Legal

Investment Disclosures

Regulatory disclosures, registration information, and important notices for CleverAlpha clients and prospective clients.

Last updated: November 2026  |  CleverAlpha Asset Management, LLC  |  SEC File No. 801-117634  |  CRD #301620

SEC Registration & Internet Investment Adviser Status

SEC-Registered Investment Adviser  |  CRD #301620  |  SEC File #801-117634

CleverAlpha Asset Management, LLC ("CleverAlpha") is registered as an investment adviser with the U.S. Securities and Exchange Commission (SEC) under SEC File No. 801-117634 and firm CRD number 301620. Registration with the SEC does not imply a certain level of skill or training, nor does it imply that the SEC has endorsed or approved of CleverAlpha's qualifications, algorithms, or services.

Rule 203A-2(e) Operational Interactive Website (OIW) Exclusivity: CleverAlpha is registered with the SEC pursuant to the Internet Investment Adviser exemption under Rule 203A-2(e) of the Investment Advisers Act of 1940 (17 CFR § 275.203A-2(e)). CleverAlpha provides ongoing discretionary investment advisory services exclusively through its Operational Interactive Website (accessible at www.cleveralpha.com and official CleverAlpha mobile applications) using software-based quantitative models and algorithms based on personal information each client supplies through the OIW. CleverAlpha does not provide human or offline personalized investment advice outside of the OIW; any telephone, email, or concierge interactions are strictly limited to technical, administrative, or platform onboarding support.

When an Advisory Relationship Begins: Accessing this website, interacting with public tools, or communicating with support personnel does not create an investment adviser-client relationship. A fiduciary advisory relationship with CleverAlpha commences only after you complete the OIW risk and suitability assessment, execute a written Investment Advisory Agreement electronically via DocuSign, and establish a funded brokerage account with our qualified custodian.

Detailed information about our advisory business, services, fees, personnel, and conflicts of interest is available in our Form ADV, which can be accessed directly on the SEC's Investment Adviser Public Disclosure (IAPD) website at adviserinfo.sec.gov/firm/summary/301620 or requested from us at no charge.

Risk of Loss & Underlying ETF Risks

All investing involves risk, including the possible loss of principal. The value of any investment may go up or down, and you may receive back less than you originally invested. No investment strategy, quantitative model, or automated rebalancing process can guarantee a profit or protect against loss in declining or volatile markets.

CleverAlpha constructs globally diversified portfolios using exchange-traded funds (ETFs) designed to manage risk over the long term, but diversification and asset allocation do not ensure a profit or guarantee against loss. Investors should carefully consider their investment objectives, risk tolerance, time horizon, liquidity needs, and overall financial situation before investing.

  • Market & Systematic Risk: Equity, fixed-income, real estate, commodity, and digital-asset ETFs are subject to macroeconomic shocks, geopolitical events, inflation, interest-rate fluctuations, and credit cycles.
  • Underlying ETF Expenses & Tracking Error: Each ETF held in a client portfolio charges its own internal management fee (expense ratio) deducted directly from fund net asset value, and may experience tracking error, bid-ask spread widening, or liquidity discounts relative to its underlying benchmark index.
  • Fixed-Income & Interest-Rate Risk: Bond and fixed-income ETFs are sensitive to changes in prevailing interest rates and issuer credit quality; when interest rates rise, bond prices generally decline.

Past Performance, Quantitative Models & Execution Timing

Past performance is not indicative of future results. Any references to historical returns, backtested model behavior, hypothetical or simulated performance, or forward-looking projections are for illustrative purposes only and are not guarantees of future results. Actual client outcomes may differ materially due to market conditions, timing of deposits and withdrawals, account size, custodial cash drag, advisory and fund fees, and tax status.

  • Quantitative & Algorithmic Model Limitations: CleverAlpha's portfolio construction engine applies Capital Asset Pricing Model (CAPM) and Black-Litterman optimization techniques utilizing historical asset return, volatility, and covariance data. Statistical models rely on assumptions that may not hold during structural market regime shifts, liquidity crises, or extreme tail-risk events.
  • Rebalancing & Trade Execution Timing: Automated portfolio monitoring and drift rebalancing operate according to programmatic thresholds, market trading hours, settlement windows, cash availability, and custodial cutoffs. CleverAlpha does not guarantee trade execution at any specific intraday price or timestamp.

Interactive Calculators, Analyzers & Educational Tools Safe Harbor

All public calculators, simulators, analyzers, and educational resources published on www.cleveralpha.com — including the Retirement Planner, Rollover Analyzer, 529 College Savings Analyzer, Social Security Analyzer, IRA Deductibility Checker, Child Investment Calculator, Trump Accounts Calculator, Asset Location Simulator, Allocation Model, Educational Portal, and Answer Hub — are self-directed educational and informational tools only.

  • Not Personalized Investment or Tax Advice: Outputs generated by interactive calculators are mathematical illustrations based solely on user-supplied inputs and simplified statutory or statistical assumptions. They do not take into account your complete financial profile and do not constitute personalized investment advice, a solicitation to buy or sell any security, or a fiduciary recommendation under the Investment Advisers Act of 1940.
  • Hypothetical Projection Limitations (SEC Rule 206(4)-1): Forward-looking projections and Monte Carlo or deterministic compounding scenarios are hypothetical in nature, do not reflect actual trading or client performance, and cannot predict future market returns, inflation, or legislative changes to federal or state tax brackets.
  • Retirement Plan & Rollover Comparisons: Use of the Rollover Analyzer or retirement planning tools does not constitute a fiduciary recommendation under ERISA or Department of Labor Prohibited Transaction Exemption (PTE) 2020-02 to roll over, transfer, or distribute assets from an employer-sponsored retirement plan (such as a 401(k), 403(b), or governmental 457 plan) into an Individual Retirement Account (IRA). Before deciding whether to roll over plan assets, investors should evaluate all available options: (1) leaving the assets in the former employer's plan (if permitted); (2) rolling over the assets to a new employer's qualified plan (if available); (3) rolling over the assets into an IRA; or (4) taking a taxable cash distribution (which may trigger ordinary income taxes and a 10% early withdrawal penalty). Each option carries distinct investment choices, plan-level administrative fees, creditor protections, required minimum distribution (RMD) rules, and penalty exceptions (such as the Rule of 55).

Artificial Intelligence (AI), Voice Concierge & In-App AI Disclosures

CleverAlpha embeds artificial intelligence technologies across select informational, analytical, and client-experience layers of its platform, subject to strict Chief Compliance Officer (CCO) and Chief Technology Officer (CTO) governance:

  • Deterministic Core Portfolio Engine vs. Generative AI: Core portfolio allocation, risk scoring, and rebalancing decisions are governed by CleverAlpha's deterministic, rules-based quantitative algorithm (CAPM and Black-Litterman) operating within CCO-approved guardrails — not by unconstrained or autonomous generative AI.
  • AI Voice Concierge, CLAW & Daily Narratives: Generative AI features — including the public AI Voice Concierge, the in-app CLAW assistant, daily AI-generated portfolio performance narratives, and opt-in AI Tax Asset Location commentary — are designed to explain financial concepts and summarize portfolio activity in plain language. No generative AI system can autonomously execute trades, transfer funds, or alter your investment policy without an explicit client action within the OIW.
  • Accuracy & Verification Notice: Large language models and generative AI systems are probabilistic and may occasionally produce incomplete, delayed, simplified, or inaccurate outputs. AI-generated responses are provided for informational purposes only and should never be relied upon as standalone investment, tax, or legal advice.
  • Enterprise Data Isolation: In-app client AI features are processed through enterprise-isolated cloud infrastructure (Amazon Web Services Bedrock) under contractual data-protection agreements. Client personally identifiable information (PII) and confidential account data are never used to train public or third-party foundation models.

Fee Disclosure & Two-Tier Wrap Fee Schedule

Pursuant to our current Investment Advisory Agreement and Form ADV Part 2A Appendix 1 (Wrap Fee Program Brochure), CleverAlpha offers a two-tier wrap fee structure calculated and deducted monthly in arrears based on your account value as of the last day of the previous calendar month:

  • Digital Service (Default Automated Robo-Advisor): $1.00 per month (linear fee) for accounts valued between $0 and $5,000; 0.25% (25 basis points) per annum flat fee for accounts valued above $5,000.
  • Premium Service (Opt-In AI Tax-Optimization & Automated Asset Location): Up to 0.50% (50 basis points) per annum across eligible managed assets. Fee reductions may be available for high-net-worth relationships exceeding $1,000,000 or institutional sub-advisory arrangements.

What the Wrap Fee Covers & Excludes: CleverAlpha's wrap fee covers ongoing algorithmic portfolio management, daily monitoring, automated rebalancing, and standard trade execution/brokerage commissions at our custodian. The wrap fee does not include internal ETF expense ratios (which are deducted directly by the ETF issuer from fund assets), SEC or regulatory transaction fees, outgoing wire transfer fees, paper statement fees, margin interest, or special custodial service charges.

Premium Service Suitability Notice: As disclosed in Section 1.2(B) of the Investment Advisory Agreement, the Premium Service is designed for investors with multi-account or tax-complex portfolios (such as paired taxable and tax-advantaged accounts) and may not provide net after-tax value for clients with simple portfolios, single tax-advantaged accounts, short time horizons, or low marginal income tax brackets.

No Tax, Legal, or Accounting Advice; Tax-Loss Harvesting & Wash-Sale Risks

CleverAlpha Asset Management, LLC is not a certified public accounting (CPA) firm, tax preparer, or law firm, and does not provide personalized tax, legal, or accounting advice. Any tax-related calculators, asset location recommendations, or tax-loss harvesting features are mathematical and algorithmic tools only; you should consult a qualified CPA, enrolled agent, or tax attorney before making tax-related decisions.

  • Tax-Loss Harvesting (TLH) & IRC § 1091 Wash-Sale Risks: Tax-loss harvesting performance and tax savings are not guaranteed. Under Internal Revenue Code Section 1091 (the "Wash-Sale Rule"), a realized capital loss is disallowed for federal income tax purposes if you, your spouse, or an entity or retirement account (IRA/401(k)) you control purchases a "substantially identical" security within 30 calendar days before or after the sale at a loss. CleverAlpha cannot view, monitor, or restrict trading activity in external or held-away brokerage or retirement accounts not managed by CleverAlpha; trading similar ETFs in external accounts may trigger wash sales that disallow harvested losses.
  • Tax Deferral vs. Elimination: Tax-loss harvesting generally lowers the cost basis of the replacement security purchased, which may defer rather than eliminate capital gains tax liabilities and could result in higher taxable gains in future tax years if tax rates increase or when the replacement position is ultimately liquidated.

Third-Party Qualified Custodian & Data Providers

Qualified Custodian — Charles Schwab & Co., Inc.: CleverAlpha does not take physical custody of client cash or securities. All RIA client advisory assets are held in segregated accounts registered in each client's name at Charles Schwab & Co., Inc. ("Schwab"), a registered broker-dealer and member of FINRA and SIPC (via Schwab Advisor Services). Clients receive official account statements, trade confirmations, and annual tax reporting forms (Forms 1099 and 5498) directly from Schwab and should carefully review those custodial statements upon receipt. CleverAlpha Asset Management, LLC is an independent SEC-registered investment adviser and is not owned by or affiliated with Charles Schwab & Co., Inc.

Third-Party Account Aggregation, Payments & Market Data: Where clients elect to link external bank or held-away financial accounts or view market data — supported by third-party infrastructure providers including MX Technologies (account aggregation and instant account verification), Dwolla (ACH payment rails), HyperVerge (identity verification), and Intrinio (financial market data) — such third-party data is provided on an "as-is" and "as-available" basis. CleverAlpha is not responsible for transmission delays, connectivity outages, or stale/incomplete balances reported by external financial institutions.

Entity Separation, Conflicts of Interest & FINRA/SIPC Disclosures

CleverAlpha maintains strict legal and operational separation across its regulated advisory activities, technology development, and outside broker-dealer relationships:

  • CleverAlpha Asset Management, LLC (SEC RIA — CRD #301620): Operates www.cleveralpha.com and provides fiduciary discretionary investment advisory services exclusively through its OIW.
  • CleverAlpha Technologies, LLC (Technology Subsidiary): Operates www.cleveralphatechnologies.com as a separate legal entity dedicated to developing and licensing financial technology software. Housing commercial software licensing in CleverAlpha Technologies, LLC ring-fences technology licensing activities from the RIA's fiduciary advisory operations.
  • CleverAlpha Securities — DBA of Velocity Capital LLC (FINRA / SIPC — CRD #171810): Brokerage and fixed-income marketplace services offered at www.cleveralphasecurities.com are provided separately through CleverAlpha Securities, a trade name (DBA) of Velocity Capital LLC (CRD #171810, SEC File #8-69479), an SEC-registered broker-dealer and member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). CleverAlpha Asset Management, LLC holds no ownership stake in Velocity Capital LLC or Velocity Clearing LLC (CRD #126588). Certain CleverAlpha principals — including CEO & Chief Compliance Officer Richard Cabanes (CRD #2941600) and CTO Lucio Flores (CRD #6463500) — maintain separate broker-dealer registrations and employment/consulting relationships with Velocity Clearing LLC and Velocity Capital LLC, as fully disclosed in Form ADV Part 1 Item 7 and Form ADV Part 2B. No RIA client advisory accounts or advisory portfolio trades are routed through Velocity Capital LLC.
  • SIPC Protection Notice: SIPC protects securities and cash in brokerage accounts of SIPC-member firms (including Charles Schwab & Co., Inc. and Velocity Capital LLC) up to $500,000 per customer capacity (including up to $250,000 for cash claims) in the event of broker-dealer insolvency. SIPC does not protect against market losses or declines in the value of your investments. An explanatory brochure is available at sipc.org.
  • Fiduciary Duty & AUM Fee Alignment: Because our advisory fee is calculated as a percentage of assets under management, we have a financial incentive to encourage clients to maintain or increase assets managed on our platform. As an SEC-registered fiduciary under the Investment Advisers Act of 1940, we are legally bound to act in your best interest at all times.
  • Affirmative No-Third-Party-Compensation Representation: CleverAlpha Asset Management, LLC receives zero Payment for Order Flow (PFOF), zero 12b-1 distribution fees, zero soft-dollar research credits, and zero revenue-sharing or shelf-space compensation from any ETF sponsor, fund company, or custodian. We do not engage paid solicitors, referral promoters, or financial influencers ("finfluencers"), and we do not publish compensated client testimonials or endorsements under SEC Rule 206(4)-1. Third-party directory seals (such as Better Business Bureau accreditation) or unsolicited mobile app store ratings are not compensated endorsements of investment performance.

A complete discussion of outside business activities and conflicts of interest is set forth in Items 4, 5, 10, 11, and 12 of our Form ADV Part 2A Firm Brochure and Form ADV Part 2B Brochure Supplement.

Form ADV, Form CRS, Governing Documents & BrokerCheck

Our Form ADV Part 2A (Firm Brochure), Form ADV Part 2A Appendix 1 (Wrap Fee Program Brochure), Form ADV Part 2B (Brochure Supplement), and Form CRS (Form ADV Part 3 — Client Relationship Summary) contain comprehensive disclosures regarding our advisory services, wrap fee schedule, quantitative methodology, disciplinary history (none), and conflicts of interest. These documents are delivered electronically to all new clients prior to or at the time of entering into an Investment Advisory Agreement and are available at any time free of charge:

Electronic Delivery & U.S. Residency Eligibility: Because CleverAlpha operates exclusively as an Internet Investment Adviser under SEC Rule 203A-2(e), clients must consent to electronic delivery of all advisory agreements, Form ADV brochures, Form CRS, privacy notices, and custodial statements. This website and CleverAlpha's advisory services are intended solely for eligible legal residents of the United States (age 18 or older with a valid U.S. residential address and U.S. Taxpayer Identification Number) in jurisdictions where CleverAlpha is registered or exempt from registration.