Firm Description
Cape Investment Advisory, Inc. (“CIA” or “Advisor” or “Sponsor”), solely owned by James R. Webb, is
an SEC Registered Investment Adviser that has been in business since March 2008. CIA has filed
notices in 34 States and provides investment management and financial planning services primarily
to individuals, trusts, and corporations. CIA offers investment management services on both a
discretionary and non-discretionary basis. As of December 31, 2023, the amount of discretionary
assets under management was approximately $314,347,563 and non-discretionary assets under
management was approximately $50,864,460.78.
Our business model is based on a network of Investment Adviser Representatives (“IARs”) with
offices in various locations each having significant flexibility to provide tailored individualized
investment advice to clients. While all Cape IARs are registered with, and subject to oversight
and supervision by Cape, they operate their businesses independently with some offices
working under and providing client services utilizing a separate business name or “DBA.” A list
of approved DBA names can be found on our Schedule D, Section 1.B which is available on
the SEC’s Investment Advisor Public Disclosure website at
www.adviserinfo.sec.gov.
CIA offers and provides a combination of the following advisory services for individuals, businesses,
qualified retirement plans, individual retirement accounts, trusts, and other entities on a fee-only
basis.
• Discretionary investment management
• Nondiscretionary investment management
• Financial planning services
• Retirement plan advisory services
Note that 401(k) Counseling Services are provided using the information and education exception
which does not constitute providing investment advice. As such, those assets are not included as
assets under management, but represent a significant revenue stream for the entity.
The process begins through personal discussions between the Investment Advisor Representative
(“IAR”) and the client. This interview establishes investment goals, determines suitability, and
gathers information pertaining to the client’s financial situation, objectives, time horizon and risk
tolerance. This information becomes the basis for determining and constructing the investment
plan/asset allocation plan which the IAR believes is in the best interest of the client’s stated goals.
The investment plan will contain assets in classes that CIA and the IAR believe meets client’s investment
objectives. CIA also offers clients the opportunity to utilize the services provided by third party money
managers.
Discretionary Investment Management
We provide discretionary portfolio management services to clients using a variety of standard and
customized investment strategies. Each portfolio is designed to meet a particular investment
objective. As granted in our Advisory Agreement, we can use this discretionary authority to buy and
sell securities on our clients’ behalf.
Nondiscretionary Investment Management
Clients may request that they be informed and agree with the trade recommendation(s) prior to it
being entered by the IAR. Typically, this type of investment management is considered “fee in lieu
of commission” and is similar to a traditional brokerage account except for how compensation is
received. Clients may also occasionally request investments and trades in a discretionary account
that are entered as unsolicited trades at the client’s request. In those circumstances the performance
of the account may be impacted by such requests as well as impacting the risk and objectives of the
account.
Financial Planning Services
Financial planning services are provided to both individual and institutional clients. These plans may
be comprehensive in nature or focus on specific areas of interest, at the request of the client.
Throughout the time of engagement, clients are obligated to notify Advisor promptly if they experience
a change in financial conditions in order to provide Advisor the opportunity to make changes in advice
or strategies. CIA may offer an hourly rate for a limited plan related to a specific need such as estate
planning only or college funding only.
The client may choose to implement any portion, or none of the plan, at their sole discretion. Advisor
will not provide ongoing investment management under a Financial Planning Agreement; however,
clients will be able to engage Advisor to conduct a review of investment accounts on a periodic or
annual basis for an hourly rate.
CIA and its IARs do not practice law or accounting as officers, directors, managers, employees, or
independent contractors of CIA. It is the client’s responsibility to understand the need to secure the
services of other professionals in these areas when necessary.
Retirement Plan Advisory Services
Investment advisory services provided to a company for their retirement plan vary depending on the
scope of the agreement. The scope of the services provided are discussed and agreed upon at the
time the agreement is signed, and typically include some or all of the following:
• Retirement Plan Investment Services
o Advise the plan sponsors investment committee
o Preparation
of an Investment Policy Statement
o Investment recommendations
o Investment review and monitoring
o Education services to the plan committee
• Plan Participant Services
o Participant enrollment and education
o One-on-one participant meetings
o Development and communication of model portfolios
• Plan Design and Construction
o Plan design consulting
o Plan search coordination
o Vendor Search
o Provider review
Note that 401(k) Counseling Services are provided using the information and education exception
which does not constitute providing investment advice. As such, a separate agreement must be
obtained to document the services performed and the fee agreed. When engaged, these assets
are not included as assets under management.
Broker Dealer Affiliation Disclosure
CIA is affiliated with Cape Securities, Inc (“CSI”), American Global Wealth Management (“AGWM”)
and First Asset Financial, Inc. (“FAF”). It is common for a CIA representative to also serve as a
registered representative for CSI and/or AGWM. Some registered representatives have insurance
licenses and may recommend insurance products that pay commissions through these firms as
well.
Investment Advisory Affiliation Disclosure
CIA is affiliated with Global Investment Advisory. CIA investment advisory representatives do not
serve as investment advisory representatives for Global Investment Advisory at this time.
Third Party Asset Management
Advisor may recommend that clients engage certain Third-Party Asset Managers (“TPAM”) to
manage all or a portion of their assets. Advisors will provide individualized advisory services to their
clients through the selection of a suitable TPAM. Factors considered in the selection of a TPAM
include, but may not be limited to:
i) the management style, performance, reputation, pricing and reporting capabilities of the
TPAM;
ii) the client’s risk tolerance, goals and objectives, as well as investment experience; and,
iii) the amount of client assets available for investment. To assist clients in the selection of
a TPAM, the IAR will typically gather information from the client about the client’s
financial situation, investment objectives, and reasonable restrictions the client wants
imposed on the management of the account.
Advisor will review the client’s situation at least annually, or more often as needed or agreed upon
with each client, to review the client’s financial situation and objectives, communicate information
to the TPAM managing the account as warranted, and to assist the client in understanding and
evaluating the services provided by the TPAM. Clients will be expected to notify their Advisor of any
changes in their financial situation, investment objectives, risk tolerance, or account restrictions.
A complete description of the programs and services provided, the amount of total fees, the
payment structure, termination provisions and other aspects of each program are detailed and
disclosed in:
i) the TPAM’s Form ADV Part II;
ii) the program wrap brochure (if applicable) or other applicable disclosure document(s);
iii) the disclosure document(s) of the portfolio manager or managers selected; or,
iv) the TPAM’s account opening documents.
A copy of all relevant disclosure documents of the TPAM and the individual portfolio manager(s)
will be provided to anyone interested in these programs/managers. Programs include, but are not
limited to:
• 401k Generation
• Alphastar Capital Management
• American Funds
• AssetMark
• Armis Advisers
• Auour Advisory
• Beacon Capital
• Betterment
• BTS Management
• Cardea Capital
• CLS
• Envestnet
• Flexible Plan Investments
• James Alpha
• Morningstar
• Nationwide
• Jackson National
• Midland
• Security Benefit Life
• Protective Life
• Orion
• Pacific-Life
• Lincoln Financial
• SEI
• 55IP
Fees generally include:
i) Management and advisory fees shared by the TPAMs, CIA, and its IARs.
i) Transaction costs, if applicable, which may be paid to purchase and sell such
securities; and
iii) Custody fees
The amount and timing of these fees vary depending on the TPAM.
Wrap Fee Program
The client may elect to participate in a wrap fee account. The account will be managed similarly to
non-wrap fee accounts. The primary difference between a wrap account and non-wrap account is
in the manner that the account is billed to the client. In a wrap fee account, clients are billed one
inclusive fee that includes the cost of the advisor fee, portfolio management fee, platform fee, ticket
charges, some service fees, and postage and handling charges. In a non-wrap account, the
foregoing charges are assessed as separate charges. Please see the separate Wrap Fee Brochure
for more information.
Please Note: When investing in mutual funds and variable annuities, clients are strongly encouraged
to review the applicable prospectus. Mutual funds and variable annuities may impose additional fees
as well as certain restrictions on the frequency, timing and dollar amount of transactions and may
impose penalty fees based upon short-term trading patterns. Such restrictions may impact the
services provided by a TPAM.