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Century Management Financial Advisors Review

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Century Management Financial Advisors

Century Management Financial Advisors

Originally starting out as Van Den Berg Management I, Century Management Financial Advisors (CM Financial Advisors) has been in business since 1974. It's lead by Arnold Van Den Berg, who is highly regarded in the investing world, appearing on several lists of top investors and in 2013 book, "The World's 99 Greatest Investors: The Secret of Success" by Magnus Angenfelt.

Van Den Berg is still at the helm of the firm, having been joined by his son Scott in 1993. Today, the Austin-based firm manages close to $856 million in assets, landing it a spot on SmartAsset's list of top Austin financial advisor firms. CM Financial Advisors also does business under the name CM Fund Advisors; its mutual funds are known as CM Advisors Family of Funds.

Century Management Financial Advisors Background

As just mentioned, the firm has been around since 1974, providing investment management and financial planning services for nearly half a century. The two Van Den Bergs and James Brilliant own the firm, while two other employees have small stakes. The senior Van Den Berg serves as CEO, co-chief investment officer and a portfolio manager, while the younger Van Den Berg is president and a portfolio manager. Brilliant is CFO, co-chief investment officer and a portfolio manager.

The firm’s team has an array of certifications. There are four chartered financial analysts (CFAs), four certified financial planners (CFPs), one chartered financial consultant (ChFC), one accredited investment fiduciary (AIF), one accredited wealth management advisor (AWMA) and one chartered mutual fund counselor (CMFC). The team has two different types of retirement-related certifications: one chartered retirement planning counselor (CRPC) and one chartered retirement plans specialist (CRPS). (Scott Van Den Berg is the holder of six of these designations.)

Century Management Financial Advisors Client Types and Minimum Account Sizes

CM Financial Advisors primarily serves individuals. Non-high-net-worth individuals make up the majority of the firm’s client base, while high-net-worth individuals account for just 12% of the firm’s individuals clients.

Instead of a minimum account size, CM Financial Advisors has a minimum annual fee of $2,500 for its portfolio management services. As a result, clients with less than $250,000 pay a higher fee rate than those with $250,000 or more. 

Services Offered by Century Management Financial Advisors

The practice offers discretionary portfolio management services through separate accounts and wrap fee portfolios. It also provides a comprehensive wealth plan or a focused wealth plan. The latter covers personalized cash flow-based planning, risk management palnning and Social Security analysis and optimization - plus provides access to a personal financial management website and a digital vault that uses 256-bit encryption to protect your data. There's also a financial planning offering that just optimizes your Social Security strategy to maximize your benefits.

Additionally, CM Fund Advisors serves as investment advisor and portfolio manager to the CM Advisors Family of Funds. These two funds correspond to Century Management Financial Advisors separate accounts, Small Cap Value Strategy and Fixed Income Strategy. 

Century Management Financial Advisors Investing Style

Century Management provides portfolio management on a discretionary basis. Its portfolio management services are available through separate portfolios, as well as through sub-advisory relationships with other investment firms and through a wrap-fee program sponsored by the registered investment advisor LPL Financial Corporation. Century Management manages equity and fixed income portfolios.

Since its founding in 1974, the firm has adhered to the strategy of value investing. Value investing is an active investing strategy that focuses on a stock's intrinsic value. Value investors search for companies that are undervalued and whose stocks are currently trading at a price lower than their intrinsic worth. Century Management says that it embraces volatility because this is when market inefficiencies become apparent.

As is the case with many financial advisor firms, Century Management believes in investing for the long term. The firm also uses a margin of safety and it takes a business approach to investing.

Notably, the firm says that each of its team members has invested at least a "substantial amount" of their investable assets in one or more of the firm's accounts or mutual fund strategies to ensure that the interests of the firm's employees are aligned with those of the firm's clients.

Century Management Financial Advisor Investing Strategies

Century Management offers four broad categories of investing strategies: value-based equity focused portfolios, balanced focused portfolios, fixed-income focused portfolios and other strategies.

The firm's value-based equity programs are geared toward younger investors. These portfolios are invested in equities, with the percentage of equities in the portfolios ranging from 50% to 90%. For investors who are nearing retirement, the firm recommends balanced focused income management. These portfolios are invested in equities from percentages ranging from 20% to 80%. The firm’s fixed-income portfolios primarily consist of U.S. corporate bonds and/or U.S. Treasury securities, while the “other strategies” category includes variations of the aforementioned categories.

There are multiple portfolio types available within each category, each of which uses a specific investing strategy. The available portfolio types include:

Value-Based Equity Focused Portfolios:

  1. CM Value I (All-Cap Value) strategy
  2. CM Value Focused strategy
  3. CM Value Plus strategy
  4. CM Large-Cap Absolute Value strategy
  5. CM Small-Cap Value strategy

Balanced Focused Portfolios:

  1. CM Moderate Plus Allocation strategy
  2. CM Moderate Allocation strategy 
  3. CM Conservative Allocation strategy

Fixed Income Focused Portfolios:

  1. CM Fixed-Income strategy

Other Strategies:

The firm’s “other strategies” category includes variations of the strategies listed under the above categories. These variations are available only to qualifying clients and are offered upon request. CM Financial Advisors says its variations may include things like using equity strategies in balanced focused strategies or permitting the use of certain cap-size limitations or municipal bonds.

 

Fees Under Century Management Financial Advisors

CM Financial Advisors charges asset-based fees for its general investment management services. Rates are based on total assets under management and may be negotiable. However, the firm usually bases its rates on the figures listed in table below. The firm has a minimum annual fee of $2,500.

CM Financial Advisors Investment Management Fees
Account Value Annual Fee
First $5 million 1.00%
Over $5 million 0.85%
Fixed income-only accounts 0.50%

 

*Estimated investment management fees do not include brokerage, custodial, third-party manager or other fees, which can vary in amount.
Estimated Investment Management Fees (for Non-Fixed Income Accounts) at CM Financial Advisors*
Yours Assets CM Financial Advisors Annual Fee Amount
$250K $2,500
$500K $5,000
$1 MM $10,000
$5 MM $50,000
$10 MM $92,500


These portfolio management fees are comparable to the industry average of 0.95%, according to a 2018 study of 1,500 firms by RIA in a Box. Learn more about advisors' typical costs here

Century Management charges different rates for its wealth plans. For its Comprehensive Wealth Plan, the firm charges $1,000 for each $1 million of total assets. The fee can range from a minimum of $2,500 to a maximum of $5,000. Century Management also offers the Focused Wealth Plan, which is designed for clients who don't need a Comprehensive Wealth Plan. The fee for this plan is $1,500. For its Social Security Optimization Plan, the firm charges a $500 fee. 

In addition to the above services, Century Management's parent company manages two mutual funds. The firm charges the following management fees for these funds:

  • CM Advisors Fixed-Income Fund: 0.50% management fee on all assets
  • CM Advisors Small-Cap Value Fund: 1.00% management fee on all assets

Century Management will not charge clients a separate account management fee if the client holds a mutual fund from the CM Advisors family of funds that is managed by one of the firm's advisors.

Awards and Recognition

 

Financial Times named Century Management to its 2017 list of the top 300 registered investment advisors in the U.S. In 2013,  Chairman and CEO Arnold Van Den Berg was featured in the book, “The World's 99 Greatest Investors.”

What to Watch Out for 

CM Financial Advisors does not have any disclosures of legal or disciplinary issues in its latest SEC filings.

One thing to be aware of, though, is that it may recommend its mutual funds to clients, which can create a potential conflict of interest. However, clients are under no obligation to invest in any of the firm's funds. Furthermore, the firm is bound by its fiduciary duty, which means it’s required to act in clients’ best interests at all times. 

 

Opening an Account With Century Management

You can call the firm at (512) 329-0050 or submit your contact information and a message on the firm's website. CM Financial Advisors accepts clients from all states. If you go in, in person, the office is located in west Austin near Westlake Oaks, off of Loop 360.

All information is accurate as of the writing of this article.

 

 

Tips for Financial Planning

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  • Investing with a goal in mind is often confusing. It can be tough to know how much to invest in order to meet your goals. Use SmartAsset’s investment calculator to help you reach your goals. Know how much you’re starting with, how fast you want to grow, and how long you want to invest, and the calculator will have you well on your way to reaching your financial goals.

How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research