Founded by attorneys in 2009, Cabana Asset Management has recently taken off, being named one of the fastest growing private companies or registered investment advisors (RIAs) in 2020 by publications such as Inc. and Financial Advisor. With over a billion in assets under management, the firm is also ranked No. 1 on SmartAsset's top financial advisor lists for both Fayetteville, where the firm is headquartered, and Arkansas.
The fee-based firm also has an office in Plano, Texas. It developed its prioprietary Cyclical Asset Reallocation Algorithm (CARA), which seeks to reduce volatility and exposure to down markets.
Cabana Asset Management Background
Co-founder Chad Mason trained to be a lawyer, but became especially interested in investing when his family lost an inheritance during the recession of the early 2000s. Several years later, he and Louis Shaff, a friend from law school, decided to start a venture, and while their families were on vacation together, chose Cabana as their firm name. Today, the RIA is a wholly owned subsidiary of The Cabana Group, LLC, which in turn is owned by CI Financial, Inc.
Mason serves as CEO, while Shaff is the firm's CFO. They lead a team that includes two certified public accountants (CPAs) and five lawyers.
Cabana Asset Management Client Types and Minimum Account Sizes
Cabana Asset Management works with individuals, pension and profit-sharing plan participants, trustees for collective investment trusts or collective investment funds, trusts, estates, charitable organizations, corporations, private investment funds, exchange-traded funds (ETFs), other investment advisors and other business entities.
The firm does not have a set account minimum.
Services Offered by Cabana Asset Management
Cabana Asset Management mainly builds separately managed accounts (SMAs) for its clients. It generally allocates client assets into its proprietary Target Drawdown Portfolios.
These portfolios are designed to anticipate, avoid or minimize loss while taking advantage of upmarkets. When the firm initiates the investment process, it identifies a “target drawdown percentage” that can span from 5% to 20%. Its CARA solution, which aims to identify assets that are particularly attractive in a given business cycle, allows investors to “remain fully invested at all times, set expectations for loss and actively participate in favorable market conditions.” Income and tax-efficient solutions are also available.
The firm’s advisors can also offer guidance on specific financial goals you may want to achieve. They can provide advice on:
- Cash flow analysis
- Retirement analysis
- Insurance analysis
- Portfolio analysis and investment planning
- Education savings analysis
- Estate analysis
Additionally, Cabana Asset provides portfolio management services for sub-advisory and model clients and retirement plan services. It also sponsors a private fund that's generally available only to high-net-worth and institutional investors and serves as advisor to Cabana’s Investor Cash Management Program.
Cabana Asset Management Investing Philosophy
Cabana Asset Management’s investment philosophy generally involves engaging in methods that can allow investors to take advantage of market returns while anticipating and mitigating risk.
It places clients in a Target Drawdown Portfolio based on the client's risk tolerance and investment goals. When selecting securities to build these portfolios with, the firm may engage in one or more of the following analytical methods:
- Fundamental analysis - determines a security’s true value by assessing the company’s financial strength and potential for stability and growth
- Technical analysis - projects short-term price movements based on historical patterns
- Economic analysis - involves studying several economic factors such as money supply, interest rates, earnings and changes in gross domestic product (GDP)
Fees Under Cabana Asset Management
For portfolio management services, Cabana Asset Management charges fees in the form of a percentage of assets under management (AUM). Unfortunately, the firm doesn’t publish its fee schedule, so we can’t provide it here. However, the firm states in its brochure that its maximum portfolio management fee is 2% of assets under management.
For financial planning services, Cabana Asset Management charges fees on a fixed or hourly basis:
- Fixed fees - $500 to $5,000 for broad-based planning services. The client would be notified in circumstances where the fee would exceed $5,000.
- Hourly fees - These fees range from $150 to $300 for specific services. They does not apply to clients who want a broad-based financial plan.
What to Watch Out for
Cabana Asset Management has no disclosures of legal or disclipinary action on its Form ADV.
One thing to be aware of, though, is that through common ownership, Cabana Asset Management is affiliated with other financial services firms. Among them is Cabana Financial LLC, an insurance agency. As a result, some Cabana Asset Management advisors may be incentivized to sell or recommend certain insurance products to earn a commission. To mitigate the potential for such conflicts, Cabana Asset Management has established a code of ethics. It dictates that all associated persons must uphold the following rules:
- Deal fairly with all clients when making investment decisions
- Uphold their fiduciary duty at all times
- Put the client's interest first
Opening an Account With Cabana Asset Management
To contact the firm, submit your email and phone number on the Cabana Asset's website.
All information was accurate as of the writing of this article.
Tips for Finding the Right Financial Advisor
- Talk to at least three advisors before choosing one. This should give you a basic sense of investment strategies, advisor fees and more. To help you find advisors who may be right for you, use SmartAsset’s pro matching tool. It recommends up to three financial advisors in your area.
- Ask candidates for their professional certifications do you have. You don’t actually need to have any training to be a financial advisor. So those who have professional credentials will have that much more preparation - and probably a speciality. For more questions to ask a financial advisor, check out this article.
