ACG is an independent fee only Investment Advisor and is registered with the SEC. ACG has no broker-
dealer affiliation and accepts no commissions from registered products.
ACG was incorporated in Minnesota in 1998. Its principal owners are Charles Langowski, Justin Dorsey, and
Patrick Larson.
ACG has four (4) distinct practice lines:
1. Institutional Investment Consulting
2. Institutional Investment Management
3. Financial Wellness
4. Individual Wealth Management
1. Institutional Investment Consulting
In its Institutional Investment Consulting practice, ACG advises clients on the hiring, monitoring, and
replacing of third-party Investment Managers, principally mutual funds and pooled products like separate
accounts and collective investment trusts.
The biggest component (measured in assets-under-management) of this practice is employer sponsored
retirement plans that are regulated by ERISA. In turn, most of those plans are participant directed
retirement plans (401(k), 403(b), and 457) for which ACG also provides (at the option of the Plan
Sponsor) participant investment education and financial wellness. Generally, if a client wants ACG to
provide participant investment education it is because that same client has engaged ACG to coordinate
with the plan’s recordkeeper the construction of customized and automatically rebalanced model
portfolios. In technical terms, the goal of those portfolios is to fall within the safe harbor provisions of DOL
Interpretative Bulletin 96-1 and thereby be treated as “education” rather than “advice.”
In addition to participant-directed retirement plans, ACG also works with employer-sponsored traditional
defined benefit plans; cash balance defined benefit plans, and 409A supplemental executive compensation
plans.
In terms of what kind of investment advice ACG will provide, it offers to serve as either an ERISA Section
3(21) and/or 3(38) fiduciary investment adviser. An example of the foregoing would be whereby ACG acts as
a section 3(21) co-fiduciary for the selection and monitoring of the plan’s “Designated Investment
Alternatives” (DIA’s) (as that term is described in 29 CFR 2550.404a-5). (ACG’s section 3(38)services
are described hereinafter after in Item #16).
Besides providing investment advice, ACG is often asked to help a client benchmark its retirement plan.
Sometimes, the scope of that exercise can be quite limited (e.g., a high-level recordkeeping fee comparison).
Other times when the client is unhappy with service and wants to make a change altogether, the scope can be
extensive.
Another line of business where ACG provides institutional investment consulting is
endowments/foundations. Most endowments/foundations have annualized (or smoothed) distribution
targets but making distributions in a “down” market can have profound and long-lasting negative and
compounded effects particularly if during the same down market donor contributions slow or cease
altogether.
While “alternative asset class” discussions dominate many conversations about endowment/foundation
investments, ACG stresses the importance of judicious cash management and our years of experience
building strategic asset allocation portfolios and selecting and monitoring investment managers (both
passive and active) for the many retirement plans with which we work is directly transferable to
endowments/foundations. Finally, endowments/foundations can tactically reallocate their investments
without the requisite time delays incumbent on retirement plans because of the necessary participants’
notices. That four-part approach (strategic asset allocation, customized cash management, passive/active
manager selection/monitoring, and tactical reallocation) is a general description of our
endowment/foundation investment consulting methodology.
Our final area of institutional investment consulting is with Native American Tribal Councils. Initiatives
and priorities can vary. Several disparate examples might include retirement plans for casino employees,
minor’s trusts, trusts to purchase reservation lands from non-tribal members or cash funds for ongoing
construction projects.
2. Institutional Investment Management
In its Investment Management practice, ACG buys and sells individual securities, almost exclusively fixed-
income products. In that practice, it works with institutional clients such as pension plans, banks, and
insurers. To illustrate, ACG might be hired by a bank to help it manage its capital reserves. In that role, the
bank might ask whether ACG will conduct independent credit analysis on its holdings to alleviate the bank
from relying solely upon credit rating agencies. ACG might also be asked to measure the “efficiency” of
individual holdings in the context of their capital discount weightings. Ongoing, ACG might be asked to
make asset class relative value analysis in the context of prevailing and forecasted interest rates.
Asset Liability Immunization Strategy (ALIS)
Advanced Capital Group’s Asset Liability Immunization Strategy (ALIS) is a method for pension plans to stabilize
their funding ratio and future contributions versus traditional pension plan management.
The approach to de-risking a pension plan is through the creation of a custom glide path where a plan
sponsor determines a set of targeted asset allocation levels as the plan’s funding ratio improves.
Recognizing that all plans are different, the glidepath should begin with an understanding of the long-term
funding goal of the plan. From there, a dynamic glide path based on the funding level and ability to accept
risk and /return can be developed. Current strategies typically rely on some form of a pooled fixed income
index product to construct the immunization strategy. Although an improvement in strategy, it creates the
possibility of a duration mismatch in key duration segments or buckets due to the index construction.
To counter that risk, ACG’s Institutional Investment Management team will construct a custom allocation to
optimize the match between a plan’s liability duration buckets and asset durations. This customization
enhances the effectiveness of a plan’s overall hedge ratio and is designed to immunize the portfolio against
any interest rate shocks due to duration mismatch. All asset management services are included in ACG’s
stated advisory fee.
3. Financial Wellness
Financially stressed employees cost employers thousands of dollars in lost productivity and increased
medical costs. Debt burdens, paying for college or wondering if retirement is possible, can compile to make
employees financially unwell and distracted at work. Education, inspiration, and tools can get your
employees on track to healthier financial lives. Education consultations and The Well suite of services
from Advanced Capital Group are more than employee education, they help employees take action, no
matter their stage of life. Financial wellness benefits can maximize participation in your retirement plan,
reduce medical costs, increase employee productivity and engagement and act as a powerful recruiting and
retention tool.
ACG’s The Well is a suite of services built to help employees with financial questions and goals no matter
their stage of life. It has three parts which can be offered independently or in tandem.
1. Group education can be tailored to your retirement plan and delivered in-person or online. Partial
and full-day options are available and may include one-on-one retirement related Q&A.
Foundational education topics include:
• Your Retirement Plan - Help employees make the most of their plan
• Finances for Life Planning - Inspire employees to manage their finances
• Pre-Retirement Planning - Strategies to leverage retirement savings
• Legacy Planning - Prepare for life after work
2. Interactive Learning Modules delivering engaging and personalized learning through bite-sized
modules on a variety of topics—like budgeting, building emergency savings, considering home
ownership, funding higher education and more. It is a mobile-friendly platform that is:
• Customizable and able to incorporate your unique benefits
• Supported by implementation, promotion, and marketing
collateral
• Can include Personal Financial Advisory and Group Education
3. Personal Financial Advice can give employees the freedom and flexibility to receive individualized
guidance on financial topics that matter most to them, via one-on-one consultations with a
CERTIFIED FINANCIAL PLANNER™ professional. Personal financial advisory offers:
• Comprehensive and goal-based planning—including live assistance for specific questions
• Unbiased and tailored advice from a fiduciary, based on their best interest
• Industry leading, goals-based planning software
4. Individual Wealth Management
Wealth Management Services
We emphasize continuous and regular account supervision. As part of our wealth management service, we
conduct at least one, but oftentimes more than one meeting (in person, if possible, otherwise via video or
telephone conference) with clients to understand their current financial situation, existing resources,
financial goals, and tolerance for risk. Based on what we learn, we propose an investment approach to the
client. Upon the client’s agreement to the proposed investment plan, we work with the client to establish or
transfer investment accounts so that we can manage the client’s portfolio. Once the relevant accounts are
under our management, we review such accounts on a regular basis and at least quarterly. We may
periodically rebalance or adjust client accounts under our management. If the client experiences any
significant changes to his/her financial or personal circumstances, the client must notify us so that we can
consider such information in managing the client’s investments. Financial planning services may be
provided at no additional cost to our Wealth Management clients.
In its Individual Wealth Management practice, ACG services clients who engaged ACG directly or were
introduced to ACG through the individual’s participation in a retirement plan that is also served by
ACG.
Compliance with PTE 2020-02
On occasion, ACG will make a recommendation to a client with regards to assets held in retirement
accounts. Recommendations include, but are not limited to, rolling assets out of an employer sponsored
plan or rolling to an individual retirement account (IRA) for the Firm to manage for a fee. This is deemed a
conflict of interest.
In December 2020, the DOL adopted a new exemption under ERISA (PTE 2020-02), which specifically
covers three activities prohibited under Section 406(a). These activities are self-dealing, receiving
compensation from third parties in connection with any transactions involving an ERISA plan, and principal
transaction activity.
PTE 2020-02 can be relied upon by, among others, SEC registered investment advisers and their investment
professionals that are deemed investment advice fiduciaries, so long as all the exemption’s requirements are
met, as applicable. There are five main components to PTE 2020-02, which are designed to safeguard
against the conflicts of interest that apply to the prohibited activities covered by the exemption. These
include:
• Adhering to specific Impartial Conduct Standards
• Providing specific disclosure to each ERISA Plan client
• Maintaining applicable written policies and procedures
• Performing and documenting a retrospective review
• Having a senior officer make certain written certifications
ACG is deemed to be an investment advice fiduciary. At all times, the Firm will act in the client’s best
interest in making any recommendations related to assets covered by ERISA. ACG will comply with all
applicable rules to maintain this exemption.
Intelligent Portfolios
Institutional Intelligent Portfolios® is an automated investment management platform that allows ACG to
build a customized suite of portfolios for clients, based on ACG’s investment approach. ACG has selected
the types of strategies offered, the number of different portfolios across the risk spectrum from more
conservative to more aggressive, the asset classes and their weightings in each portfolio, and the specific
mutual funds or exchange-traded funds (ETFs) that are available.
Institutional Intelligent Portfolios® (IIP) is a technology and service platform made available by Schwab
Performance Technologies (SPT) to independent investment advisors (Advisors) who maintain a business
relationship with Schwab Advisor Services™, a division of Charles Schwab & Co., Inc. (Schwab). IIP is
used by Advisors to provide their clients with an automated investment management service.
Schwab, a registered broker-dealer, and member SIPC, provides custody, trading and support services.
SPT and Schwab are separate companies affiliated as subsidiaries of The Charles Schwab Corporation, but
their products and services are independent from each other.
FlexPath Managed Account Services
ACG’s FlexPath Managed Account Services is a defined contribution retirement plan investment service
whereby ACG, in conjunction with NFP/Retirement Plan Advisory Group, builds a set of model portfolios
and partners with Morningstar who sets the asset allocation amongst those model portfolios in order to
create a unique portfolio for a defined contribution retirement plan participant. The managed account’s
asset allocation is designed to reflect the participant’s age, and other personal information, and can be
affected when additional data, including a spouse’s information, is provided by the participant. As the
employee grows older, or personal circumstances change, the allocation can be adjusted and the exposure
to (more conservative) bonds may be increased or the allocation to (more volatile) equities may be
reduced, for example. The underlying model portfolios used by Morningstar are monitored by ACG and
NFP/Retirement Plan Advisory Group and are periodically rebalanced.
DPL Financial Partners
DPL acts as ACG’s insurance department, providing in-depth analysis of clients’ existing policies and
access to new, commission-free insurance solutions that offer value, choice and transparency to fiduciary
advisors like ACG.
Risk of Loss
Generally, the greater the anticipated return of an investment, the higher the risk of loss associated with
that investment. There is no assurance that an investment will provide positive performance over any
period of time. Past performance, while important, is no guarantee of future results and different periods
and market conditions and asset allocation may result in significantly different outcomes. Specific types of
risk each client should understand, as they may be applicable to unique investment assets in a portfolio,
include:
• Market Risk: The performance of the managed account may drop in reaction to certain events and
conditions. For example, political, economic, and social conditions may trigger market events.
• Inflation Risk: When any type of inflation is present, a dollar today will not buy as much as a
dollar next year, because purchasing power is eroding at the rate of inflation.
• Currency Risk: Overseas investments are subject to fluctuations in the value of the dollar against the
currency of the investment’s originating country. This is also referred to as exchange rate risk.
• Reinvestment Risk: This is the risk that future proceeds from investments may have to be
reinvested at a potentially lower rate of return (i.e., interest rate). This primarily relates to fixed
income securities.
• Asset Allocation Risk: Asset allocation may have a more significant effect on account value when one
of the heavily weighted asset classes is performing more poorly than the others.
• Diversification and strategic asset allocation do not assure profit or protect against loss in declining
markets.
Fees for the managed account service can be paid by either the plan sponsor or the participant and are split
amongst ACG, NFP/Retirement Plan Advisory Group, and Morningstar.
Amount of Managed Assets
As of December 31, 2023, ACG had a total of $25,902,315,715 of assets under management. On a
discretionary basis, ACG managed $1,293,880,080 while providing non-discretionary advice on
an additional $24,608,435,635.