PMS 2622 PMS 718 50% Blk PMS 390
CAAP Newsletter2016 Quarter 4
CAAP EducationCAAP Yardstick
CAAP At A Glance
IntroductionCAAP®1 continues to grow as we strive to provide a
first-class, state-of-the-art solution for you and your clients. We
continue to streamline processes and make enhancements to create a
positive overall experience for both you and your clients. Our goal
is to provide the best service and offer flexible options to manage
With this in mind, we are excited to announce the wait for
WealthPort® Unified Management Account (UMA) is over. The initial
rollout will allow you to diversify between multiple strategists
with similar objectives inside a single account with the same
registration type. We will offer trainings to explain all the
benefits associated with a UMA.
For more information on additional important CAAP announcements,
please see the What’s New section of this newsletter.
– The CAAP Team
What’s NewIntroducing the WealthPort Unified Managed Account
Cambridge is pleased to invite CAAP advisors to participate in the
next evolution of the WealthPort managed account experience.
WealthPort UMA can simplify client communications, reduce
paperwork, increase efficiency, and enhance the overall client
experience. Click here to learn how you can utilize the UMA to work
for you and your CAAP clients.
New Clearinghouse OptionsWe are pleased to announce new
clearinghouse options for three of our current strategists.
Beginning January 20, 2017, both NFS and Pershing will be available
for J.P. Morgan, Loring Ward, and Symmetry Partners. We received
many requests to open up the options for these strategists and we
CAAP Conversion Tax DocumentsCambridge completed the CAAP prefix
conversion for Pershing and NFS in 2016. As a result of this
conversion, clients will receive two sets of tax documents during
the 2017 tax season.
One set of tax documents will be for the activity (sales,
proceeds, dividends, etc.) that occurred prior to the conversion.
The other set of documents will be for the new account. Both sets
are valid and need to be submitted to clients’ tax advisors for
review. More information about the tax documents is below.
2016 Quarter 4 – CAAP Newsletter | 2
Pershing• 1099 mailing: Two separate tax documents will be
mailed mid-February. If enrolled in
eDelivery, the tax documents will be available online for the
new account only. Pershing will mail a hard copy of the tax
document for the old account.
• 1099R mailing: Two separate tax documents will be mailed the
last week of January. If enrolled in eDelivery, the tax documents
will be available online for the new account only. Pershing will
mail a hard copy of the tax document for the old account.
NFS• 1099 mailing: Two separate tax documents will be mailed
mid-February. If enrolled
in eDelivery for tax documents, both the new and old account
1099 will be available online only.
• 1099R mailing: Two separate tax documents will be mailed the
last week of January. If enrolled in eDelivery for tax documents,
both the new and old account 1099R will be available online
CAAP Annual RebalanceBeginning January 4, 2017, CAAP accounts
invested in Symmetry and Loring Ward models held at NFS and
Pershing will be reviewed against their assigned model to determine
if a position is significantly out of balance. CAAP accounts
invested in all other models will be rebalanced beginning February
CAAP 403(b)(7) Program DiscontinuingEffective January 31, 2017,
the 403(b)(7) and IRA programs at BMO Harris in CAAP will be
discontinued. Cambridge is no longer accepting new accounts.
Cambridge will no longer be providing investment management
options. Participant accounts that meet CAAP strategist account
minimums have the option of moving the account to NFS or Pershing.
Other options include selecting an investment option available from
the plan sponsor, taking a distribution, or keeping the account at
BMO. BMO has transition recordkeeping services to OneAmerica, BMO
continues to be the custodian. Rep-advisors will need to work
directly with OneAmerica for servicing the account if it remains at
Trade TicketsIn order to better serve our rep-advisors in a
timely and accurate fashion, we are moving to receiving trade
requests exclusively as Service Tickets. We realize it isn’t always
an option to submit a Service Ticket, for example, when you are out
of the office and receive a client call. In these emergency
situations, we will still process trades as best we can. However,
we are better able to respond to requests received via Service
2016 Quarter 4 – CAAP Newsletter | 3
Upcoming EventsMark your calendars for these events offered by
Cambridge and the CAAP Team! The details about these events can be
found on www.cir2.com>Education & Events>Events.
CAAP Camp (Invitation Only)New Orleans, LA I January 29-31,
2017 Ignite ConferenceDallas, TX I September 13-16, 2017
2016 Quarter 4 – CAAP Newsletter | 4
CAAPME Form SubmissionWhen you submit a CAAP Strategy Election
Form (CAAPME) to change the strategist or model on an existing CAAP
account, you do not need to submit the CAAPME Form for a 24
Principal to review and release. Submit the CAAPME Form under an
1800 trade key number. Then the form will bypass 24 Review and go
straight to CAAP Trading to process the trades.
The Institute for Wealth Management
Learn more about CAAP and the available strategists.
Visit our CAAP home page or CAAP Academy (log in via Cambridge
Knowledge Center). Your www.cir2.com login is required to access
Request a CAAP Training!
2016 Quarter 4 – CAAP Newsletter | 5
• J.P. Morgan had model updates on October 17, 2016. They have
increased their overweight to stocks versus bonds reflecting a
greater level of conviction in the cyclical environment. The paths
of the U.S. dollar, commodities, and the Fed lead them to believe
that the emerging markets rebound can extend further and within
equities they’ve increased their allocation to the Emerging Markets
Equity and Emerging Economies Funds. They believe carry remains
attractive and have increased their overweight to extended credit
markets through the High Yield Bond and Emerging Markets Debt (EMD)
Funds. Due to their preference for equities and credit they’ve used
the Core Bond Fund as a funding source for their reallocations and
have also further diversified their core fixed income exposure by
adding to Core Plus Bond Fund.
• Fund Evaluation Group, LLC (FEG) had model updates on October
19, 2016. The changes were made to the FEG Core and Equity
Portfolios. These changes were made in order to eliminate real
estate investment trusts (REITS) exposure within the portfolios due
to declining sentiment and valuation concerns in this asset
November 2016• Six new Vanguard models were added November 1,
2016. The Vanguard Core Series has broad-market equity
and investment-grade fixed income exposure with more than 19,000
global stocks and bonds. Diversified index investments that can
help alleviate active manager risk in portfolios through lower
return variability and low turnover. Low costs, with weighted
average expense ratios ranging from .08 percent to .10 percent.
» Account minimum: $5,000
» Program fee: 50 bps
» Service fee: $0
» Clearing: NFS and Pershing
• CAAP Quarterly Review began November 3, 2016. All CAAP
accounts were reviewed. Trades were generated if the account
positions had drifted outside a stated variance range. Symmetry
Partners, Loring Ward, and Litman Gregory do not participate in the
CAAP Quarterly Review.
• Horizon had model updates were implemented on November 9,
2016. Horizon is adding the First Trust Horizon ETFs to its Hybrid
Portfolio models. These ETFs will be used to enhance the
risk/return statistics of Horizon’s three types of models: Gain
(Allocation), Protect (Risk Assist), and Spend (Real Spend). The
ETFs will be most concentrated in the Protect and Spend models, as
the client in these models is typically in preservation mode.
Horizon is exchanging positions that have historically been more
volatile for an active lower volatility option. We believe that
clients will be benefited by enhanced risk/return characteristics.
In the Gain models, these ETFs make a smaller portion of the
overall compared to the Protect and Spend models to continue to
drive their risk-adjusted return mandate. Overall, the new
recommended portfolios will have a modest tilt to value style
investments and remain globally diversified.
2016 Quarter 4 – CAAP Newsletter | 6
2016 Quarter 4 – CAAP Newsletter | 7
• Morningstar had model updates for both their Retirement Income
Portfolios and Active/Passive Portfolios implemented on November
» They recently made a number of trades that impacted the
Retirement Income Portfolios. Overall, this reallocation reflects
their ongoing efforts to strengthen their global investment process
and help investors achieve better long-term investment results. As
part of this reallocation, they adjusted the portfolios’
positioning to put more capital to work in asset classes where they
see the most value and have the highest conviction, while also
assessing and confirming the portfolios’ ability to meet their
targeted withdrawal mandate based on their valuation-implied return
and risk forecasts. They have also made several changes to the
portfolios’ underlying holdings.
» As part of their ongoing asset allocation policy review, they
decided to take some steps to reduce risk in the fixed income
portion of a few portfolios. They are lowering the overall duration
and introducing more short-term credit exposure. Further, they are
reducing high-yield bond exposure and reallocating capital to bank
loans and investment-grade bonds. High-yield spreads have tightened
since their peak in mid-February. As a result, the reward for risk
of high-yield bonds has been reduced significantly. Bank loans have
experienced less price appreciation in the below investment-grade
space, and their valuations still look compelling. They believe
this warrants a shift in capital from high-yield bonds to bank
loans. The remaining reallocation to investment-grade bonds
reflects their desire to marginally de-risk their portfolio as they
are increasingly concerned about the elevated asset prices across
fixed income and stocks.
December 2016• J.P. Morgan had model updates that were
implemented on December 5, 2016. The U.S. remains their
regional exposure, supported by prospects for pro-cyclical
fiscal policy and higher rates benefiting the financial sector.
They shifted to an overweight position in domestic small cap
equity, funded by a reduction in their overweight to U.S. large cap
equity, to increase cyclical exposure. Within fixed income, a
modest overweight position to EMD is removed given the headwinds
that emerging markets may be faced with, such as a rising U.S.
dollar, higher U.S. interest rates and the potential for a
protectionism policy stance from the newly elected administration.
Proceeds from the reduction in EMD will be allocated to the Short
Duration Bond Fund in certain risk profiles to reduce overall
duration from the existing domestic fixed income exposure.
• Weatherstone Capital Management announced the merge of two
models on December 22, 2016. The Weatherstone Capital Management
Global Multi-asset model is being discontinued as an investment
option. Weatherstone Capital Management and Cambridge will continue
managing the Global Multi-asset model for clients through January
31, 2017. On February 1, 2017, any existing clients invested in the
model will be reallocated to the Balanced Growth model.
For more details on a specific strategist event, please see the
CAAP bulletins posted on www.cir2.com>Communications from
Communications from Cambridge - BulletinsBulletins, sent every
Thursday morning, are communications from the home office updating
you on important information from the following areas: CAAP,
Cambridge Source, CLIC®, Home Office, NFS, Pershing, Practice
Management, Product Services, Retirement Center, Trading, and
Wealth Planning Resources.
THE CAMBRIDGE ASSET ALLOCATION PLATFORM (CAAP) ALLOWS YOU ACCESS
TO THE BENEFITS OF ACCOUNTS MANAGED BY SOME OF THE WORLD’S LEADING
INVESTMENT PROFESSIONALS. USING A TIME-TESTED PROGRAM OF WEALTH
ACCUMULATION AND ASSET MANAGEMENT.
Need further assistance or want to share a suggestion?Contact
Barb Pilcher, Senior Director, Fiduciary Services
([email protected]) or Colleen Bell, First Vice President,
Fiduciary Services ([email protected]).
Need an unbiased opinion on a strategist?Contact Laura Papera,
Director of Fee-based Marketing ([email protected]) at
For questions about opening an account or to share your success
story, please contact the CAAP Team ([email protected]) at
For trade-related questions and requests, please contact CAAP
Trading ([email protected]) at 800-777-6080.
PMS 2622 PMS 718 50% Blk PMS 390
Cambridge Investment Research, Inc. | 1776 Pleasant Plain Road |
Fairfield, Iowa 52556 | www.cir2.com
1CAAP® is a registered mark of Cambridge Investment Research,
Inc. for its program for investment managers. Securities offered
through Cambridge Investment Research, Inc., a broker-dealer,
member FINRA/SIPC and Investment Advisory Services offered through
Cambridge Investment Research Advisors, Inc., a Registered
Investment Adviser. Both are wholly-owned subsidiaries of Cambridge
Investment Group, Inc. For financial professional use only