Clearwater Capital Advisors, LLC Doing Business As (DBA) Clearwater Capital Partners (CCP) is an SEC-
registered investment adviser with its principal place of business located in Illinois. Clearwater Capital
Partners began conducting business in 2006 as BSC Private Wealth Management, LLC.
CCP sponsors the Clearwater Capital Strategic Wealth Management Program (the "Program"), a wrap fee
program. A wrap fee program is an advisory program under which a specified fee or fees not based directly
on transactions in the client's account is charged for advisory services, which includes portfolio
management and the execution of client transactions.
This Wrap Fee Program Brochure is limited to describing the services, fees, and other necessary
information clients should consider prior to becoming a client within the Program. For a complete description
of the other services offered by the firm and the fees charged for those services, clients should refer to the
Form ADV Part 2: Firm Brochure.
You may obtain a copy of the Firm Brochure by contacting us at 847-841-8650 or general@ccpwealth.com.
CCP sponsors and acts as the sole investment manager to the Program. CCP manages assets for many
different types of clients to help meet their financial goals while remaining sensitive to risk tolerance and
time horizons. As a fiduciary it is CCP’s duty to always act in the client’s best interest. This is accomplished
in part by knowing the client. The firm has established a service-oriented advisory practice with open lines
of communication. Working with clients to understand their investment objectives, while educating them
about CCP’s process, facilitates the kind of working relationship CCP values.
Services
CCP provides the Wrap Advisory Services based on each individual client’s financial circumstances and
investment objectives. CCP meets with each client to discuss the client’s current financial condition and to
review the client’s current investment holdings. Based upon each client’s circumstances, CCP determines
an appropriate asset allocation for the client’s investment portfolio in accordance with the client’s specific
financial objectives and risk tolerance and in consideration of other factors, including the client’s time
horizon (education funding, home purchase, retirement, legacy planning), liquidity needs, and in some
cases other available resources (including external retirement plans, projected social security, outside
investments, real estate, and insurance). Each client’s financial objectives, risk tolerance, and liquidity
needs, along with a recommended asset allocation, are incorporated into their ongoing investment strategy.
CCP’s wrap fee program allows clients to pay a single fee for investment advisory services and associated
custodial transaction costs.
As described below, recommended custodians make other products and services available to CCP (see
“Products and Services Available from the Custodian”). Consequently, CCP has an incentive to recommend
that a client participate in CCP’s wrap fee program and open account(s) with these custodians. CCP
believes, however, that CCP’s recommendation to the wrap fee program, including the use of an
independent custodian and broker, is in the best interests of those of clients to whom CCP recommends it
based on (a) an assessment of their investment objectives, financial situation, CCP’s investment plans and
anticipated trading activity in their accounts and all other relevant factors, and (b) the scope, quality, and
price of the custodian’s services and not based on the Custodian’s payment for third party services that
may not directly benefit the client.
CCP manages Program accounts on a primarily discretionary basis. Private Placement investments will
generally be managed on a non-discretionary basis, due to their nature and subscription requirements.
Continual account supervision is guided by the stated objectives of the client. CCP offers advice through
the Program with respect to portfolios which may include any of the following securities:
• Exchange-listed securities
• Securities traded over-the-counter
• Foreign issuers
•Corporate debt securities (other than
commercial paper)
• Certificates of deposit
• Municipal securities
• Variable annuities
• Mutual fund shares
• United States governmental securities
• Options contracts on securities
• Interests in partnerships investing in real estate
• Interests in partnerships investing in debt and/or
equity, both public and private
• Interests in partnerships investing in oil and gas
interest
CCP’s investment recommendations are not limited to any specific product or service offered by a broker
dealer or insurance company. Client portfolios primarily consist of exchange-traded funds (“ETFs”), mutual
funds (no-load or load-waived), and/or closed-end funds (“CEFs”). However, client portfolios may include
some individual stocks and fixed income securities, as well as other securities listed above.
Thematic Exploration Strategies
Select clients will be invited to participate in CCP Thematic Exploration Strategy portfolios. These portfolios
will utilize similar investment vehicles as listed above but will generally be designed to provide direct
exposure to specific investments in key thematic areas that CCP believes to have above average growth
potential, but also with above average risk. Due to the high-risk nature of these strategies, including
potential loss of principal, participation will be limited based on the client's stated investment objectives,
tolerance for risk, liquidity and suitability.
CCP’s clients are advised to promptly notify CCP in writing if there are ever any changes in their financial
situation or investment objectives which may impact how his/her account should be managed or if they wish
to impose any reasonable restrictions upon CCP’s management services.
Fees and Compensation
The annualized fee for the Program is charged as a percentage of aggregated assets under management,
according to the following schedule:
Tiered Fee Schedule
Assets Under Management Marginal Annual Fee
$0 - $2,000,000 1.000%
$2,000,001 - $5,000,000 0.750%
$5,000,001 - $10,000,000 0.550%
$10,000,001 - $25,000,000 0.350%
$25,000,001 - $50,000,000 0.300%
$50,000,001 - $100,000,000 0.250%
Above $100,000,000 0.200%
As an example, a client with $6,000,000 in aggregated Assets Under Management may be charged 1.00%
on the first $2,000,000 of Assets, 0.750% on the next $3,000,000 of Assets, and 0.550% on the final
$1,000,000 of Assets.
For clients with accounts at Schwab, CCP fees are generally billed monthly, in advance, at the beginning
of each calendar month based upon the value (market value or fair market value in the absence of market
value), of the client's account at the end of the previous month. For clients with accounts at LPL, CCP fees
are generally billed quarterly, in advance, at the beginning of each calendar quarter based upon the value
(market value or fair market value in the absence of market value), of the client's account at the end of the
previous quarter. Any accounts held at a custodian that is not one of CCP’s recommended firms will be
handled based on similar procedures based on that custodian’s capabilities.
The client may make additions to and withdrawals from the account at any time, subject to CCP’s right to
terminate an account. If assets are deposited into an account the fee payable with respect to such assets
will be prorated based on the number of days remaining in the billing cycle. Clients may withdraw account
assets with notice to CCP, subject to the usual and customary securities settlement procedures. In the
event of a distribution, CCP shall refund its unearned fee for that billing cycle based on the number of days
remaining. However, CCP designs its portfolios as long-term investments and asset withdrawals may impair
the achievement of the client’s investment objectives. All fee adjustments due to flows will be made during
the fee cycle following the flow(s).
For the initial billing
period of investment management services, fees shall be calculated on a pro rata basis.
The Agreement between CCP and the client will continue in effect until terminated by either party pursuant
to the terms of the Agreement. CCP’s fee shall be prorated through the date of termination and any
remaining balance shall be charged or refunded to the client, as appropriate, in a timely manner subject to
the 30 day notice requirement.
Fees will be directly debited in advance from the account in accordance with the client authorization in the
Client Services Agreement. The Custodian(s) recommended by CCP have agreed to send a statement to
the client, at least quarterly, indicating all amounts disbursed from the account including the amount of
management fees paid directly to CCP.
Minimum Fee Requirement: To ensure that CCP is best positioned to provide services at the level
expected and required by its clients, the firm has instituted a minimum monthly fee of $416.67 ($5,000
annually) for all new relationships participating in the Wrap Fee Program entered into after March 31, 2024.
The minimum fee will be based on total collected fees for the client billing group and will be applied across
all accounts under management on a prorated basis. This minimum fee may cause you to determine the
cost of our services to be cost prohibitive as it could cause you to pay a fee greater than 1.00% per annum,
depending on the level of assets in your billing group.
General Fee Information
What services are covered by the Program fees? The Program fees pay for the firm’s advisory services
to clients under the Program, the administrative expenses of the Program, and the trade execution charges
for trades on the clients' assets custodied at the recommended Custodians.
What services are not covered by the Program fees? The Program fees do not cover brokerage fees to
the extent trades are conducted through brokers or dealers other than the recommended Custodians (trade
away fees) and custody charges where applicable. The Program fees do not include the expenses
associated with mutual funds, ETFs, or CEFs (such as fund management fees charged to each fund's
investors), mark-ups, mark-downs, spreads paid to market makers, and/or odd-lot differential fees. CCP
does not retain any portion of these charges.
Other Fees and Expenses. Clients may incur charges from the Custodian for other account services
provided not directly related to the execution and clearing of transactions, including, but not limited to, IRA
custodial fees, safekeeping fees, wire transfer fees, interest charges on margin loans, exchange fees, and
fees for transfers of securities. CCP does not retain any portion of these charges.
Additional Information about Program Fees. Under the Program, the participant receives investment
advisory services, the execution of securities brokerage transactions, and reporting services for a single
specified Program Fee. Clients are cautioned that depending on the level of fees charged by the executing
broker-dealer, and the amount of portfolio activity in the clients' account, the value of the services provided
under this Program may exceed the total cost of such services had they been provided separately. In
addition, the Program Fee may be higher or lower than that charged by other sponsors of comparable wrap
fee programs. Inasmuch as CCP will pay the execution costs of securities transactions executed in Program
client accounts, a disincentive exists to enter trades on behalf of Program participants. Further, the
Custodian charges different execution costs for different but similar securities. While CCP endeavors to
always make investment decisions based on the needs of the client, it should be noted that an incentive
exists to utilize lower execution cost funds.
Negotiability of Fees. Although CCP has established the aforementioned fee schedule(s), CCP retains
the discretion to negotiate alternative fees on a client-by-client basis. Client facts, circumstances and needs
are considered in determining an alternative fee schedule. These include the complexity of the case, assets
to be placed under management, anticipated future additional assets, related accounts, portfolio style,
account composition, reports, among other factors. As such, fee levels and structure will vary between
clients. CCP may group certain related client accounts for the purposes of achieving the minimum account
size requirements and determining the annualized fee. Discounts, not generally available to CCP’s advisory
clients, may be offered to family members and friends of associated persons of the firm. The specific annual
fee schedule is identified in the contract between the advisor and each client.
Grandfathering of Fees. A pre-existing advisory client may be subject to Clearwater’s Program fees in
effect at the time that client entered into the advisory relationship. Therefore, the firm's fees will differ among
clients.
Termination of the Advisory Relationship. An Advisory client will have a period of five (5) business days
from the date of signing the investment advisory agreement to unconditionally rescind the agreement and
receive a full refund of all fees. Thereafter, a client agreement may be canceled at any time, by either
party, for any reason upon receipt of 30 days written notice. As disclosed above, certain fees are paid in
advance of services provided. Upon termination of any account, any prepaid, unearned fees will be promptly
refunded. In calculating a client’s reimbursement of fees, CCP will pro rate the reimbursement according to
the number of days remaining in the billing period subject to the 30 day notice requirement.
Fund Fees. All fees paid to Clearwater for investment advisory services are separate and distinct from the
fees and expenses charged by mutual funds, ETFs, and CEFs (each a “Fund” and, collectively, the “Funds”)
to their shareholders. These fees and expenses are described in each Fund's prospectus. These fees will
generally include a management fee, other fund expenses, and a possible distribution or marketing fee,
known as a 12b-1 fee. These 12b-1 fees are considered an operational expense and, as such, are included
in a fund's expense ratio. The firm does NOT receive any portion of these fees.
A client could invest in a Fund directly, without CCP’s services. In that case, the client would not receive
the services provided by the firm which are designed, among other things, to assist the client in determining
which Fund or Funds are most appropriate to each client’s financial condition and objectives. Accordingly,
the client should review both the fees charged by the Funds and CCP’s fees to fully understand the total
amount of fees to be paid by the client and to thereby evaluate the advisory services being provided.
Advisory Fees in General. Clients should note that similar advisory services may (or may not) be available
from other registered (or unregistered) investment advisers for higher, similar, or lower fees.
Limited Trade Aggregation. Transactions for Program clients generally will be effected independently,
unless CCP decides to purchase or sell the same securities for several Program clients at approximately
the same time. CCP may (but is not obligated to) combine or batch such orders to improve transaction
execution, to negotiate more favorable commission rates, or to allocate equitably among CCP’s Program
clients differences in prices and commissions or other transaction costs that might have been obtained had
such orders been placed independently. Under this procedure, transactions will generally be averaged as
to price and allocated among CCP’s clients pro rata to the purchase and sale orders placed for each client
on any given day. To the extent that CCP determines to aggregate client orders for the purchase or sale of
securities CCP shall generally do so in accordance with applicable rules promulgated under the Advisers
Act and no-action guidance provided by the staff of the U.S. Securities and Exchange Commission. CCP
shall not receive any additional compensation or remuneration as a result of the aggregation.
Compensation
Please refer to Client Referrals under Item 9 below.