the services you have requested, Arlen Capital will gather various financial
information and history from you including, but not limited to:
• Retirement and financial goals
• Investment objectives
• Investment horizon
• Financial needs
• Cash flow analysis
• Cost of living needs
• Education needs
• Savings tendencies
• Other applicable financial information required by Arlen Capital in order to provide the
investment advisory services requested.
As of December 31, 2022, Arlen Capital has $277,801,417 of discretionary assets under management
and $7,108,093 in client assets on a non-discretionary basis.
Investment Management Services
Vision 2020 Wealth Management Platform - Advisor Managed Portfolios Program
The Wealth Management Platform - Advisor Managed Portfolios Program ("Advisor Managed
Portfolios") provides comprehensive investment management of your assets through the application of
asset allocation planning software. Advisor Managed Portfolios provides risk tolerance assessment,
efficient frontier plotting, fund profiling and performance data, and portfolio optimization and re-
balancing tools. Utilizing these tools, and based on your responses to a risk tolerance questionnaire
("Questionnaire") and discussions that we have together regarding, among other things, investment
objective, risk tolerance, investment time horizon, account restrictions, and overall financial situation,
we construct a portfolio of investments suitable for the investor.
Arlen Capital primarily uses mutual funds and exchange traded funds (ETFs). However, advice is not
limited to mutual funds and ETFs.
Arlen Capital has designed six model portfolios. The model portfolios are designed around a risk
tolerance centered on volatility sensitivity.
1. Low Volatility Allocation - Investment style is comprised of domestic fixed income, international
fixed income, domestic balanced, alternatives and domestic equity funds.
2. Mildly Assertive Allocation - Investment style is comprised of domestic fixed income,
international fixed income, domestic balanced, alternatives and domestic equity funds.
3. Moderately Assertive Allocation - Investment style is comprised of domestic fixed income,
international fixed income, domestic balanced, alternatives and domestic equity funds.
4. Assertive Allocation Investment style is comprised of domestic fixed income, international fixed
income, domestic balanced, domestic equity funds, alternatives and international equity funds.
5. Distribution Methodology - Investment style is comprised of domestic fixed income, international
fixed income, domestic balanced, alternatives and domestic equity funds.
6. Lowest Volatility Allocation - Investment style is comprised of domestic fixed income,
international fixed income, domestic balanced, domestic equity funds, alternatives and
international equity funds.
After evaluating your information, Arlen Capital will determine which of its model portfolios would be
most suitable for you. From there, Arlen Capital customizes your portfolio allocation taking into
consideration your limitations or restrictions, the market and economy at the time and your financial
situation, goals and objectives and creates a portfolio allocation customized to you.
Arlen Capital will schedule a meeting with you and present the recommended portfolio allocation. Upon
your approval, Arlen Capital will implement the portfolio allocation. Arlen Capital will provide continuous
and ongoing management of your account. Unless otherwise expressly requested by you, Arlen
Capital will manage the account on a discretionary basis and will make changes to the allocation as
deemed appropriate by Arlen Capital. Arlen Capital will determine the securities to be purchased and
sold in the account and will alter the securities holdings from time to time, without prior consultation
with you. Arlen Capital may actively trade securities and hold such holdings for periods of 30 days or
less or maintain positions for longer or shorter term periods.
If you elect to have your accounts managed on a nondiscretionary basis, no changes will be made to
the allocation of your account without prior consultation with you and your expressed agreement.
However, Arlen Capital will periodically rebalance your account to maintain the initially agreed upon
asset allocation. Arlen Capital does not deem rebalancing as a form of discretion.
Transactions in the account, account reallocations and rebalancing may trigger a taxable event, with
the exception of IRA accounts, 403(b) accounts and other qualified retirement accounts.
Fluctuations in the price of investments are a normal characteristic of securities markets due to a
variety of influences. Managed account programs should be considered a long-term investment and
thus long-term performance and performance consistency are the major goals.
Third Party Manager Programs
If Arlen Capital believes you can benefit from the asset management services of a third party manager,
Arlen Capital will refer you to third-party investment management programs with which Arlen Capital
has established a relationship. Arlen Capital is not affiliated with any third party manager. Third party
manager programs are used as another way to diversify your portfolio.
Arlen Capital will remain your primary investment manager,
as outlined in the client agreement
between you and Arlen Capital. As such, Arlen Capital will monitor the performance of the third-party
management firm.
Arlen Capital has made arrangements with Private Capital Management, Inc. ("PCM) to offer an
alternative to asset management through a third party managed program. You will enter into an
agreement with PCM for asset management services. You should read the third party manager's
disclosure brochure for additional disclosure of its managed program. Arlen Capital is a subadvisor to
you and provides advice about your account, suitability of the management services, and periodically,
not less than annually, will conduct reviews with you to determine the ongoing suitability of the
program.
Arlen Capital does not take custody of your assets with the exception of deducting its advisory fees
from your account. Arlen Capital will not directly conduct securities transactions on your behalf or
participate directly in the selection of the securities to be purchased or sold for your account under
management with the third party manager. Investment decisions are made by the third party manager
in accordance with the agreement between you and the manager.
General Information
You are advised the investment recommendations and advice offered by Arlen Capital are not legal
advice or accounting advice. You should coordinate and discuss the impact of financial advice with
your attorney and/or accountant. You are advised that it is necessary to inform Arlen Capital promptly
with respect to any changes in your financial situation and investment goals and objectives. Failure to
notify Arlen Capital of any such changes could result in investment recommendations not meeting your
needs.
IRA Rollover Considerations
As part of our consulting and advisory services, we provide you recommendations and advice
concerning your employer retirement plan or other qualified retirement account. Our recommendations
may include you consider withdrawing the assets from your employer's retirement plan or other
qualified retirement account and roll the assets over to an individual retirement account ("IRA").
Further, we offer our management services be applied to those funds and securities rolled into an IRA
or other account for which we will receive compensation. If you elect to roll the assets to an IRA that is
subject to our management, we will charge you an asset based fee as described above under Item 5.
This practice presents a conflict of interest because persons providing investment advice on your
behalf have an incentive to recommend a rollover to you for the purpose of generating fee based
compensation rather than solely based on your needs. You are under no obligation, contractually or
otherwise, to complete the rollover. Furthermore, if you do complete the rollover, you are under no
obligation to have the assets in an IRA managed by us.
It is important for you to understand many employers permit former employees to keep their retirement
assets in their company plan. Also, current employees can sometimes move assets out of their
company plan before they retire or change jobs. In determining whether to complete the rollover to an
IRA, and to the extent the following options are available, you should consider the costs and benefits of
each.
An employee will typically have four options:
1. Leave the funds in your employer's (former employer's) plan.
2. Move the funds to a new employer's retirement plan.
3. Cash out and taking a taxable distribution from the plan.
4. Roll the funds into an IRA rollover account.
Each of these options has advantages and disadvantages and before making a change we encourage
you to speak with your CPA and/or tax attorney.
If you are considering rolling over your retirement funds to an IRA for us to manage it is important you
understand the following:
1. Determine whether the investment options in your employer's retirement plan address your needs or
whether you might want to consider other types of investments.
a. Employer retirement plans generally have a more limited investment menu than IRAs.
b. Employer retirement plans may have unique investment options not available to the public such
as employer securities, or previously closed funds.
2. Your current plan may have lower fees than our fees.
a. If you are interested in investing only in mutual funds, you should understand the cost structure
of the share classes available in your employer's retirement plan and how the costs of those share
classes compare with those available in an IRA.
b. You should understand the various products and services you might take advantage of at an
IRA provider and the potential costs of those products and services.
c. It is likely you will not be charged a management fee and will not receive ongoing asset
management services unless you elect to have such services. In the event your plan offers asset
management or model management, there may be a fee associated with the services that is more
or less than our asset management fee.
3. Our strategy may have higher risk than the option(s) provided to you in your plan.
4. Your current plan may offer financial advice, guidance, and/or model management or portfolio
options at no additional cost.
5. If you keep your assets titled in a 401k or retirement account, you could potentially delay your
required minimum distribution beyond age 72.
6. Your 401k may offer more liability protection than a rollover IRA; each state may vary.
a. Generally, federal law protects assets in qualified plans from creditors. Since 2005, IRA assets have
been generally protected from creditors in bankruptcies. However, there can be some exceptions to
the general rules so you should consult an attorney if you are concerned about protecting your
retirement plan assets from creditors.
7. You may be able to take out a loan on your 401k, but not from an IRA.
8. IRA assets can be accessed any time; however, distributions are subject to ordinary income tax and
may also be subject to a 10% early distribution penalty unless they qualify for an exception such as
disability, higher education expenses or the purchase of a home.
9. If you own company stock in your plan, you may be able to liquidate those shares at a lower capital
gains tax rate.
10. Your plan may allow you to hire us as the manager and keep the assets titled in the plan name.
It is important that you understand the differences between these types of accounts and to decide
whether a rollover is best for you. Prior to proceeding, if you have questions contact your investment
adviser representative, or call our main number as listed on the cover page of this brochure.