Centaurus Financial Review

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Centaurus Financial, Inc. (CFI) is a registered investment advisor (RIA) and broker-dealer based in Anaheim, California. It provides investment advisory and financial planning services through investment advisor representatives (IARs). The firm currently oversees more than $2.66 billion in assets under management (AUM). 

Centaurus Financial Background

CFI first kicked off operations in 1992. Today, it functions as an RIA and broker-dealer. It’s also a member of the Financial Industry Regulatory Authority (FINRA). The Federation of Financial Services is the principal owner and accounts for more than 75% of ownership interests. 

What Types of Clients Does Centaurus Financial Accept?

CFI serves a diverse group of clients including: 

• Individuals (including high-net-worth individuals) and their families
• Trusts
• Estates
• Businesses 
• Charities and foundations

Centaurus Financial Minimum Account Size

CFI’s account minimums vary depending on what type of investment advisory program you select. But these minimums are typically $25,000.

Services Offered by Centaurus Financial, Inc

CFI partners with IARs, who are independent contractors registered with the Securities and Exchange Commission (SEC) to provide advice through the firm. These IARs generally provide advice around investing, financial planning and portfolio asset allocation. 

They may provide investment advice on a discretionary or non-discretionary basis. The latter means clients need to approve trades within the account before IARs can execute the trades. 

IARs work with the firm to provide the following advisory programs: 

CLASSIC Plus 

Through this program, IARs or approved third-party managers selected by the client will manage an investment portfolio on behalf of the client. Advisors will build an asset allocation based on the client’s personal factors like risk tolerance and investment goals. The portfolio may invest in stocks, exchange-traded funds (ETFs), mutual funds, unit investment trusts (UITs), bonds, alternative Investments, options and cash and/or cash equivalents. 

As with other CFI portfolio programs, the investment advisory agreement that clients sign would include key details such as custodians, fees and expenses. The minimum investment for the CLASSIC Plus program is usually $25,000.

CLASSIC Plus - Morningstar® Managed Portfolios

The CLASSIC Plus - Morningstar Managed Portfolios (MMP) program allows clients to access special guidance and strategies offered through Morningstar. An MMP account generally invests in ETFs and stocks deemed appropriate to the client’s risk tolerance and other considerations. 

Pershing LLC serves as the custodian for this program. 

MMPs are designed for citizens or legal residents of the United States or its territories and can only be offered by an RIA or IAR. Morningstar is responsible for portfolio construction and ongoing monitoring. 

CLASSIC Plus - FlexUMA 

CLASSIC Plus- FlexUMA is a unified managed account program offered through TD Ameritrade Institutional and investment overlay manager Adhesion Wealth Advisor Solutions in partnership with CFI. 

The program generally invests in individual equities, ETFs and mutual funds. However, clients won’t have a direct contractual relationship with a third-party service provider such as the ones involved in the offering of the program. They will work directly with IARs through CFI who will provide access to the services mentioned. 

CLASSIC Plus - Variable Annuity & Variable Life Management 

CFI offers the CLASSIC Plus Variable Annuity (VA) and Variable Life (VL) management programs through an issuing insurance company. IARs manage these variable annuities or variable life policies on a discretionary or non-discretionary basis. 

Third-Party Money Managers (TPMM)

IARs may recommend the assistance of third-party money managers (TPMM). TPMMs can provide access to various model portfolios and different investment strategies as deemed suitable to the client’s financial profile and goals. TPMMs are separate independent RIAs and not affiliated with CFI. 

Retirement Plan services 

At the corporate level, CFI can provide advisory services to qualified retirement plans governed by the Employee Retirement Income Security Act (ERISA). These can include 401(k) plans, pensions and other retirement savings vehicles. IARs can assist plan sponsors by building an investment menu for employees and educating plan participants. 

However, IARs may not serve in a fiduciary capacity to the plan. They are limited to providing non-discretionary services and are not permitted to assume management authority over plan assets. 

Financial Planning 

IARs associated with the firm can provide stand-alone financial planning services depending on your needs and goals. These may include: 

• Investment planning
• College planning
• Insurance planning
• Retirement planning
• Estate planning
• Health/medical planning
• Income planning
• Business planning
• Social Security planning

Centaurus Financial Investment Philosophy

CFI may adopt various investment strategies as it deems suitable to help the client meet his or her goals. These strategies may include: 

Diversification - this strategy involves investing the client’s funds in various asset classes across the investment industry. The firm aims to capture returns through the performance of different asset classes and reducing risk when one or more asset classes undergo a downturn.  

Dollar-cost averaging - this process entails buying a fixed dollar amount worth of securities at specific intervals regardless of the price per share at the time the transaction is executed. This method is used to reduce the risk of suffering major losses when buying a bigger lump sum of a specific security at a market high. 

Asset allocation - the firm would invest client assets in different asset classes as it deems appropriate to the client’s risk tolerance, time horizon and other individual variables. These may include stocks, bonds, cash, mutual funds, alternative investments and more. 

Fees Under Centaurus Financial 

Fees for advisory services vary depending on the advisory program and IAR. Complete details regarding fees can be found in your investment advisory agreement. But keep in mind that they may vary from client to client. In addition, fees may be charged on a flat-rate basis or on a tiered level based on your AUM. However, CFI’s advisory fees generally are negotiable. 

Through the following fee-schedule, CFI provides the maximum asset-based fees as they relate to specific advisory programs and subprograms. 

But note that these are advisory fees and they don’t account for all expenses associated with the management of your portfolio. You may also be charged custodial transaction costs and expense ratios of the underlying funds your portfolio invests in. You should review expense ratios in the publicly available fund prospectuses and examine different fees outlined in your investment advisory agreement available through CFI.  

What to Watch Out For

Clients of CFI work with different IARs that are associated with the firm. They may work with TPPMs not affiliated with CFI. Clients would come into different agreements with such providers and should carefully examine all documentation related to their services. 

Because the firm works with various financial industry entities to offer its services, fees may come from various sources depending on the advisory program you’re in. While not all fees may go to CFI, all related expenses with the management of your account can reduce your assets. 

Disclosures

As of this writing, CFI reported five legal or disciplinary events and disclosures in its last SEC filings. 

Most recently in 2016, a “FINRA industry review found that CFI failed to identify and apply certain sales charge discounts to certain customer’s eligible purchases of Unit Investment Trusts (UITs). Without admitting or denying the findings, CFI paid a $100,000 fine and paid $85,281.62 back to all affected customers.”

The second most recent event was in 2014, when the Financial Industry Regulatory Authority (FINRA) found that the firm fialed to comply with certian SEC rules because five of CFI’s registered representatives functioned as wholesalers for an unaffiliated investment management firm. SEC documents state the firm did not specifically address the supervision of wholesaling activities. Without admitting or denying the findings, CFI consented to a censure and paid a $25,000 fine.”

You can find more information about legal disclosures regarding CFI by visiting the SEC’s official website. 

Opening an Account With Centaurus Financial

You can open an account with CFI by visiting the firm’s official website and clicking on the “contact” tab in order to send a secure message. You can also contact the firm by calling (800) 880-4234.

Where Is Centaurus Financial Located?

CFI is based at the following address: 

2300 E. Katella Ave., Suite 200 Anaheim, California 92806

All information was accurate as of the writing of this article.

Tips for Finding a Financial Advisor 

• Ask questions. Before you agree to work with a financial advisor, you want to make sure the advisor is qualified and can meet your needs. One good to question to ask: what type of clients do you specialize in serving? For more questions to ask, check out this story.
• Use our SmartAsset financial advisor matching tool. It connects you with up to three local financial advisors, which we’ve vetted. You can also access their detailed profiles so you can compare their qualifications before you embark on the right path to financial wellness.