General Information
River Capital Advisors, LC (“RCA”) was formed in 1998 and provides wealth management services
including portfolio management, financial planning, and general consulting services to its clients. The
clients of RCA are primarily high net worth individuals, corporations, trusts, estates, and charitable
organizations.
Smoak, Davis & Nixon, LLP is the principal owner of RCA. RCA is indirectly owned by Robert T.
Loverich, Lawrence Kaplan, and Lori Graham.
SERVICES OFFERED
At the outset of each client relationship, RCA spends time with the client, asking questions, discussing
the client’s investment experience and financial circumstances, and reviewing options for the client.
Based on its reviews, RCA generally develops with each client:
• a financial outline for the client based on the client’s financial circumstances and goals, time
horizon, cash flow needs, tax position and the client’s risk tolerance level (the “Financial Profile”
or “Profile”); and
• the client’s investment objectives and guidelines (the “Investment Plan” or “Plan”).
The Financial Profile reflects the client’s current financial picture and a look to the future goals of the
client. The Investment Plan outlines the types of investments RCA will make or recommend on behalf of
the client to meet those goals. The Profile and the Plan are discussed regularly with each client but are
not necessarily written documents. RCA works primarily on a discretionary basis with clients; however,
RCA also provides non-discretionary consulting on a limited basis.
Where RCA provides general consulting services, RCA will work with the client to prepare an appropriate
summary of the specific project(s) to the extent necessary or advisable under the circumstances.
With respect to any account for which RCA meets the definition of a fiduciary under Department of Labor
rules, RCA acknowledges that both RCA and its Related Persons are acting as fiduciaries. Additional
disclosure may be found elsewhere in this Brochure or in the written agreement between RCA and Client.
Portfolio Management
As described above, at the beginning of a client relationship, RCA meets with the client, gathers
information, and performs research and analysis as necessary to develop the client’s Investment Plan.
The Investment Plan will be updated from time to time when requested by the client, or when determined
to be necessary or advisable by RCA based on updates to the client’s financial or other circumstances.
To implement the client’s Investment Plan, RCA will manage the client’s investment portfolio on either a
discretionary basis or a non-discretionary basis. As a discretionary investment adviser, RCA will have
the authority to supervise and direct the portfolio without prior consultation with the client. Under a non-
discretionary arrangement, clients must be contacted prior to the execution of any trade in the account(s)
under management. This can result in a delay in executing recommended trades, which could adversely
affect the performance of the portfolio. This delay also normally means the affected account(s) will not
be able to participate in block trades, a practice designed to enhance the execution quality, timing and/or
cost for all accounts included in the block. In a non-discretionary arrangement, the client retains the
responsibility for the final decision on all actions taken with respect to the portfolio.
Notwithstanding the foregoing, clients may impose certain written restrictions on RCA in the
management of their investment portfolios, such as prohibiting the inclusion of certain types of
investments in an investment portfolio or prohibiting the sale of certain investments held in the account
at the commencement of the relationship. Each client should note, however, that restrictions imposed by
a client may adversely affect the composition and performance of the client’s investment portfolio. Each
client should also note that his or her investment portfolio is treated individually by considering each
purchase or sale for the client’s account. For these and other reasons, performance of client investment
portfolios within the same investment objectives, goals and/or risk tolerance may differ, and clients
should not expect that the composition or performance of their investment portfolios would necessarily
be consistent with similar clients of RCA.
Separate Account Managers
From time to time, when suitable and in accordance with the Investment Plan for a client, RCA may
recommend the use of Separate Account Managers, each a “Manager”. In cases where RCA
recommends the use of one or more Managers to manage all or a portion of a client’s portfolio, RCA will
assist the client in the selection of the Manager(s) most appropriate for the client. The Manager(s) will
be granted discretionary trading authority to provide investment supervisory services for the portfolio,
but RCA retains the authority to terminate the Manager’s relationship or to add new Managers without
specific client consent. With respect to assets managed by a Manager, RCA’s role will be to monitor the
overall financial situation of the client, to monitor the investment approach and performance of the
Manager(s), and to assist the client in understanding the investments of the portfolio. Fees paid to such
Manager(s) are separate from and in addition to the fee assessed by RCA.
When appropriate, RCA may recommend alternative investments to clients who meet the suitability
requirements. Such investments are often referred to as non- publicly traded real estate investment trusts
(REITs), private placements, limited partnerships or direct participation programs. These investments
generally have no or limited secondary market and are considered illiquid and long term. Further, clients
must meet suitability requirements as outlined in the product's offering memorandum. Because of the
illiquidity of the investment and the type of investment, these products are considered risky. Values
reflected on statements or reports issued by our firm are received directly from the alternative investment
company and may not be subject to independent verification. It is important to understand that although
values are reported on a statement, it does not mean the client can liquidate the investment and receive
the stated value. As previously noted and restated for emphasis, these products are generally illiquid
with minimal to no secondary market. Furthermore, the products generally pay a higher expense ratio
than other products.
Charles Schwab & Co., Inc. Institutional Intelligent Portfolios Program
RCA offers an automated investment program (the “Program”) through which clients are invested in a
range of investment strategies RCA has constructed and manage, each consisting of a portfolio of
exchange-traded funds (“Funds”) and a cash allocation. Clients may instruct RCA to exclude up to three
Funds from the client's portfolio. The client's portfolio is held in a brokerage account opened by the client
at Charles Schwab & Co., Inc. (“CS&Co”). RCA uses the Institutional Intelligent Portfolios® platform
(“Platform”), offered by Schwab Performance Technologies (“SPT”), a software provider to independent
investment advisors and an affiliate of CS&Co., to operate the Program. RCA is independent of and not
owned by, affiliated with, or sponsored or supervised by SPT, CS&Co., or their affiliates (together,
“Schwab”). RCA, and not Schwab, is the client's investment advisor and primary point of contact with
respect to the Program. RCA is solely responsible, and Schwab is not responsible, for determining the
appropriateness of the Program for the client, choosing a suitable investment strategy and portfolio for
the client's investment needs and goals, and managing that portfolio on an ongoing basis. RCA has
contracted with SPT to provide RCA with the Platform, which consists of technology and related trading
and account management services for the Program. The Platform enables RCA to make the Program
available to the client online and includes a system that automates certain key parts of RCA's investment
process (the “System”). The System includes an online questionnaire that can help RCA determine the
client's investment objectives and risk tolerance and select an appropriate investment strategy and
portfolio. The client should note that, if RCA uses the online questionnaire, RCA
will recommend a
portfolio via the System in response to the client's answers to the online questionnaire.
The client may then indicate an interest in a portfolio that is one level less or more conservative or
aggressive than the recommended portfolio, but RCA then makes the final decision and select a portfolio
based on all the information RCA has about the client. The System also includes an automated
investment engine through which RCA manages the client's portfolio on an ongoing basis through
automatic rebalancing and tax-loss harvesting (if the client is eligible and elects).
RCA charges clients a fee for services as described below under Item 5 Fees and Compensation. RCA's
fees are not set or supervised by Schwab. The client does not pay brokerage commissions or any other
fees to CS&Co. as part of the Program. Schwab does receive other revenues, including (i) the profit
earned by Charles Schwab Bank, a Schwab affiliate, on the allocation to the Schwab Intelligent Portfolios
Sweep Program described in the Schwab Intelligent Portfolios Sweep Program Disclosure Statement;
(ii) investment advisory and/or administrative service fees (or unitary fees) received by Charles Schwab
Investment Management, Inc., a Schwab affiliate, from Schwab ETFs™ Schwab Funds® and Laudus
Funds® that RCA selects to buy and hold in the client’s brokerage account; (iii) fees received by Schwab
from third-party ETFs that participate in the Schwab ETF OneSource™ program and mutual funds in the
Schwab Mutual Fund Marketplace® (including certain Schwab Funds and Laudus Funds) in the
client's brokerage account for services Schwab provides; and (iv) remuneration Schwab may receive
from the market centers where it routes ETF trade orders for execution. The client makes the changes
to their employer retirement plan. RCA includes one detailed review of the portfolio per year as
well as access to RCA's financial planners when the client needs them to ask general questions
and get their recommendations on retirement, insurance, and estate planning. The client will
also have access to RCA's financial planning website.
Pension Consulting Services
RCA offers pension consulting services to employee benefit plans and their fiduciaries based upon the
needs of the plan and the services requested by the plan sponsor or named fiduciary. In general, these
services may include an existing plan review and analysis, plan-level advice regarding fund selection
and investment options, education services to plan participants, investment performance monitoring,
and/or ongoing consulting. These pension consulting services will generally be non-discretionary and
advisory in nature. The ultimate decision to act on behalf of the plan shall remain with the plan sponsor
or other named fiduciary.
RCA may also assist with participant enrollment meetings and provide investment-related educational
seminars to plan participants on such topics as:
• Diversification;
• Asset allocation;
• Risk tolerance; and
• Time horizon
RCA's educational seminars may include other investment-related topics specific to the particular plan.
RCA may also provide additional types of pension consulting services to plans on an individually
negotiated basis. All services, whether discussed above or customized for the plan based upon
requirements from the plan fiduciaries (which may include additional plan-level or participant-level
services) shall be detailed in a written agreement and be consistent with the parameters set forth in the
plan documents.
Held Away Assets
RCA may leverage an Order Management System through Pontera (formerly known as FeeX) to
implement tax-efficient asset location and opportunistic rebalancing strategies on behalf of the client in
held away accounts. These are primarily 401(k) accounts, HSA, 403(b), and 457 accounts. RCA
regularly reviews the available investment options in these accounts, monitors them, rebalances
accounts based on the client's investment plan and implements investment strategies to incorporate held
away assets.
General Consulting
In addition to the foregoing services, RCA may provide general consulting services to clients. These
services are generally provided on a project basis, and usually include, without limitation, cash flow
planning for certain events such as education expenses or retirement, estate planning analysis, income
tax planning analysis and review of a client’s insurance portfolio, as well as other matters specific to the
client as and when requested by the client and agreed to by RCA. The scope and fees for consulting
services will be negotiated with each client at the time of engagement for the applicable project.
Financial Planning
RCA offers financial planning services which typically involve providing a variety of advisory services to
clients regarding the management of their financial resources based upon an analysis of their individual
needs. These services can range from broad-based financial planning to consultative or single subject
planning. If the client retains RCA for financial planning services, RCA will meet with the client to gather
information about their financial circumstances and objectives. RCA may also use financia l planning
software to determine the client's current financial position and to define and quantify their long-term
goals and objectives. Once RCA specifies those long-term objectives (both financial and non-financial),
RCA will develop shorter-term, targeted objectives. Once RCA reviews and analyze the information the
client provides to RCA and the data derived from the financial planning software, RCA will deliver a
written plan to the client, designed to help the client achieve their stated financial goals and objectives.
Financial plans are based on the client's financial situation at the time RCA presents the plan to the
client, and on the financial information the client provides to RCA. The client must promptly notify RCA
if their financial situation, goals, objectives, or needs change.
The client is under no obligation to act on RCA's financial planning recommendations. Should the client
choose to act on any of RCA's recommendations, the client is not obligated to implement the financial
plan through any of RCA's other investment advisory services. Moreover, the client may act on RCA's
recommendations by placing securities transactions with any brokerage firm.
IRA Rollover Recommendations
Effective December 20, 2021 (or such later date as the US Department of Labor (“DOL”) Field Assistance
Bulletin 2018-02 ceases to be in effect), for purposes of complying with the DOL’s Prohibited Transaction
Exemption 2020-02 (“PTE 2020-02”) where applicable, RCA is providing the following acknowledgment
to the client. When RCA provides investment advice to the client regarding a retirement plan account or
individual retirement account, RCA is the fiduciary within the meaning of Title I of the Employee
Retirement Income Security Act and/or the Internal Revenue Code, as applicable, which are laws
governing retirement accounts. The way RCA makes money creates some conflicts with the client's
interests, so RCA operates under a special rule that requires RCA to act in the client's best interest and
not put RCA's interest ahead of the client. Under this special rule’s provisions, RCA must:
• Meet a professional standard of care when making investment recommendations (give prudent
advice);
• Never put financial interests ahead of when making recommendations (give loyal advice);
• Avoid misleading statements about conflicts of interest, fees, and investments;
• Follow policies and procedures designed to ensure that RCA gives advice that is in the client's
best interest;
• Charge no more than is reasonable for services; and
• Give basic information about conflicts of interest.
RCA benefits financially from the rollover of assets from a retirement account to an account that RCA
manages or provide investment advice, because the assets increase RCA's assets under management
and, in turn, advisory fees. As a fiduciary, RCA only recommends a rollover when believe it is in the
client's best interest.
Assets Under Management
As of December 31, 2023, RCA provides continuous management services for $256,391,512 in client
assets on a discretionary basis, and $37,221,232 in client assets on a non-discretionary basis.