Cambridge Investment Research Advisors, Inc.
Headquartered in Fairfield, Iowa, Cambridge Investment Research Advisors, Inc. (CIRA) oversees more than $82 billion in client assets. The firm's client base is dominated by non-high-net-worth individuals.
CIRA has advisors located all across the country. However, its advisor representatives are not actually employees. Instead, they are independent contractors that offer services through CIRA. Most advisor representatives are also registered representatives of its broker-dealer affiliate and many are insurance agents as well.
Cambridge Investment Research Advisors Background
Cambridge Investment Resinvestment Advisors is the brother to broker-dealer Cambridge Investment Research, Inc., both of which are under parent company Cambridge Investment Group, Inc.
In an effort to splinter its investment advisory business from its broker-dealer business, parent company Cambridge created Cambridge Investment Research Advisors in 2005. The Schwartz Family Trust is the majority owner of Cambridge, which can trace its history all the way back to 1981 when chairman and CEO Eric Schwartz founded the firm.
Cambridge Investment Research Advisors Client Types and Account Minimums
Cambridge Investment Research Advisors’ account requirements vary by program. On the low end, its wrap fee WealthPort Program requires only $5,000, though higher minimums may apply for different strategies within the program. For other accounts, the minimum is typically $25,000. But, again, particular advisor representatives may require different amounts.
Given the relatively low minimums at CIRA, it’s no surprise that the great majority of its over 260,000 clients are individuals with less than a high net worth. The company does work with affluent individuals too, in addition to state and municipal government entities, pension and profit-sharing plans and charitable organizations.
Services Offered by Cambridge Investment Research Advisors
CIRA provides financial planning and consulting services. It also offers investment management, either on a discretionary or non-discretionary basis. It also sponsors and manages a wrap fee program for discretionary accounts. Additionally, CIRA advisor representatives may recommend third-party money managers.
The firm’s corporate clients may hire advisor reps to provide financial wellness consulting to their employees. CIRA also offers retirement plan and consulting services for company benefit plans.
Cambridge Investment Research Advisors Investment Philosophy
Advisor representatives at Cambridge Investment Research Advisors may have specializations, which often leads to each advisor utilizing their own specific strategies and methods of analysis. Generally, they are able to offer guidance on most kinds of investments, with the exception of futures and commodity contracts. Regarding outside money managers, CIRA requires that its advisor reps only recommend those approved by CIRA and its parent company.
Fees Under Cambridge Investment Research Advisors
Cambridge Investment Research Advisors' fees for financial planning and consulting can be on a fixed-fee basis, in which case fees do not generally exceed $25,000 for individuals, or on an hourly basis of up to $500 per hour. Alternately, they can be based on a percentage of the client's assets under management. In some cases, the advisor rep may waive fees when you buy certain financial products.
For investment management services, CIRA offers eight platforms, which all carry different fee schedules:
- Cambridge Managed Account Platform (CMAP)
- Flexible Managed Account Platform (FlexMAP)
- WealthPort Wrap
- CIRA Retirement Plan Strategies Management Platform
- Retirement Plan Advisory and Consulting Services
- Recommendation of unaffiliated third-party investment advisers
- Annuity management
Investment management fees can be flat-rate or based on a tiered or breakpoint fee structure. When following a tiered schedule, the fee generally starts at 1.50% of client assets under management (AUM) for the first $100,000, drops down to 1.25% for the next $150,000 and 1% for any funds above $250,000. When following a breakpoint schedule, accounts with up to $100,000 are charged 1.50%. Accounts with between $100,000 and $250,000 are charged 1.25%, while accounts with more than $250,000 in assets are charged a 1% fee. Accounts are also responsible for setup fees, ancillary fees, service fees and any underlying mutual fund or exchange-traded fund (ETF) fees.
Within the firm’s wrap fee program, called WealthPort, there are four programs that carry different maximum advisory fees, ranging from 2.15% to 2.25% of AUM.
What to Watch Out For
CIRA reported 16 disciplinary actions in its most recent filings with the U.S. Securities and Exchange Commission (SEC). These involved both affiliated individuals or affiliated companies, in addition to the firm itself.
Of the two actions involving CIRA itself, both were self-reported violations of regulations. In one of the cases, which allegedly involved the misappropriation of financial planning fees by a former investment advisor representative, CIRA agreed to pay a $225,000 fine. Meanwhile, in another case regarding a potential breach of fiduciary duty relating to mutual fund shares, CIRA agreed to pay a disgorgement of $5,645,106 and prejudgment interest of $542,456.54.
As noted earlier, most advisor reps at Cambridge Investment Research Advisors can also sell securities and insurance products. This can pose a potential conflict of interest when they are recommending products that they also earn commissions on. When offered investment recommendations, clients should ask why the rep is recommending them over other similar products and whether the rep will earn a commission. Despite the potential conflict of interest that may arise from this arrangement, the firm and its advisory reps are required to act in clients' best interests due to their fiduciary duty.
Opening an Account With Cambridge Investment Research Advisors
To become a client of CIRA, try calling the firm at (800) 777-6080. The firm's website also features a tool that shows you where its advisors are located throughout the country.
All information was accurate as of the writing of this article.
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