A. Firm Description
Carolina Wealth Management, Inc. (“CWM” or the “Firm”) was founded in 2004 and is currently
registered with the Securities and Exchange Commission (“SEC”). The Firm is co-owned by
Derek S. Pszenny, David R. Damm and David W. Silver.
CWM provides personalized confidential investment management to individuals, pension and
profit-sharing plans, trusts, estates, charitable organizations and small businesses. Advice is
provided through consultation with the Client and may include: determination of financial
objectives, identification of financial problems, cash flow management, tax planning, insurance
review, investment management, education funding, retirement planning, and estate planning.
CWM is an investment management firm. The firm does not sell annuities, insurance, or other
commissioned products. The firm is not affiliated with entities that sell financial products or
securities, however certain persons of the firm are insurance licensed and can offer insurance to
CWM Clients CWM does not accept commissions in any form.. No finder’s fees are accepted.
Investment advice is provided, with the Client making the final decision on investment selection.
CWM does not act as a custodian of Client assets. The Client always maintains asset control. While
a majority of clients managed by CWM are on a non-discretionary basis, CWM does provide asset
management services on a discretionary basis..
B. Types of Advisory Services
CWM provides investment supervisory services, also known as asset management services,
manages investment advisory accounts not involving investment supervisory services, and
furnishes investment advice through consultations and issues periodicals about securities.
Investment Management Services
CWM provides discretionary and non-discretionary portfolio management services to its clients,
based on the specific needs and objectives of such persons and the suitability of products and
services. When CWM is granted full discretion and authority to manage the client’s account,
CWM is authorized to perform various functions without further approval from the client, such
as the determination of securities to be purchased or to be sold without permission from the
client prior to each transaction. CWM offers non-discretionary portfolio management services.
For Clients that enter into non-discretionary arrangements with our firm, we must obtain Client
approval prior to executing any transactions on behalf of the Client account. Clients have an
unrestricted right to decline to implement any advice provided by CWM on a non-discretionary
basis.
Prior to engaging CWM to provide any of the aforementioned investment advisory services, CWM
requires a written investment management agreement (“IMA”) signed by the client prior to the
engagement of services. The IMA outlines the services and fees the clients will incur pursuant to
the IMA with CWM.
Upon request, CWM will create an Investment Policy Statement for each client, which outlines
the client’s current situation (goals, objectives, and risk tolerance levels) and then constructs a plan
to aid in the selection of a portfolio that matches each client’s specific situation. Investment
Advisory Services include, but are not limited to, the following:
• Investment Strategy
• Asset Allocation
• Regular Portfolio Monitoring
• Personal Investment Policy
• Security Selection
As noted, CWM’s asset management services are designed to offer portfolio construction and
ongoing management of accounts with defined investment strategies to help meet the client’s
personal investment goals and objectives. CWM evaluates the current investments of each client
with respect to risk tolerance levels and time horizon. Risk tolerance levels may be documented in
the Investment Policy Statement which is provided to our clients upon
request. CWM is
responsible for providing ongoing re-balancing and continuous monitoring of our clients’
securities holdings.
CWM generally limits its money management to open and closed end mutual funds, equities,
bonds, fixed income and debt securities, ETFs, and REITs. CWM may use other securities as well
to help diversify a portfolio when applicable, and has the ability to service annuities, 529 plans,
and other non-custodial accounts.
Separately Managed Accounts
CWM utilizes the separately managed account (“SMA”) services of third-party investment
advisory firms to aid in the implementation of an investment portfolio designed by CWM. Before
selecting an SMA provider, CWM will ensure the chosen party is properly licensed or registered.
Financial Planning Services
CWM may provide additional advisory services in the form of financial planning services. These
services are provided on a non-discretionary basis. Financial planning services do not involve the
active management of client accounts, but instead focus on a client’s overall financial situation. If
clients wish to execute their financial plan through our CWM, they may separately engage the
Firm for asset management services, which are provided on a discretionary or non-discretionary
basis. Financial planning can be described as helping individuals to determine and set their long-
term financial goals through investments, tax planning, asset allocation, risk management,
retirement planning, and other areas. The role of the financial planner is to find ways to help the
client understand his/her overall financial situation and help the client set financial objectives.
An inherent conflict exists between the interests of CWM and the interests of the client. The client
is under no obligation to act upon CWM’s recommendation. Should the client elect to act on any
recommendation made by CWM, the client is under no obligation to affect the transaction through
the Firm.
C. Tailored Relationships
CWM offers the same suite of services to all its clients. The management services and
recommendations offered by CWM are based on the individual needs of our clients and the
suitability of products and services. Each client’s current situation (income, objectives, and risk
tolerance levels) will be used to construct a client specific plan to aid in the selection of a portfolio
that matches restrictions, needs and targets. For CWM Institutional Clients, financial plans and
their implementation are dependent upon the client’s Investment Policy Statement.
Clients may impose restrictions on investing in certain securities or types of securities in
accordance with their values and beliefs. CWM will make every effort to comply with the wishes
of the client but cannot guarantee absolute adherence due to its use of indexed products, funds,
and ETF’s that are controlled by third party managers.
On more than an occasional basis, CWM furnishes advice to Clients on matters not involving
securities, such as financial planning matters, taxation issues, and trust services that often include
estate planning.
D. Wrap Fee Programs
CWM does not participate in and is not a sponsor of wrap fee programs.
Wrap Fee Programs are arrangements between broker-dealers, investment advisers, banks and
other financial institutions and affiliated and unaffiliated investment advisers through which the
clients of such firms receive discretionary investment advisory, execution, clearing and custodial
services in a “bundled” form. In exchange for these “bundled” services, the clients pay an all-
inclusive (or “wrap”) fee determined as a percentage of the assets held in the wrap account. Due
to the nature of its advisory services.
E. Assets Under Management
As of December 31, 2023, CWM managed $621,103,171 on a non-discretionary basis and
$2,178,941 on a discretionary basis.