Integrated Capital Management, Inc. is an SEC-registered investment adviser based in Jessup,
Pennsylvania. We are organized as a corporation under the laws of the Commonwealth of
Pennsylvania. We have been providing investment advisory services since 2009. Joseph Perfilio
and Michael Paciotti are our principal owners.
As used in this brochure, the words "we", "our" and "us" refer to Integrated Capital Management, Inc.
and the words "you", "your" and "client" refer to you as a client or prospective client of our firm. Also,
you may see the term Associated Person in throughout this brochure. Our Associated Persons are our
firm's officers, employees, and all individuals providing investment advice on behalf of our firm.
We offer portfolio management services through a wrap-fee program ("Program") as described in this
wrap fee program brochure to prospective and existing clients. We are the sponsor and portfolio
manager for the Program. Generally, a wrap-fee program is a type of investment program that provides
clients with asset management and brokerage services for one all-inclusive fee. Prior to becoming a
client under the Program, you will be required to enter into a separate written agreement with us that
sets forth the terms and conditions of the engagement and describes the scope of the services to be
provided, and the fees to be paid.
Client Investment Process
Through our investment management programs, we bring a new perspective to money management
by providing the services of an outsourced investment department to institutional investors, broker
dealers, registered investment advisers, financial advisors and their clients. This perspective is deeply
rooted in our experiences as practicing investment advisors and our connection to the institutional
investment community.
Multi-billion-dollar investors have always had substantial advantages in the investment marketplace.
We use our collective purchasing power, independence, objectivity and professionalism to deliver
those same advantages to investors and advisors who choose not to assume the cost of a fully staffed
investment department. By bringing the research-intensive focus of one of the nation's largest
institutional plan sponsors combined with the scalability of the Turnkey Asset Management Program
structure our mission is to provide Clients with investment solutions seen in the institutional investment
community.
Our series of proprietary investment solutions are offered through managed money and private label
programs using registered products such as mutual funds and exchange traded funds. Philosophically,
we believe that while investor emotions influence prices and performance in the short run, in the long
run valuations rule the day. By following a contrarian valuation oriented approach we attempt to add
value through a series of quantitative investment models. By overweighting those opportunities that are
inexpensive and underweighting those that are expensive, we believe that investors can reduce risk
and enhance return over the course of a full market cycle. We have created a set of globally diversified
investment solutions designed to address the ever-changing needs of today's markets.
iCM’s turnkey strategies include, but are not limited to the following:
iCM Tactical - Standard Models consist of ten investor profiles ranging from very
conservative to more aggressive equity only models for qualified investors and/or investors that are
less sensitive to taxes. Investments decisions are made via our contrarian valuation driven approach
where we seek to overweight inexpensive opportunities and underweight those that are expensive.
Investments are limited to registered products only and can include both active and passive
investments.
iCM Tactical - Standard with Alternatives Models consist of ten investor profiles ranging from very
conservative to more aggressive equity only models for qualified investors and/or investors that are
less sensitive to taxes. Investments decisions are made via our contrarian valuation driven approach
where we seek to overweight inexpensive opportunities and underweight those that are expensive.
Investments are limited to registered products only and can include both active and passive
investments. Unlike the “Standard” models the “Standard with Alternatives” models have the flexibility
to invest in liquid alternatives.
iCM Tactical - Tax Sensitive Models consist of ten investor profiles ranging from very conservative to
more aggressive equity only models and are typically for non-qualified investors and/or investors that
are more sensitive to taxes. Investments decisions are made via our contrarian valuation driven
approach where we seek to overweight inexpensive opportunities and underweight those that are
expensive. Investments are limited to registered products only and can include both active and passive
investments. While taxes are a consideration, they are not our first consideration.
iCM Tactical - ETF Models consist of ten investor profiles ranging from very conservative to more
aggressive equity only models for investors preferring an ETF based solution. While
implementation is done via ETFs the program is not passive. Investments decisions are made
via our contrarian valuation driven approach where we seek to overweight inexpensive opportunities
and underweight those that are expensive. Investments are limited to registered products only and can
include only ETFs.
iCM Tactical ESG Models consist of five investor profiles ranging from very conservative to more
aggressive models for investors seeking a socially responsible investment solution. Investments
decisions are made via our contrarian valuation driven approach where we seek to overweight
inexpensive opportunities and underweight those that are expensive. Investments are limited to
registered products with a socially conscious or ESG-focused investment strategy, and can include
both active and passive investments.
iCM Tactical Income Closed-End Fund (TICE) portfolio is an actively managed
closed-end fund (CEF) trading strategy that is allocated approximately 60% fixed income and 40%
equity. Our goal is to construct a portfolio with market-like characteristics, but acquire it for a
reasonable discount. We use proprietary research techniques, specifically quantitative models, to
analyze and identify CEFs that are trading at statistically significant discounts to their NAVs. When
combined with a thoughtful asset class valuation approach, we believe that we can provide a well-
diversified portfolio with attractive yield characteristics and risk-adjusted returns over a long-term time
horizon.
iCM Strategic Beta Models are a suite of five strategies ranging from 10% equity/90% fixed income
to 80% equity/20% fixed income and utilize a long-term strategic asset allocation framework. Each
portfolio's equity allocation aims to provide global market exposure that has been proven through
academic research to outperform over long term investment horizons; value, size & profitability. The
Strategic Beta portfolios gain exposure to these factors via ETFs, which are sub-advised by
Dimensional Fund Advisors (DFA). The portfolios' fixed income allocation also aims to align with the
DFA framework, passively targeting term and quality factors that have been shown to produce
attractive risk-adjusted returns over the long-term.
iCM TICE Alpha Opportunities (TAO) Models consist of five investor profiles ranging from moderately
conservative to more aggressive. TAO combines the asset class valuation driven approach utilized by
iCM’s Tactical portfolios with the discount closed end fund strategy utilized by the Tactical Income
Closed End (TICE) portfolio. TAO looks to overcome the challenges currently faced by traditional
portfolio management by increasing return potential by focusing on attractively valued assets, adding
incremental return via closed end fund premium/discount alpha, and enhancing yield characteristics by
purchasing discounted closed end funds. Investments are limited to registered products only and can
include only closed end funds (CEFs), ETFs, and mutual funds.
Investment Management Services
We offer discretionary portfolio management services where our investment advice is tailored to meet
our clients’ needs and investment objectives. If you retain our firm for portfolio management services,
we will meet with you to determine your investment objectives, risk tolerance, and other relevant
information at the beginning of our advisory relationship. We will use the information we gather to
develop an investment strategy that enables our firm to give you continuous and focused investment
advice and/or to make investments on your behalf in accordance with your risk profile and investing
objectives.
We also offer discretionary portfolio management services to clients as part of a tri-party arrangement
with our firm, the Client, and the Client's appointed financial advisor (hereinafter "Client Adviser"). With
these arrangements the Client Adviser will be responsible for collecting initial and ongoing Client
personal and financial information, and will be responsible for immediately communicating relevant
information to our firm. Like our firm, the Client Adviser serves as a fiduciary to you and must act in
your best interest. As part of the Client Adviser’s responsibilities, he/she will select the investment
strategy for your account(s). Additionally, the Client Adviser will determine whether your managed
accounts are placed in a wrap fee program or a non-wrap fee program. You should discuss your
investment objectives, the selected investment strategy and how your account will be managed,
whether a wrap or non-wrap fee program is best for you, among any other investment suitability
questions with your Client Adviser.
As part of our portfolio management services we will invest your assets in one or more proprietary
investment model strategies (noted above under Investment Management Programs). We will monitor
your portfolio’s performance on an ongoing basis, and will rebalance the portfolio as required by
changes in market conditions and/or in your financial circumstances. Where appropriate we may also
assist you with you establishing an account for purposes of holding certain securities.
If you engage us for discretionary portfolio management services, we require you to grant our firm
discretionary authority to manage your account. Discretionary authorization will allow our firm to effect
purchases, sales, exchanges, re-balance, reallocation, and other transactions with respect to the
managed assets in your account(s). Discretionary authority is typically granted by the investment
advisory agreement you sign with our firm and/or through trading authorization forms.
Changes in Your Financial Circumstances
In providing the contracted services, we are not required to verify any information we receive from you
or from your other professionals (e.g., attorney, accountant, etc.) and we are expressly authorized to
rely on the information you provide and will manage your account in accordance with your designated
investment objectives. It is responsibility to promptly notify us if there are ever any changes in your
financial situation or investment objectives for the purpose of reviewing/evaluating/revising our
previous recommendations and/or services.
The Program Fee
Our annual fee for wrapped investment management services is based on the market value of your
assets under management and is calculated as follows:
Assets Under Management Maximum Annual Advisory Fee*
$0 - $500,000 2.00%
$500,001 - $1,000,000 1.75%
$1,000,001 - $3,000,000 1.50%
$3,000,001 - $5,000,000 1.25%
Over $5,000,000 Negotiable
*Maximum annual advisory fee includes our management fee, and the Client Adviser (if applicable).
Our management fee is billed and payable quarterly
in advance based on the value of your account on
the last day of the previous calendar quarter. The first quarter's fees will be calculated on a pro rata
basis based on the initial value of your portfolio, which means the advisory fee is payable in proportion
to the number of days in the quarter for which you are a client. Fees are negotiable, depending on
individual client circumstances. Increases in the annual fee are only effective upon your receipt of prior
written notice.
We will deduct our fee directly from your account through the qualified custodian holding your funds
and securities. We will deduct our advisory fee only when you have given our firm written authorization
permitting the fees to be paid directly from your account. Further, the qualified custodian will deliver an
account statement to you at least quarterly. These account statements will show all disbursements
from your account. You should review all statements for accuracy.
Either party may terminate the agreement at any time by providing written notice to the other party. If
you terminate our services before the end of a calendar quarter, you will incur a pro-rata fee based on
the number of days in the quarter that we managed your account. If you have pre-paid advisory fees
that we have not yet earned, you will receive a prorated refund of those fees.
Wrap Fee Program Disclosures
• The benefits under a wrap fee program depend, in part, upon the size of the Account, the
management fee charged, and the number of transactions likely to be generated in the
Account. For example, a wrap fee program may not be suitable for Accounts with little trading
activity. In order to evaluate whether a wrap fee program is suitable for you, you should
compare the Program Fee and any other costs of the Program with the amounts that would be
charged by other advisers, broker-dealers, and custodians, for advisory fees, brokerage and
other execution costs, and custodial services comparable to those provided under the Program.
• In considering the investment programs described in this brochure, you should be aware that
participating in a wrap fee program may cost more or less than the cost of purchasing advisory,
brokerage, and custodial services separately from other advisers or broker-dealers.
• Our firm and Associated Persons receive compensation as a result of your participation in the
Program. This compensation may be more than the amount our firm or the Associated Persons
would receive if you paid separately for investment advice, brokerage, and other services.
Accordingly, a conflict of interest exists because our firm and our Associated Persons have a
financial incentive to recommend the Program.
• Similar advisory services may be available from other registered investment advisers for lower
fees.
Additional Fees And Expenses
The Program Fee includes the costs of brokerage commissions for transactions executed through the
Qualified Custodian (or a broker-dealer designated by the Qualified Custodian), and charges relating to
the settlement, clearance, or custody of securities in the account.
The Program Fee does not include mark-ups and mark-downs, dealer spreads, or charges for
transactions not executed through the Qualified Custodian. Your account will be responsible for these
additional fees and expenses.
Additionally, Clients may be subject to additional fees charged by the client's acting custodian and/or
regulatory authorities. We do not receive, directly or indirectly, any of the following fees that may be
charged to you. All of these fees may not be applicable but if charged they include, among others:
• Accounts holding Alternative Investments will be charged an annual custodial fee per position
per account per year and in addition to that, an upfront fee;
• Advisory fees and administrative fees charged by Mutual Funds/Exchange Traded Funds
(ETFs);
• Custodial Fees;
• Deferred sales charges (on Mutual funds or annuities);
• Wire transfer and electronic fund processing fees; and/or,
• Annual IRA fees and/or IRA closing fees.
The wrap program fees that you pay to our firm for portfolio management services are separate and
distinct from the fees and expenses charged by mutual funds or exchange traded funds (described in
each fund's prospectus) to their shareholders. These fees will generally include a management fee and
other fund expenses. To fully understand the total cost you will incur, you should review all the fees
charged by mutual funds, exchange traded funds, our firm, and others.
Brokerage Practices
We maintain relationships with several broker-dealers, and we require that you establish an account
with a brokerage firm with which we have an existing relationship, such as Schwab or Folio
Institutional, among others. Such relationships may include benefits provided to our firm, including but
not limited to market information and administrative services that help our firm manage your
account(s). We believe that recommended broker-dealers provide quality execution services for our
clients at competitive prices. Price is not the sole factor we consider in evaluating best execution. We
also consider the quality of the brokerage services provided by recommended broker-dealers,
including the value of the firm's reputation, execution capabilities, commission rates, and
responsiveness to our clients and our firm. In recognition of the value of the services recommended
broker-dealers provide, you may pay higher commissions and/or trading costs than those that may be
available elsewhere.
We have an institutional custodial relationship with Charles Schwab & Co., Inc. (Schwab), a FINRA-
registered broker-dealer, member SIPC. Schwab Advisor Services (formerly called Schwab
Institutional) is Schwab’s business serving independent investment advisory firms like us. We are
independently owned and operated and not affiliated with Schwab. Schwab will hold your assets in a
brokerage account and will buy and sell securities in your account(s) upon our instructions. While we
recommend that you use Schwab as custodian/broker, you will decide whether to do so and you will
open your account with Schwab by entering into an account agreement directly with them.
Research and Other Soft Dollar Benefits
Although not considered “soft dollar” compensation, iCM may receive some economic benefits from
Schwab Advisor Services in the form of access to its institutional brokerage, trading, custody, reporting
and related services, many of which are not typically available to Schwab retail customers. Schwab
also makes available various support services. Some of those services help us manage or administer
our Clients’ accounts while others help us manage and grow our business. Schwab’s support services
are generally available on an unsolicited basis (we don’t have to request them) and at no charge to us
as long as we keep a certain level of our Clients’ assets in accounts at Schwab. If we have less than
the stated amount in Client assets at Schwab, Schwab may charge us quarterly service fees. Below is
a detailed description of Schwab’s support services:
Services that Benefit You: Schwab’s institutional brokerage services include access to a broad range
of investment products, execution of securities transactions, and custody of Client assets. The
investment products available through Schwab include some to which we might not otherwise have
access or that would require a significantly higher minimum initial investment by our Clients. Schwab’s
services described in this paragraph generally benefit you and your account.
Services that May Not Directly Benefit You: Schwab also makes available to us other products and
services that benefit us but may not directly benefit you or your account. These products and services
assist us in managing and administering our Clients’ accounts. They include investment research, both
Schwab’s own and that of third parties. We may use this research to service all or some substantial
number of our Clients’ accounts, including accounts not maintained at Schwab. In addition to
investment research, Schwab also makes available software and other technology that:
• provide access to Client account data (such as duplicate trade confirmations and account
statements);
• facilitate trade execution and allocate aggregated trade orders for multiple Client accounts;
• provide pricing and other market data;
• facilitate payment of our fees from our Clients’ accounts; and
• assist with back-office functions, recordkeeping, and Client reporting.
Services that Generally Benefit Only Us: Schwab also offers other services intended to help us
manage and further develop our business enterprise. These services include:
• educational conferences and events;
• technology, compliance, legal, and business consulting;
• publications and conferences on practice management and business succession; and
• access to employee benefits providers, human capital consultants, and insurance providers.
Schwab may provide some of these services itself. In other cases, it will arrange for third-party vendors
to provide the services to us. Schwab may also discount or waive its fees for some of these services or
pay all or a part of a third party’s fees. Schwab may also provide us with other benefits such as
occasional business entertainment of our personnel.
iCM understands its duty for best execution and considers all factors in making recommendations to
Clients. These research services may be useful in servicing all iCM Clients, and may not be used in
connection with any particular account that may have paid compensation to the firm providing such
services. While iCM may not always obtain the lowest commission rate, iCM believes the rate is
reasonable in relation to the value of the brokerage and research services provided
Brokerage for Client Referrals and Other Compensation
We do not receive client referrals from broker-dealers in exchange for cash or other compensation,
such as brokerage services or research.
Trade Errors
In limited circumstances, we may make an error in submitting a trade on your behalf. In the event
a trading error occurs in your account, our policy is to restore your account to the position it should
have been in had the trading error not occurred. Depending on the circumstances, corrective actions
may include canceling the trade, adjusting an allocation, and/or reimbursing the account. If a trade
error results in a loss, we will reimburse you or otherwise ensure that your account is made whole. To
the extent the trade error results in a profit, we will follow the acting custodian's internal policy on how
trade errors resulting in a profit are handled.
Block Trades
We typically combine multiple orders for shares of the same securities purchased for advisory
accounts we manage (this practice is commonly referred to as "block trading"). We will then distribute a
portion of the shares to participating accounts in a fair and equitable manner. The distribution of the
shares purchased is typically proportionate to the size of the account, but it is not based on account
performance or the amount or structure of management fees. There are no transaction costs under this
wrap program. Accounts owned by our firm or persons associated with our firm may participate in
block trading with your accounts; however, they will not be given preferential treatment.
Assets Under Management / Advisement
As of December 31, 2023, we provide continuous management services for approximately
$198,166,408 in client assets on a discretionary basis.
Our firm also provides advisory services to approximately $1,512,962,988 in assets under
advisement where we manage the model portfolios but do not execute transactions.