Towneley Capital Management, Inc. ("Towneley," "we," or "us") is an SEC-registered independent investment advisory firm. Wesley G. McCain, Founder and Chair Emeritus, founded Towneley in 1971.
Towneley operates as a Delaware corporation. Majority ownership of the company is with the TCM Employee Stock Ownership Trust.
We offer investment counseling, asset management, financial planning, business consulting and fiduciary services on a fee-only basis to individuals, high net worth individuals, trusts, estates, pension and profit sharing plans, nonprofit and charitable organizations, corporations and other business entities ("you" or "client"). We do not sell insurance, annuities or other commission-based financial products.
Approximately 90% of our business is providing investment supervisory services and portfolio review and reporting services as described in Item No. 13: Review of Accounts, below. Approximately 10% of our business is furnishing investment advice through consultation and providing financial planning and consulting services. We do not sponsor or participate in any wrap fee programs.
Investment Advisory Services to Individual Clients We tailor our advisory services to the individual needs of each client. We begin our investment advisory relationship by defining your goals and objectives. We become familiar with your investment history, tolerance for risk, time horizon, expected annual contributions and withdrawals and other important factors. We then recommend an asset allocation specifically suited to you.
Once we understand your individual needs and preferences, we use our proprietary models to construct your custom portfolio of no-load mutual funds and exchange traded funds. By carefully selecting a variety of domestic and international equity, fixed income, and specialty funds, we design a diversified portfolio aimed at furthering your goals with the least possible risk. For certain clients, we may also use individual bonds, including Treasury securities, in the fixed income segment of their portfolio.
When purchasing funds for your account, we may use cost averaging. By establishing equity and some fixed income positions over a period of months rather than all at once, we strive to achieve an average cost basis lower than the highest price paid. We will recommend a timetable for investing your portfolio based on the types of investments in your portfolio, our analysis of the markets and your preferences.
You may impose reasonable restrictions on the investments in your Towneley portfolio. For example, you may request that investments in a particular asset class, such as precious metals, be excluded from your portfolio and we will honor your request.
We require that our clients give us full discretion to instruct the custodian/broker-dealer to invest cash and to buy, sell and exchange securities in their accounts at any time. However, we never take physical possession of your funds or securities, nor do we have the authority to withdraw (with the exception of debiting fees) or transfer your funds without your express written consent. See Item No. 15: Custody, for more information about custody. We encourage you to keep us informed of any changes in work, family, health or other life circumstances that might warrant a reassessment of your investment goals or portfolio allocation. We offer you the opportunity to meet with us annually or more often if you request. These meetings provide an excellent opportunity for you to inform us of changes in your life or your business, and other matters of importance to you.
4 Investment Advisory Services to Charitable and Other Nonprofit Organizations We begin our investment advisory relationship by defining and quantifying your goals and objectives.
Our first step is to review your organization's investment policy statement. We work with your investment committee to help revise it, as appropriate. During this process, we talk with you to become familiar with your investment history, tolerance for risk, time horizon, possible projected annual cash flow and other important factors. We then recommend an asset allocation specifically suited to your institution. We manage your accounts in accordance with your investment policy statement. As your organization's needs and goals change and mature, we may recommend further revisions to your investment policies during our periodic meetings with the investment committee and/or board of directors.
Once we understand your organization's needs and preferences, we apply our expertise and proprietary models to construct a custom portfolio of no-load mutual funds, exchange traded funds or a combination of the two. We carefully select a variety of domestic and international equity, fixed income and specialty funds, while honoring any restrictions specified by your IPS. For certain clients, we may also use individual bonds, including Treasury securities, in the fixed income segment of their portfolio. The result is a portfolio aimed at furthering your goals with the least possible risk.
When purchasing funds for your account, we may use cost averaging. By establishing equity and some fixed income positions over a period of months rather than all at once, we strive to achieve an average cost basis lower than the highest price paid. We will recommend a timetable for investing your portfolio based on the types of investments in your portfolio, our analysis of the markets and your preferences.
You may impose reasonable restrictions on the investments in your Towneley portfolio. For example, you may request that investments in a particular asset class, such as precious metals, be excluded from your portfolio and we will honor your request.
We encourage you to keep us informed of any changes in your organization's circumstances that might warrant a reassessment of investment goals or objectives. We also schedule periodic client meetings, which provide an excellent opportunity for you to discuss with us any developments that may affect your asset allocation and the management of your portfolio.
The Fiduciary EdgeTM, our investment advisory

and consulting solution for nonprofit institutions, includes several value-added services that help nonprofit board and committee members to discharge prudently their fiduciary duties. Our solution for nonprofit institutions helps board and investment committee members maintain best practices as investment stewards in compliance with the Uniform Prudent Management of Institutional Funds Act. The Fiduciary EdgeTM program is included in Towneley's investment advisory fee for nonprofit institutions that are Towneley investment advisory clients, and may be offered on a stand-alone basis to other charitable nonprofit organizations for a flat or hourly fee.
Investment Management Services to Trusts We collaborate with corporate and individual trustees to provide discretionary investment management services to charitable and other types of trusts. In addition to managing the trust portfolio, we provide custom reporting and assist trustee with cash flow management and distribution processing.
Investment Advisory Services to Qualified Retirement Plan Sponsors Retirement plan consulting We provide retirement plan consulting services to employer plan sponsors on a one-time or ongoing basis. Generally, such retirement plan consulting services consist of assisting employer plan sponsors in establishing, monitoring and reviewing their company's participant-directed retirement plan. As the 5 needs of the plan sponsor dictate, areas of consulting could include investment options, plan structure and vendor search assistance. With respect to these services, we acknowledge in our Investment Advisory Agreement for Qualified Plans that we are a fiduciary within the meaning of Section 3(21) of ERISA.
Retirement plan asset management We provide retirement plan asset management services on an ongoing basis. Generally, such asset management services consist of selecting, monitoring, removing, and/or replacing the investment options under the plan, consistent with the objectives, written guidelines and/or investment objectives set forth in the written investment policy statement accepted and adopted by the client. As the needs of the plan sponsor dictate, areas of management could include plan investment options, asset allocation, plan structure, and vendor search assistance. With respect to these services, we acknowledge in our Investment Advisory Agreement for Qualified Plans that we are a fiduciary within the meaning of Section 3(38) of ERISA.
Financial Planning Services In addition to investment counseling and management, we offer financial planning services to our individual clients and prospective clients. Our services include: Pre-retirement planning We help you determine whether your current retirement goals are attainable or may need some adjustment, suggest how much you should accumulate to retire when and as you would like, and where you should be saving your money, e.g. in an IRA, 401(k) and/or a taxable account.
Post-retirement distribution planning When you are ready to retire, and periodically during your retirement years, we help you determine how much you can withdraw from your invested assets without outliving your money.
Spending and budget analysis We evaluate your income and expenditures and provide you with an analysis that includes our suggestions for reducing spending and increasing savings. Although we do not provide specific tax advice, our analysis may include suggestions that can help reduce your taxes. If appropriate, we can also evaluate your mortgage or other outstanding loans and help you determine if you might benefit from refinancing or from discharging those debts sooner than scheduled.
College cost analysis and planning We estimate how much you should save for future college expenses depending on which college you ask us to target, and other variables. We can also recommend the best type of account to hold your college savings and help you determine the appropriate asset allocation for that account.
Business consulting Under certain circumstances we may offer business and financial consulting services to small businesses. The services provided are tailored for specific client situations.
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, we are providing the following acknowledgment to you.
6 When we provide investment advice to you regarding your retirement plan account or individual retirement account, we are fiduciaries 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 we make money creates some conflicts with your interests, so we operate under a special rule that requires us to act in your best interest and not put our interest ahead of yours. Under this special rule's provisions, we must:
•Meet a professional standard of care when making investment recommendations (give prudent advice);
•Never put our financial interests ahead of yours 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 your best interest;
•Charge no more than is reasonable for our services; and
•Give you basic information about conflicts of interest. We benefit financially from the rollover of your assets from a retirement account to an account that we manage or provide investment advice, because the assets increase our assets under management and, in turn, our advisory fees. As a fiduciary, we only recommend a rollover when we believe it is in your best interest.
Assets under Management As of December 31, 2023, we provide continuous management services for $882,417,396 in client assets on a discretionary basis.