CORNERSTONE INDEPENDENT ASSET MANAGEMENT
Insight. Influence. Integrity.
The Cornerstone Experience
WELCOME KIT cornerstone-companies.com
INTRODUCTION
Welcome to Cornerstone
Our Message. We are Cornerstone, one of the nation’s leading independent investment consulting firms. We are committed to building and preserving the assets of institutions and wealthy families, now and into the future. Our success is rooted in navigating complex financial decisions on behalf of our clients, and our mission is right in our tagline: Insight. Influence. Integrity.
Thomas J. Scalici
Co-founder and Chief Executive Officer
You need honest financial advice from a dedicated consulting team. You also expect highly customized and responsive service — this is where Cornerstone excels. Beyond expertise in managing assets, our team prides itself on providing outstanding client service that is as anticipatory as possible. Our numbers speak for themselves. Cornerstone is our life’s work — an ongoing process of developing great talent to best serve you. Like the needs of our diverse clientele, our capabilities are everincreasing. The constant is our culture of providing leadership in a complex financial marketplace. In our business, there are distinctions between legal requirements and best practices.
Tom Scalici
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INTRODUCTION
History of Cornerstone Cornerstone, with roots going back over 30 years, was founded on the same “client-first” philosophy that guides us today. Our initial clients were successful entrepreneurs who understood their businesses but did not fully comprehend the risks and rewards of financial markets. By partnering with an independent firm that managed a prudent process instead of selling investment product, their wealth could be managed more effectively.
in the best interest of our clients. — Cornerstone works with hundreds of service providers, custodians, vendors and money managers on behalf of our clients. We are constantly negotiating with them on a plethora of issues including problem solving, service disputes, contract language, error correction, pricing concessions, underwriting and product access. The ability to enhance our clients’ experience is at the essence of influence.
As these private clients evolved into leaders of their communities, they came to appreciate that the hospitals, centers for higher education, faith-based organizations, and other not-for-profit corporations they served would also benefit from a partnership with Cornerstone.
We provide you specific guidance, not generic recommendations — When you retain an advisor, you expect customized, sound solutions. With hundreds of years of industry experience across the team, Cornerstone provides just that. Once we understand your situation, we design a portfolio that fits your needs.
From the firm’s inception, Tom Scalici and Skip Cowen realized there was a void in the investment business in providing fiduciary insulation and open architecture solutions. We were an early adopter of taking discretion (day-to-day management) and assuming fiduciary responsibility (legal authority) for our clients. We have the ability to get interested parties to make the decisions we want them to make
Over $6.1 BILLION in assets under management
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We are always following, but are not necessarily followers of, new market trends — You may hear about a hot new idea. Some of them are good, and some of them are not. Cornerstone is responsible for evaluating and implementing those that make sense for you. We are also accountable to steer you away from those that do not.
97% CLIENT RETENTION rate
(610) 694 0900
30+ YEARS of experience
INTRODUCTION
The Cornerstone team Welcome on board. This is an overview of some of the key processes and practices we follow at Cornerstone in regards to your individual investments. Our experience allows us to apply our investment process — designing investment policies, implementing cost-effective portfolios, and rigorously monitoring portfolios — to any situation. Our solutions are completely open architecture, meaning we aim to hire the optimal service providers based on your circumstances. At Cornerstone, you are surrounded by a team of experts who are here to support the various needs of your business. Below is an outline of the Cornerstone support structure available to you. In addition to this team, you have access to your own portal as well, 24/7. Please sign up at cornerstone-companies.com/portal if you haven’t done so already!
Client Service Partner
Implementation Manager
Your dedicated Client Service Partner is here to support your everyday requests, and can be reached by phone or email. When your CSP is out of the office, a dedicated back-up team will be monitoring the inbox during business hours and may also be reached by the live-person support function in your portal. The Domain Team Leader can be reached daily for escalations.
At the initial phase of our relationship, you will be guided by an Implementation Manager who will oversee your on-boarding to our systems, introduce you to key contacts, and ensure that your portfolio is set up correctly. The implementation manager will inform you of the key processes we follow at Cornerstone, and answer specific questions regarding your initial services, such as a designating assets.
Strategic Account Manager
Portfolio Manager
The Strategic Account Manager is responsible for your account overall, and is here to provide support regarding your investments, including strategic account advice, such as recommendations regarding assets and portfolio building. In addition, you have access to a Reports Consultant to further offer support and advice around the Cornerstone services.
For any portfolio changes, such as an initial decisions and investments, you will be supported by our Portfolio Team consisting of a Portfolio Manager and Portfolio Coordinators. The team leader is available for escalations if needed.
INTRODUCTION
Your Cornerstone portal Cornerstone portfolio and file sharing portals are accessible 24/7 from any device. Your Cornerstone portal is a confidential tool you can you individually or authorize others to use along with you. An authorized user is someone who has been set up in the system with access to the Cornerstone Management portal. As part of the on-boarding, we will request information about who should be set up on the system. There are various access levels that determine which actions a user can take while working in the system. For the security of your intellectual property, Cornerstone ensures that new orders and requests relating to investments in your account are coming from an authorized contact with the proper access before we take any action. Please let your CSP know if there are any changes required to your current account and user structure. For support or portal access questions please contact us at: sitesubmission@cornerstone-companies.com
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Visit
Add
Visit cornerstone-companies.com/login to login to your Tamarac® portfolio portal
Add to your investment portfolio by clicking the plus button to the right of your existing portfolio list – any additions will be approved before finalized. Authorized account users will be notified if any additional investments are added in this portal.
Access Click Portal Access, this will take you to our external portal site
Login Type in your email address and password you created with your CSP
Navigate Some basic features you will be using often are as follows
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(610) 694 0900
Update Update any personal information that your Cornerstone team may need to know by clicking the figure icon at the top left of your portal screen. An email will be sent to the email on file if any personal information changes are made.
Contact Get in touch with any member of your team to discuss portfolio updates by clicking the headset icon directly under the figure icon to the left of your screen.
INFORMATION
Cornerstone Cares
Cornerstone worked with the family to consolidate the number of accounts and created transparency around the family’s investment and operational risks
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through upgraded reporting. Cornerstone has long prided itself on its ability to gather, analyze, and aggregate and disaggregate assets in a custodianagnostic manner. Our technology allowed us to consolidate these assets such that the client could dictate who had access to each account or account group. We now monitor the performance and risk metrics of the family’s entire wealth and any of its subcomponents. Even those assets managed outside our firm are brought into our reporting sphere to provide a comprehensive daily snapshot for individual stakeholders. Prior to engaging Cornerstone, the extraordinary level of liquid assets that had been “squirreled away” in various investment houses and vehicles posed significant key man risk. Cornerstone’s consolidation services, along with a thorough review of the family’s existing insurance policies, enabled the family to focus on running its operating business while relying on Cornerstone to manage and report on their liquid net worth. In addition, the family and their various advisors are able to access the documents they need at any time, allowing for seamless integration between their financial, legal, and tax advisors.
CORNERSTONE CARES is a mission we implemented naturally throughout our process of helping people every day. We found it easy to create this team within the company that can solely focus on bringing in new clients that may not originally come to us for help. – Brian D. Bobeck, Cornerstone Cares Chair
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Managing assets for families of extreme wealth comes with unique hurdles, including tax issues, asset location (where to most efficiently invest assets between taxable, tax deferred, and taxexempt accounts), and asset ownership among various generations and legal structures. However, one of the greatest challenges is providing flexible yet comprehensive reporting to the parties of interest. One such family had many accounts in many different places, legal and tax advisors requiring different levels of document access, and various fiduciaries for each account. The family’s greatest concern was maintaining an appropriate management strategy in each account and a central repository for documents. On top of these needs, the patriarch of the family invested smaller pools of assets in private equity outside Cornerstone’s scope of management. The family and its advisors were concerned about “key man risk,” or the risk they could not efficiently manage their wealth should the patriarch unexpectedly pass away.
INFORMATION
ESOP ownership
Employee Stock Ownership Plans (“ESOPs”) allow employees to share in the value of their company. These programs can be excellent ways to attract and retain employees and maintain a firm’s independence over multiple generations. One challenge facing ESOP companies is that as employees separate from employment, the company must have cash on hand to repurchase the shares those employees have accumulated. Cornerstone has worked with ESOP companies for almost a decade and a half and has found that while each one is thoughtful in allocating shares to encourage an ownership mentality, many do not have the financial acumen to properly fund the repurchase obligations they all eventually face. One recent example we encountered was a partial ESOP company that had about $100 million of liabilities coming due over the next two decades and only $10 million of assets set aside. The assets they had were not allocated optimally for a cyclical company where year-to-year cash flows could not be relied upon to fund their needs. Our team began cornerstone-companies.com
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working on the funding strategy for this client by creating transparency around the existing assets earmarked for liability funding. This asset/liability work included calculating a normal cost, or annual budget, that the company would set aside to pay future liabilities. Another part of this analysis involved discussing the liquidity – or lack thereof – of the current assets in the fund. The prior strategy involved funding long-term insurance contracts and relied on cash flow and debt to fund near term liabilities. By analyzing the company’s operating results, cash flow, and repurchase obligation study, Cornerstone developed a strategy which involved more efficiently utilizing corporate-owned life insurance. This enhancement freed up cash for investment into traditional investments to bolster the company’s ability to pay its obligation without adding to its operating debt. Once the initial transition was completed, we established an ongoing monitoring process to measure progress against our initial assumptions.
INFORMATION
Awards and recognition For the third straight year, Cornerstone Advisors Asset Management, LLC is proud to be named a Best Place to Work in Money Management by Pensions & Investments. The award comes from the Pensions & Investments’ eighth annual survey and recognition program, which is dedicated to identifying and recognizing the best employers in the money management industry. “Leadership, management and creativity have to be the differentiators,” said Thomas Scalici, Cornerstone’s chief executive officer. “We offer the unique ability for each person to create good results and bring passion to what they do.” The company’s employees agree. Pensions & Investments partnered with Best Companies Group, an independent research firm specializing in identifying great places to work, to conduct a two-part survey of employers and their employees. The first part, worth 25 percent of the total score, consisted of evaluating each nominated company’s workplace policies, practices, philosophy, systems, and demographics. The second part, worth 75 percent of the total evaluation, involved an employee survey designed to measure employee experience. For a complete list of the 2016 Pensions & Investments Best Places to Work in Money Management winners and write-ups, go to https://www. pionline.com/specialreports/best-places-to-work/20181210.
Named by Pensions & Investments as one of the world’s largest OCIOs, ranking #51 for 2019
Ranked 43rd on Barron’s 2020 Top 50 institutional consulting teams list
Awarded Best Places
to Work in Money Management by
Pensions & Investments since 2016
Ranked #40 in Financial Advisor Magazine’s 2019 Annual RIA Ranking
NAPA Top DC
Advisor Teams for 2019
Insight. Influence. Integrity.
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