Page 4
A. Exchange Capital Management, Inc.
Exchange Capital Management, Inc. (“Exchange Capital Management” and/or “the firm”) is an
independent investment advisory firm registered with the U.S. Securities & Exchange
Commission. Located in Ann Arbor, Michigan, Exchange Capital Management was incorporated
in 1989 and began operations early in 1990. The owners of the firm are Michael R. Reid, CFA,
Kevin D. McVeigh, CFA, Andrew D. Stewart, CFA and Joseph S. Crowley.
B. Advisory Services Offered
Investment Advisory and Supervisory Services
Exchange Capital Management provides investment advisory and supervisory services for private
clients, financial institutions, corporate clients, and foundations.
Our management philosophy emphasizes fundamental security and credit analysis with a strong
preference for constructing diversified investment portfolios using individual stock and bond
positions.
Although Exchange Capital Management customarily invests client assets using individual stocks
and bonds, there may be occasions when for convenience, lack of critical mass, or meeting
diversification requirements, we may invest your assets in mutual funds or exchange traded
funds (ETFs). Additional information pertaining to our methods of analysis and investment
strategies (including the risk of loss) is disclosed in Item 8.
The investment policy and financial planning services offered by Exchange Capital Management
generally includes a quantitative assessment of your asset sufficiency over time and is intended
to help you develop a written statement of investment policy to guide investment decisions.
Although the financial planning services are available to you without additional charge, you may
also elect to have these services performed by another financial professional or consultant, or to
self direct your financial planning and investment policy activities.
Before making recommendations to you regarding a specific investment strategy, Exchange
Capital Management will discuss the suitability of various alternatives within the context of your
(i) liquid net worth, (ii) current annual earnings, (iii) savings rate, (iv) distribution or liquidity
needs, (v) planned gifts to family members or charitable institutions, (vi) significant cash flows
from sale of a business, inheritance, real estate or other purchases, (vii) executive stock options
and restricted stock holdings, (viii) current and deferred tax obligations, and (ix) estate plan.
Clients are asked to immediately notify Exchange Capital Management of material changes in
your financial circumstances or condition. In most instances, the case analysis is reviewed on an
annual basis and updated as needed. Clients should be aware that Exchange Capital
Management does not render legal, tax, or accounting advice.
Page 5
Retirement Plan Participant Account Management (Discretionary)
We use a third-party platform (Pontera Order Management System) to facilitate management of
held away assets such as defined contribution plan participant accounts, with discretion.
The platform allows us to avoid being considered to have custody of client funds since we do
not have direct access to client log-in credentials to effect trades. We are not affiliated with the
platform in any way and receive no compensation from them for using their platform. A link will
be provided to the client allowing them to connect an account(s) to the platform. Once client
account(s) is connected to the platform, we will review the current account allocations. When
deemed necessary, we will rebalance the account considering client investment goals and risk
tolerance, and any change in allocations
will consider current economic and market trends. The
goal is to improve account performance over time, minimize loss during difficult markets, and
manage internal fees that harm account performance. Client account(s) will be reviewed at least
quarterly and allocation changes will be made as deemed necessary.
We may provide these services or, alternatively, may arrange for the Plan’s other providers to
offer these services, as agreed upon between our firm and the client.
Financial Planning Services
Financial planning services are provided at no additional charge to clients who have contracted
with the firm for investment advisory services. Clients will receive a written or oral report
(depending on the client’s preference) providing a basic financial plan designed to help achieve
their stated financial goals and objectives. Based on the client’s needs, financial planning
services may include (but are not limited to) the following:
▪ Preparation of a recommended asset allocation that serves to diversify the client's
portfolio among different categories of investments, such as domestic and international
small, medium, and large capitalization securities; corporate and government fixed
income (short-, intermediate-, and long-term maturities); emerging market securities (i.e.,
foreign issuers); real estate investment trusts; and such other alternative asset categories
that are suitable in light of the client's investment goals, objectives, and risk tolerance.
▪ Preparation of an investment policy statement setting forth the client’s investment plan,
with specific direction in terms of diversification requirements, tax issues, estate planning
issues, risk tolerance, retirement, and other identified objectives of the client, including a
targeted rate-of-return objective.
▪ Preparation of a retirement plan that serves to identify whether the client is saving
enough and investing in a way that meets retirement objectives in light of the client's
financial circumstances and risk tolerance.
▪ Preparation of cash flow projections to ensure that the client can meet daily living
expenses and obligations.
▪ Insurance planning to meet the needs of the client, taking into account family, business,
and other financial objectives of the client.
▪ General family office and business consulting:
• Retirement objectives
Page 6
• Philanthropy
• Estate planning
• Wealth transition
• Business succession and related issues
• Recommendation of third-party managers for use by the client
Exchange Capital Management gathers required information through in-depth personal
interviews and questionnaires. Information gathered includes a client's current financial status,
investment objectives, future goals, and attitudes toward risk. Related documents supplied by
the client are carefully reviewed, and a report is prepared covering one or more of the above-
mentioned topics as directed by the client.
C. Client-Tailored Services and Client-Imposed Restrictions
Each client’s account will be managed on the basis of the client’s financial situation and
investment objectives and in accordance with any reasonable restrictions imposed by the client
on the management of the account—for example, restricting the type or amount of security to
be purchased in the portfolio.
D. Wrap Fee Programs
Exchange Capital Management not participate in wrap fee programs. (Wrap fee programs offer
services for one all-inclusive fee.)
E. Client Assets Under Management
As of December 31, 2022, Exchange Capital Management managed $608,190,079 of
discretionary assets and $1,726,627 of non-discretionary assets.