A. Cardinal is a corporation formed on August 14, 1992 in Manitoba, Canada. Cardinal
became registered as an Investment Adviser Firm on December 12, 2002. Cardinal is 100%
principally owned by Cardinal’s employees. Tim Burt and Emily Burt are the firm’s largest
shareholders, respectively.
B. As discussed below, Cardinal offers to its clients (individuals, business entities, investment
companies, pension and profit sharing plans, trusts, estates and charitable organizations,
etc.) investment advisory services. Cardinal also provides financial planning, estate
planning, insurance planning, investment and non-investment related consulting services.
INVESTMENT ADVISORY SERVICES
The client can determine to engage Cardinal to provide discretionary and/or non-
discretionary investment advisory services on a fee basis as discussed at Item 5 below.
Cardinal’s annual investment advisory fee is based upon a percentage (%) of the market
value of the assets placed under Cardinal’s management.
To commence the investment advisory process, an investment adviser representative will
first ascertain each client’s investment objectives and then allocate or recommend that the
client allocate investment assets consistent with the designated investment objectives.
Once allocated, Cardinal provides ongoing monitoring and review of account performance
and asset allocation as compared to client investment objectives, and may periodically
execute or recommend execution of account transactions based upon such reviews. Before
engaging Cardinal to provide investment advisory services, clients are required to enter
into an investment advisory agreement with Cardinal setting forth the terms and conditions
of the engagement, including termination, describing the scope of services to be provided,
and the fee that is due from the client. Once allocated, Cardinal provides ongoing
supervision of the accounts.
To the extent specifically requested by a client, Cardinal may provide consultation services
to its investment advisory clients on investment and non-investment related matters. Any
such consultation services, to the extent rendered, shall not be subject to any separate or
additional fee.
MISCELLANEOUS
Limited Consulting/Implementation Services. To the extent requested and engaged by
the client to do so. Cardinal provides financial and non-financial planning services to its
Canadian investment management clients on investment and non-investment related
matters. Financial planning services are generally not made available to clients located in
the United States. Services include: estate planning, tax planning, risk management,
insurance products and services, and so forth. Cardinal shall not receive any separate or
additional fee for any such consultation services. Please Note: Cardinal believes that it is
important for the client to address financial planning issues on an ongoing basis. Cardinal’s
advisory fee, as set forth at Item 5 below, will remain the same regardless of whether or
not the client determines to address financial planning issues with Cardinal. Neither
Cardinal, nor any of its representatives, serves as an attorney or accountant, and no portion
of Cardinal’s services should be construed as same. Accordingly, Cardinal does not prepare
legal documents, prepare tax returns, or sell insurance products. To the extent requested by
a client, Cardinal may suggest the services of other professionals for certain non-
investment implementation purposes (i.e. attorneys, accountants, insurance agent, etc.),
including representatives of Cardinal in their separate censed capacities as discussed
below. The client is under no obligation to engage the services of any such professional.
The client retains absolute discretion over all such implementation decisions and is free to
accept or reject any recommendations from the Cardinal and or its representatives. Please
Note: If the client engages any such professional, and a dispute arises thereafter relative to
such engagement, the client agrees to seek recourse from and against the engaged
professional. At all times, the engaged licensed professional(s), (i.e., attorney, accountant,
insurance agent, etc.), and not Cardinal, shall be responsible for the quality and competency
of the services provided. Please Also Note: It remains the client’s responsibility to
promptly notify Cardinal if there is ever any change in their financial situation or
investment objectives for the purpose of reviewing, evaluating or revising Cardinal’s
previous recommendations and/or services.
Retirement Plan Rollovers – No Obligation / 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 the Cardinal recommends that
a client roll over their retirement plan assets into an account to be managed by the Cardinal,
such a recommendation creates a conflict of interest if the Cardinal will earn a new (or
increase its current) advisory fee as a result of the rollover. To the extent that Cardinal
recommends that clients roll over assets from their retirement plan (or an existing IRA) to
an IRA managed by Cardinal, then Cardinal represents that it and its investment adviser
representatives are fiduciaries under the Employment Retirement Income Security Act of
1974 (“ERISA”), 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 Cardinal whether it is from an employer’s plan or
an existing IRA.
Non-Discretionary Service Limitations. Clients that determine to engage Cardinal on a
non-discretionary investment advisory basis must be willing to accept that Cardinal
cannot effect any account transactions without obtaining prior consent to such
transaction(s) from the client. Thus, in the event that Cardinal would like to make a
transaction for a client’s account (including in the event of an individual holding or general
market correction), and the client is unavailable, Cardinal will be unable to effect the
account transaction(s) (as it would for its discretionary clients) without first obtaining the
client’s consent.
Limitations of Sub-Advisor / Separate Account Manager Services. Cardinal also serves
as a: (1) sub-adviser to unaffiliated registered investment advisers and (2) privately pooled
investment funds. Cardinal also furnishes sub-advisory services as a Trust Bank portfolio
manager. Specifically, Cardinal provides portfolio models which are implemented by the
Trust Bank. Cardinal also provides subadvisory support to another investment manager
through which its pooled investment fund products are made available. With respect to
these three types of engagements, the unaffiliated investment advisers that engage
Cardinal’s sub-advisory services and/or assist their clients in selecting Cardinal as a
separate account manager, maintain both the initial and ongoing day-to-day relationship
with the underlying client, including the initial and ongoing determination of client
suitability for Cardinal’s investment strategies. Cardinal’s obligation shall be to manage
the client’s account consistent with the investment strategy designated by the unaffiliated
investment adviser. In addition, for all such engagements, Cardinal does not generally have
the ability to choose and/or determine: (1) the custodian and/or broker-dealer for the
client’s account; (2) whether the services are part of a wrap program or provided on an
unbundled basis; or (3) program and/or transaction cost pricing. Therefore, Cardinal is
unable to control or confirm best execution for account transactions. Higher fees and
transaction costs adversely impact account performance.
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 Cardinal independent of engaging Cardinal as an
investment advisor. However, if a prospective client determines to do so, he/she will not
receive Cardinal’s initial and ongoing investment advisory services. In addition to
Cardinal’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).
Custodian Charges-Additional Fees. As discussed below at Item 12 below, when
requested to recommend a broker-dealer/custodian for client accounts, Cardinal generally
recommends that Charles Schwab & Company, Inc.(“Schwab”) serve as the broker-
dealer/custodian for client investment management assets. Broker-dealers such as Schwab
charge brokerage commissions, transaction, and/or other type fees for effecting certain
types of securities transactions (i.e., including transaction fees for certain mutual funds,
and mark-ups and mark-downs charged for fixed income transactions, etc.). The types of
securities for which transaction fees, commissions, and/or other type fees (as well as the
amount of those fees) shall differ depending upon the broker-dealer/custodian While
certain custodians, including Schwab, do not currently charge fees on individual equity
transactions (including ETFs), others do. When beneficial to the client, individual fixed‐
income and/or equity transactions may be effected through broker‐dealers with whom
Cardinal and/or the client have entered into arrangements for prime brokerage clearing
services, including effecting certain client transactions through other SEC registered and
FINRA member broker‐dealers (in which
event, the client generally will incur both the
transaction fee charged by the executing broker‐dealer and a “trade-away” fee charged by
Schwab). These fees/charges are in addition to Cardinal’s investment advisory fee at Item
5 below. Cardinal does not receive any portion of these fees/charges. Please note: Schwab
may also assess fees to clients who elect to receive trade confirmations and account
statements by regular mail rather than electronically. Please also note: there can be no
assurance that Schwab will not change its transaction fee pricing in the future. ANY
QUESTIONS: Cardinal’s Chief Compliance Officer, DeWayne Osborn, remains available
to address any questions that a client or prospective client may have regarding the above.
Portfolio Activity. Cardinal has a fiduciary duty to provide services consistent with the
client’s best interest. As part of its investment advisory services, Cardinal 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 Cardinal determines that changes to a client’s portfolio are neither necessary nor
prudent. Of course, as indicated below, there can be no assurance that investment decisions
made by Cardinal will be profitable or equal any specific performance level(s). Clients
nonetheless remain subject to the fees described in Item 5 below during periods of account
inactivity.
Please Note: Cash Positions. Cardinal continues to treat cash as an asset class. As such,
unless determined to the contrary by Cardinal, all cash positions (money markets, etc.)
shall continue to be included as part of assets under management for purposes of
calculating Cardinal’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), Cardinal 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, Cardinal’s
advisory fee could exceed the interest paid by the client’s money market fund. ANY
QUESTIONS: Cardinal’s Chief Compliance Officer, DeWayne Osborn, remains available
to address any questions that a client or prospective may have regarding the above fee
billing practice
Please Note: 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 Cardinal ), there can be no assurance that investment in ESG securities
or funds will be profitable, or prove successful.
Wrap/Account program services: Cardinal neither sponsors, nor recommends, wrap
account programs. Under a wrap program, the wrap program sponsor arranges for the
investor participant to receive investment advisory services, the execution of securities
brokerage transactions, custody and reporting services for a single specified fee. In the event
that Cardinal is engaged to provide investment advisory services as part of an unaffiliated
wrap-fee program, Cardinal will be unable to negotiate commissions and/or transaction
costs. The program sponsor will determine the broker-dealer though which transactions
must be effected, and the amount of transaction fees and/or commissions to be charged to
the participant investor accounts. Participation in a wrap program may cost the participant
more or less than purchasing such services separately. Higher transaction costs adversely
impact account performance.
Cybersecurity Risk. The information technology systems and networks that Cardinal and
its third-party service providers use to provide services to Cardinal’s clients employ various
controls, which are designed to prevent cybersecurity incidents stemming from intentional
or unintentional actions that could cause significant interruptions in Cardinal’s operations
and result in the unauthorized acquisition or use of clients’ confidential or non-public
personal information. Clients and Cardinal are nonetheless subject to the risk of
cybersecurity incidents that could ultimately cause them to incur losses, including for
example: financial losses, cost and reputational damage to respond to regulatory obligations,
other costs associated with corrective measures, and loss from damage or interruption to
systems. Although Cardinal has established its systems to reduce the risk of cybersecurity
incidents from coming to fruition, there is no guarantee that these efforts will always be
successful, especially considering that Cardinal does not directly control the cybersecurity
measures and policies employed by third-party service providers. Clients could incur similar
adverse consequences resulting from cybersecurity incidents that more directly affect
issuers of securities in which those clients invest, broker-dealers, qualified custodians,
governmental and other regulatory authorities, exchange and other financial market
operators, or other financial institutions.
Borrowing Against Assets/Risks. A client who has a need to borrow money could
determine to do so by using:
• Margin-The account custodian or broker-dealer lends money to the client. The
custodian charges the client interest for the right to borrow money, and uses the assets in
the client’s brokerage account as collateral; and,
• Pledged Assets Loan- In consideration for a lender (i.e., a bank, etc.) to make a loan
to the client, the client pledges investment assets held at the account custodian as
collateral.
These above-described collateralized loans are generally utilized because they typically
provide more favorable interest rates than standard commercial loans. These types of
collateralized loans can assist with a pending home purchase, permit the retirement of more
expensive debt, or enable borrowing in lieu of liquidating existing account positions and
incurring capital gains taxes. However, such loans are not without potential material risk to
the client’s investment assets. The lender (i.e. custodian, bank, etc.) will have recourse
against the client’s investment assets in the event of loan default or if the assets fall below
a certain level. For this reason, Cardinal does not recommend such borrowing unless it is
for specific short-term purposes (i.e. a bridge loan to purchase a new residence). Cardinal
does not recommend such borrowing for investment purposes (i.e. to invest borrowed funds
in the market). Regardless, if the client was to determine to utilize margin or a pledged assets
loan, the following economic benefits would inure to Cardinal:
• by taking the loan rather than liquidating assets in the client’s account, Cardinal
continues to earn a fee on such Account assets; and,
• if the client invests any portion of the loan proceeds in an account to be managed by
Cardinal, Cardinal will receive an advisory fee on the invested amount; and,
• if Cardinal’s advisory fee is based upon the higher margined account value, Cardinal
will earn a correspondingly higher advisory fee. This could provide Cardinal with a
disincentive to encourage the client to discontinue the use of margin.
Please Note: The Client must accept the above risks and potential corresponding
consequences associated with the use of margin or a pledged assets loan.
Client Obligations. In performing its services, Cardinal 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 Cardinal if there is ever any change in their financial
situation or investment objectives for the purpose of reviewing, evaluating or revising
Cardinal’s previous recommendations and/or services.
Disclosure Statement. A copy of Cardinal’s written Brochure as set forth on Part 2A of
Form ADV and Form CRS shall be provided to each client prior to, or contemporaneously
with, the execution of the Investment Management Agreement.
C. Cardinal 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, Cardinal 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 Cardinal’s services. Moreover, it remains each client’s responsibility to
promptly notify Cardinal if there is ever any change in his/her/its financial situation or
investment objectives for the purpose of reviewing/evaluating/revising our previous
recommendations and/or services.
D. Cardinal licenses a model to a wrap fee manager, but has no other relationship with a wrap
fee program.
E. As of September 30, 2023, Cardinal had $2,771,092,229 (USD) in assets under
management on a discretionary basis and $42,122,482 in assets under management on a
non-discretionary basis.