Description of Services and Fees
Howard Capital Management, Inc. is a registered investment adviser based in Roswell, Georgia.
We are organized as a corporation under the laws of the State of Delaware. We have been
providing investment advisory services since 1999. The firm is wholly owned by Ronald Vance
Howard. Currently, we offer the following investment advisory services:
• Diversified Portfolio Development/Management/Ongoing Monitoring
• Private Wealth Services
• Mutual Fund Advisory Services
• Private Fund Investment Management
• Self-Directed Brokerage Window (SDBA)
• Sub-Advisory Services
• 401(k) Optimizer®
• HCM Guided Retirement
• Thrift Savings Plan Services (TSP OptimizerTM)
• Planning Fees
The following paragraphs describe our services and fees. Please refer to the description of each
investment advisory service listed below for information on how we tailor our advisory services to
your individual needs. As used in this brochure, the words "we", "our" and "us" refer to Howard
Capital Management, Inc. and the words "you", "your" and "client" refer to you as either a client or
prospective client of our firm. Also, you may see the term "Associated Person" throughout this
brochure. As used in this brochure, our Associated Persons are our firm's officers, employees,
and all individuals providing investment advice on behalf of our firm.
Howard Capital Management, Inc. (“HCM”) provides fee-only discretionary investment
management services. HCM primarily manages accounts introduced to it by unaffiliated broker-
dealers and investment adviser (the “primary investment professional”), pursuant to which HCM
generally pays a portion of its management fee to the introducing broker-dealer or investment
advisor in accordance with the parameters of SEC Rule 206(4)-1, as amended, and/or its
successor regulations. The referring broker-dealers and investment advisers maintain both the
initial and ongoing day-to-day relationship with the client, including initial and ongoing
determination of client suitability for HCM’s investment strategies. HCM does not provide financial
planning and/or related consulting services. HCM does not serve as an attorney, accountant,
record keeper, pension administrator or insurance agent. Howard Capital Management, Inc. does
not prepare estate planning documents or tax returns, nor does it sell insurance products.
Diversified Portfolio Development/Management/Ongoing Monitoring
We or the client’s primary investment professional will gather information regarding the client’s
financial situation, risk tolerance, investment objectives, and other details regarding the client’s
investment profile. Based on this information, we or the primary investment professional will
allocate, or recommend the client allocate, investment assets amongst various models, investment
strategies, and investment vehicles that we manage on a discretionary basis. For clients with
whom we have a direct relationship, we will regularly reach out to request updated investment
profile details from the client, but it otherwise remains the client’s responsibility to inform us of any
material changes to the client’s financial situation, investment objectives, or other investment
profile information as those changes arise.
When a client engages us through their primary investment professional, the primary investment
professional will be responsible for receiving and regularly updating this investment profile
information and for ensuring that the selected investment models and strategies implemented for
the client are suitable for the client’s investment profile. In such engagements, we play no role in
determining the appropriateness or suitability of any of our investment models, strategies, or
investment vehicles for the client’s individual circumstances.
We will review, analyze, and supervise the purchase and sale of, the financial assets placed under
our management. The client and/or the client’s primary investment professional will authorize our
firm to exercise discretion to determine the securities, and amount of securities, to be purchased
or sold for your account, in accordance with the terms and conditions of the advisory agreement
with our firm (hereinafter the "Advisory Agreement").
We may provide any number of services, including but not necessarily limited to: asset
management, portfolio analysis, and asset allocation services, in each case based on your
investment objectives and financial circumstances as communicated to us by your primary
investment professional. For these services, we will charge you an advisory fee.
A client’s “primary investment professional” is generally a financial industry professional with whom
the client has an established relationship, such as registered representatives of broker-dealers,
investment advisor representatives ("IARs") of registered investment advisors, financial planners
and CPAs (each a "Referring Entity"). These primary investment professionals are generally not
affiliated with our firm, nor are they subject to our supervision and oversight. Please refer to the
"Client Referrals and Other Compensation" section of this Brochure for information regarding such
arrangements.
In limited circumstances, we may offer non-continuous asset management services. Under these
arrangements, while your accounts may be periodically monitored on a regular basis for
performance and adherence to your stated objectives, our understanding of your stated objectives
may be formed without consideration of your other assets, investments, insurance and other
obligations.
Private Wealth Services
Our private wealth services (“PWS”) division is very similar to Development/Management/Ongoing
Monitoring, with an emphasis toward primary investment professionals who have high net worth
clients. PWS assists in identifying and implementing strategies to give them the best opportunity
to achieve their comprehensive financial goals. The PWS team addresses the investment portfolio
in a similar manner to that described in the Development/Management/Ongoing Monitoring section
above, while also introducing and assisting vendors in the areas of estate, business, and tax
reduction strategies. HCM receives a management fee on the client’s portfolio. HCM does not
receive any compensation from any vendors who engage with the advisors or clients.
Mutual Fund and Exchange-Traded Fund Management Services
We provide investment management services to the HCM Tactical Growth Fund, the HCM
Dividend Sector Plus Fund, the HCM Dynamic Income Fund, and the HCM Income Plus Fund,
mutual funds registered under the Investment Company Act of 1940. We also provide investment
advisory services to the HCM Defender 100 and HCM Defender 500 exchange-traded funds
(collectively, the mutual funds and exchange-traded funds are referred to as the “Funds”). The
Funds seek long-term capital appreciation through investments in (i) domestic equity securities of
any market capitalization, (ii) investment companies (including mutual funds that use leverage),
closed-end funds and exchange traded funds ("ETFs"), (including ETFs that use leverage), and
(iii) cash and cash equivalents. With respect to our mutual funds, we are entitled to an annual
management fee equal to 1.25% (0.95% for HCM Income Plus Fund) of each of the Funds'
average daily net assets, paid on a monthly basis. We are entitled to an annual management fee
equal to 0.77% of each exchange-traded fund’s daily net assets, paid on a monthly basis.
We may recommend investments in the Funds for other advisory client accounts, including
accounts for owners, officers, and investment advisor representatives associated with our firm. If
you have engaged us for discretionary management services, we may invest a percentage of your
assets in the Funds, up to 100%, without further approval from you. Securities held in separate
accounts, including accounts for owners, officers, and other individuals associated with our firm,
may also be the same securities as those purchased by the Funds.
Expenses, such as administrative, management, and other fund charges, are associated with all
mutual funds. Advisory fees you pay to us described in the Diversified Portfolio
Development/Management/Ongoing Monitoring and Private Wealth Services sections below
are separate and distinct from the fees and expenses charged by the Funds, which are explained
in the Fund's prospectus available online at
howardcmfunds.com. You should refer to the
prospectus for a complete description of the fees, investment objectives, risks and other relevant
information associated with investing in the Funds.
Please Note: Material Conflict of Interest. In discretionary advisory arrangements, we are
authorized, without prior consultation with the client, to buy our affiliated mutual funds and
exchange-traded funds, in which event we, in accounts other than accounts subject to the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and/or Section 4975
of the Internal Revenue Code of 1986, as amended (“Code”) (“ERISA Accounts”), shall receive
both a management fee payable by the affiliated mutual funds and an advisory fee pursuant to
paragraph 5 below. Because we receive compensation from the Funds, there is a material conflict
of interest, as we have a financial incentive to invest your assets in the Funds or to recommend
that you invest in the Funds rather than other investments. When you use our advisory services,
it is possible for us to receive two payments from your investment. One payment is from our
services we provide to you as outlined in the Advisory Agreement. The second fee is from the
payments we receive from the Funds themselves. However, we will only make such investments
and/or recommendations where we believe it is consistent with our fiduciary duty and your
investment objectives.
For ERISA Accounts, our compensation arrangements can result in prohibited transactions, in
which case we may rely on one or more prohibited transaction exemptions, including but not limited
to U.S. Department of Labor Prohibited Transaction Exemption (“PTE”) 77-4 (“77-4”) and/or PTE
2020-02 (the “DOL Rule”).
When relying on PTE 77-4, the client will approve the investment of assets in our affiliated mutual
funds through the client’s investment advisory agreement. When ERISA Account assets are then
allocated to our affiliated mutual funds, we will receive an advisory fee from the fund for our fund
management services. In these arrangements, any advisory fees we charge to the client directly
will be offset by the fees we receive for fund management. To the extent that such investments
otherwise would constitute a prohibited transaction under ERISA, the client’s primary investment
professional, prior to investing client assets in one of our funds, may: (1) agree that they will take
all actions necessary to assure that the conditions of PTE 77-4 are satisfied; (2) approve the
investment advisory and other fees paid by each of such affiliated mutual fund in relation to the
fees paid by the client under such agreement; and (3) acknowledge receipt of the current
prospectus issued by each of our funds and other disclosures required under PTE 77- 4, and that
it is on the basis of such information that the primary investment professional gives this approval.
We may also rely on the DOL Rule as a PTE. When we provide investment advice to a client
regarding the client’s retirement plan account or individual retirement account, we do so as a
fiduciary within the meaning of Title I of the ERISA and/or the Internal Revenue Code (“IRC”), as
applicable,
which are laws governing retirement accounts. The way we make money creates some
conflicts with client interests, so we may rely upon the DOL Rule, which is a special rule that
requires us to act in the client’s best interest and not put our interests ahead of the client’s.
Under DOL Rule, we must:
• Meet a professional standard of care when making investment recommendations (give
prudent advice);
• Never put our financial interests ahead of the client’s when making recommendations (give
loyal advice);
• Avoid misleading statements about conflicts of interest, fees, and investments;
• Follow policies and procedures designed to ensure that we give advice that is in the client’s
best interest;
• Charge no more than is reasonable for our services; and
• Give the client basic information about conflicts of interest.
We will make a good faith effort to determine if an investment in the Funds is in your best interest
after considering such factors as your goals, time horizon, risk tolerance (items contained in the
Risk Tolerance Questionnaire); and the strategies, fees and expenses of other comparable mutual
funds.
It is possible for you to purchase mutual funds and ETFs directly, without our advisory services.
By doing so, you would be declining our advisory services designed to assist you in determining
investments most suitable to your needs, objectives and risk tolerance. By using our advisory
services and agreeing to the fee associated with these services, you are consenting to the
aforementioned conflict of interest.
Any questions pertaining to this conflict of interest or any other issues should be
addressed with our Chief Compliance Officer.
Private Fund Investment Management
We are the investment manager to the HCM Institutional Equity private fund (referred to as the
“Private Fund”). We, or investment adviser representatives associated with our firm, on a non-
discretionary basis, may recommend that qualified clients consider allocating a portion of their
investment assets to the Private Fund. The terms and conditions for participation in the Private
Fund, including management fees, conflicts of interest, and risk factors, are set forth in the Private
Fund’s offering documents. Our clients are under absolutely no obligation to consider or make an
investment in a private investment fund(s).
1. Private Investment Fund Risk Factors:
Private investment funds generally involve various risk factors, including, but not limited to,
potential for complete loss of principal, liquidity constraints and lack of transparency, a complete
discussion of which is set forth in each fund’s offering documents, which will be provided to each
client for review and consideration. Unlike liquid investments that a client may maintain, private
investment funds do not provide daily liquidity or pricing. Each prospective client investor will be
required to complete a Subscription Agreement (or equivalent), pursuant to which the client shall
establish that he/she is qualified for investment in the fund and acknowledges and accepts the
various risk factors that are associated with such an investment.
2. Conflict of Interest.
Our firm reserves the right to receive compensation from the Private Fund for the investment
management services we provide to the Private Fund. However, as the Private Fund currently only
contains investors that are Associated Persons of our firm, we do not currently collect
compensation from the Private Fund. This section will be revised to disclose the compensation
arrangement and any resulting conflicts of interest, once we begin to collect compensation from
the Private Fund.
Clients are hereby also advised that the Private Fund’s sponsor, Gomez Capital, Inc. (the
“Sponsor”) and our firm are affiliated through common control. The Sponsor receives an asset-
based fee and is eligible to receive a performance-based fee in exchange for services provided to
the Private Fund. Our or the Sponsor’s recommendation that a client become a Private Fund
investor, therefore, presents a conflict of interest, as the recommendation could be based on the
compensation to be received by us or our affiliate. As a result, we and the Sponsor only
recommend investments in the Private Fund when such recommendation is in the best interest of
the client.
No client is under any obligation to become an investor in the Private Fund.
3. Private Investment Fund Valuation.
In the event that we reference the Private Fund on any supplemental account reports, the values
for the Private Fund will generally reflect the most recent value. The current value of any Private
Fund could be significantly more or less than the original purchase price or the price reflected in
any supplemental account report. If the Private Fund has invested in a third-party fund, the
investment manager of that fund is responsible for determining the value of interests in that fund.
We will rely on values provided by the third-party fund’s manager.
Self-Directed Brokerage Window
For individuals who may have retirement assets in a participant-directed plan, we offer investment
services through a self-directed brokerage window. As opposed to being limited by a retirement
plan's particular set of investment choices, your plan provider may offer you a self-directed
brokerage account (SDBA) with the ability to select from a wide range of investments, including
most listed stocks, mutual funds, and ETFs. This line up may include, or be limited exclusively to,
the Funds - our affiliated mutual funds and exchange-traded funds.
A conflict of interest exists if you invest in a self-directed brokerage window. The sole
compensation that we receive for this service comes from recommendations to invest in our
proprietary Funds, and we therefore have a financial incentive to invest your assets in the Funds
or to recommend that you invest in the Funds rather than other investments. In addition, the
Investor Class Shares of the Funds pay shareholder services fees (12b-1 fees). Funds and/or fund
share classes that pay 12b-1 or similar shareholder services fees generally carry a higher internal
expense ratio than funds and/or fund share classes which do not pay such fees. Our
recommendation that a client engage in a transaction which will result in the payment of 12b-1 or
similar shareholder services fees, therefore, presents a further conflict of interest. Please see Item
10 below for further details.
When you engage us in a SDBA arrangement, you may grant us limited power of attorney - limited
to the purchase and sale of securities, including the trading of options, if applicable. This trading
authorization gives us the ability to buy and sell the same range of securities that you have access
to as if you were to trade the account yourself. You authorize us discretion to trade your account
without approval or directions from you, but in accordance with the Advisory Agreement.
Notwithstanding this discretionary authority, we generally will not use discretion to allocate assets
between Funds in a manner that would serve to increase our total compensation, and, to the extent
applicable, we will generally only provide such recommendations on a non-discretionary basis.
We do not have the authority to transfer, withdraw or disperse money or assets from your account.
Sub-Advisory Services
We may also serve as a sub-adviser to unaffiliated registered investment advisers per the terms
and conditions of a written Sub-Advisory Agreement. With respect to our sub-advisory services,
the unaffiliated investment advisers that engage our sub-advisory services maintain both the initial
and ongoing day-to-day relationship with the underlying client, including initial and ongoing
determination of client suitability for our designated investment strategies. If the custodian/broker-
dealer is determined by the unaffiliated investment adviser, we will be unable to negotiate
commissions and/or transaction costs, and/or seek better execution. As a result, client may pay
higher commissions or other transaction costs or greater spreads, or receive less favorable net
prices, on transactions for the account than would otherwise be the case through alternative
clearing arrangements recommended by us. Higher transaction costs adversely impact account
performance.
401(k) Optimizer®
We offer personalized non-discretionary investment management services to retirement plan
participants through 401(k) Optimizer®, a web-based tool intended to help clients invest in their
employer’s 401(k) or similar defined contribution plan. Through this offering, the 401(k) Optimizer
tool analyzes the plan participant’s risk tolerance considering current market conditions and
provides recommendations based on the investment options available in the client’s retirement
plan. The 401(k) Optimizer® tool then monitors and provides recommendations on a quarterly
basis. In providing these services, 401(k) Optimizer® leverages HCM-BuyLine®, a proprietary
indicator that signals when and how much to invest in equities.
HCM Guided Retirement
We offer personalized discretionary investment management services to retirement plan
participants through HCM Guided Retirement. This custom model approach helps clients invest in
their employer’s 401(k) or similar defined contribution plan. Through this offering, plan participants
have access to custom risk-based asset allocation services. In our capacity as an investment
manager under Section 3(38) of ERISA, we provide discretionary asset allocations amongst the
investment options available. HCM Guided Retirement then monitors and reallocates and/or
rebalances the participant’s plan assets on at least a quarterly basis. In providing these services,
HCM Guided Retirement leverages HCM-BuyLine®, a proprietary indicator that signals when and
how much to invest in equities. HCM’s annual fee assessed to the plan for this service is 0.06%
of plan assets, assessed on a quarterly basis, in arrears.
Plans may select either our HCM Blended Models or our Custom models. The Custom Models
utilize the existing funds in the plan’s core fund line-up. We then create 5 risk-based investment
models from which participants can select. For participants electing to place assets in the Custom
models, the participant’s annual fee will be 0.40% of participant assets placed within the models.
This 0.40% includes custodial fees.
Plans may also select our HCM Blended Models, which are models comprised of our HCM Funds.
Plans and participants selecting the Blended Models are not assessed any fees for utilizing these
models, but there is a custodial fee assessed by the custodian on the plan. Custodial fees
generally range from 2.5 bps to 3.5bps, depending on the custodian.
TSP OptimizerTM
Through our TSP OptimizerTM tool, we offer services to federal employees in choosing and
allocating investments of assets held in a Thrift Savings Plan. Similar to our 401(k) Optimizer®,
TSP OptimizerTM will review your information, risk tolerance, investment horizon, and other relevant
factors to properly allocate and diversify your portfolio.
Planning Fees
Although we do not offer financial planning, we may bill your account on behalf of a Referring
Entity who offers you financial planning services. We do not receive any portion of this fee, but bill
it for the Referring Entity as a courtesy. You acknowledge we are not responsible for any claims
resulting from the planning services conducted by the Referring Entity.
Types of Investments
We offer advice on equity securities, exchange traded fund shares, and mutual fund shares.
Assets Under Management
As of 12/31/2023, we managed approximately $5,232,377,716 in client assets on a discretionary
basis.