DISCLOSURE INFORMATION - Conflicts of Interest


Cornerstone serves as the investment manager of a limited partnership that pools investor assets for investment purposes. Cornerstone may have a conflict of interest in investing clients in the limited partnership. The limited partnership does charge a performance fee for qualified clients. A performance-based fee may create a greater incentive for Cornerstone to seek to maximize returns to the client through riskier or more speculative investments than would be the case if Cornerstone were compensated on a percentage of assets under management or a flat-fee basis. Cornerstone may also have an economic incentive to make investments as opposed to having the clients’ assets sitting in a bank account or other investment earning a lesser interest rate. More information about the limited partnership can be found in its offering documents.


Although clients may not be charged directly by Cornerstone for certain services and investment options provided to the clients, Cornerstone may from time to time indirectly receive compensation as a result of investing clients' assets. As such, Cornerstone may have a vested interest in directing clients’ assets to those investments that will benefit Cornerstone. The various methods in which Cornerstone may indirectly receive compensation are as follows:


Revenue through Strategic Alliances:

Cornerstone has aligned itself with other investment specialists through an arrangement referred to as a "Strategic Alliance" – an affiliation between two companies for the purpose of applying each company's strengths precisely where they are most effective and efficient. These Strategic Alliances provide a benefit both to the client as well as to Cornerstone. The client benefits in that he or she has access to specific investment options that have been researched and approved by Cornerstone at a cost no more than if the client had gone directly to the Sponsor/Manager of the investment in the first place. Cornerstone benefits in that such an arrangement allows Cornerstone to receive compensation without charging the client.


These investment specialists are willing to share with Cornerstone any fees they receive from the client. This source of revenue to Cornerstone may come in the form of the following:

  • The sharing of annual fees from placing moneys with portfolio managers for the management of stocks, bonds, trust deeds, real estate, hedge funds, commodity futures, etc.
  • Compensation for placing moneys in venture capital investments, real estate investments, and other such investments.

Revenue through Commissions:

Certain transactions, such as those involving insurance products and real estate brokerage etc., may generate commissions to employees of Cornerstone.


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