Based in Fort Washington, Pennsylvania, Capital Analysts delivers financial services through a national network of independent advisor representatives (IARs). These IARs aren’t direct employees of the firm. Instead, they’re independent contractors, so as a client, you likely won't receive direct communication from Capital Analysts.
Collectively through its IARs, this fee-based registered investment advisor (RIA) firm oversees billions of dollars in assets.
Capital Analysts Background
Founded in 2012, Capital Analysts is owned by Lincoln Capital Holdings, which also owns Lincoln Investment Planning, a separate RIA and registered broker-dealer.
The firm's investment and research team includes several accredited professionals, including five chartered financial analysts (CFAs), one certified financial planner (CFP), one certified public accountant (CPA) and one member with the certificate in investment performance management (CIPM).
Capital Analysts Client Types and Minimum Account Sizes
Capital Analysts work with a variety of client types including individuals, high-net-worth individuals, businesses, foundations, trusts and corporate retirement plans.
Account minimums vary depending on several factors such as the investment program, strategies and other entities involved with the management of your account. Minimum investments generally range from $50,000 to $1 million. The firm, though, reserves the right to change the amount at any time. The firm may also waive any minimum account requirements at its sole discretion.
Services Offered by Capital Analysts
Capital Analysts deliver investment and financial planning advice through a variety of programs, which may involve the services and products of other financial services firms. These programs are described below.
Capital Analysts Asset Managed Program (CAAMP): The Capital Analysts Managed Programs are managed on a discretionary basis by Capital Analysts through its Investment Management & Research (IM&R) team. These programs include model portfolios that invest in mutual funds, exchange-traded funds (ETFs), and/or stock portfolios with automatic rebalancing.
Independent Advisor Representatives (IARs): Independent advisors working through Capital Analysts may provide direct investment advice or utilize other model portfolios. These would be tailored to your risk tolerance and designed to meet stated investment objectives. Depending on your needs, they may invest in a variety of securities including stocks, bonds, mutual funds and options.
Third-Party Managed Model and Third-Party Custom Portfolios: This program may involve the work of the investment team at Lincoln Investments, an IAR with Capital Analysts and one or more third-party portfolio managers or co-advisors. These entities would devise portfolios based on your risk tolerance and investment objectives. They may offer exposure to various asset classes such as large-cap or multi-cap equities.
Financial Planning: IARs may provide limited financial planning services upon request. This advice may cover such topics as college savings plans, preparing for retirement, succession planning and insurance analysis.
Retirement Plan Services: IARs may advise sponsors of retirement plans governed by the Employee Retirement Income Security Act (ERISA). Services may include fiduciary selection and monitoring of investment options available to plan participants and educational services to eligible participants.
Capital Analysts Investment Philosophy
Investment strategies vary, depending on the IAR and other entities involved with managing your investments. Through its many offerings, the firm tries to accommodate every investor. To help you determine which investment program is right for you, your IAR would identify your financial objectives, capacity for risk and other relevant factors.
Fees Under Capital Analysts
Investment advisory fees are typically charged as a percentage of your assets under management (AUM). The percentage depends on such factors as the investment program, asset class and size of the account.
The maximum asset-based fees charged in the Capital Analysts Managed Program range from 1.30% to 1.70%, depending on the account type. That fee includes the advisory fee charged by your IAR and Capital Analysts. If you’re enrolled in one of the program’s wrap fee options, it also covers third-party costs such as brokerage fees, custodial costs and the select manager's fees if you’re enrolled in the third-party portfolio management service.
Financial planning fees are generally charged on a fixed fee or hourly basis. They would vary depending on the complexity of the services provided.
Retirement plan services are negotiable between Capital Analysts, the IAR and the plan sponsor.
What to Watch Out For
Capital Analysts has multiple regulatory disclosures listed on its most recent Form ADV filed with the SEC.
The Securities and Exchange Commission (SEC) alleged that between April 2013 and March 2016, Capital Analysts failed to disclose a conflict of interest when it invested CAAMS wrap-fee clients in mutual fund share classes that paid 12b-1 fees to affiliated broker-dealer Lincoln Investment, when shares of the same fund were available and did not pay these 12b-1 fees. The SEC alleged that this event and related actions led the firm to violate the Investment Advisors Act of 1940.
Capital Analysts neither denied nor agreed to the findings, but entered into a settlement with the SEC, which ordered the firm to pay a $300,000 civil monetary penalty and shareholder service fee revenue in the amount of $770,476 with interest to the U.S. Treasury. In addition, the firm agreed to pay an addition $1.04 million in disgorgement fees and interest.
For complete details, you can access the firm’s Form ADV on the SEC's Investment Advisor Public Disclosure site.
Most IARs are licensed insurance agents and representatives of a broker-dealer (likely Lincoln Investment). These multiple roles, as well as many affiliations, may present potential conflicts of interest. When receiving recommendations, clients should be clear on their basis and if and how the IAR and firm may benefit from the recommendation. IARs are also bound by fiduciary duty to always act in clients' best interests.
Opening an Account at Capital Analysts
Those looking to open an account with Capital Analysts should call the firm directly at (800) 685-7515.
All information is accurate as of the writing of this article.
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