Item 5 Fees and Compensation
Investment Management Service Fees
Contractually, the Firm does not charge or receive Investment Management Service
Fees based on the amount of Assets Under Management.
A Performance fee will be charged to certain “qualified clients” as defined in Section
205-3(d) of the Investment Advisers Act of 1940. The Performance fee will be equal to
ten per cent (10%) of annual returns on the Investment Portfolio in excess of the pre-
agreed Hurdle Rate as defined in the Investment Advisor Agreement. There is to be no
annual High-Water Mark on the Performance Fee; neither is there any cap on the total
Performance Fee. In the event, the annual returns on the Investment Portfolio do not
exceed the Hurdle Rate, AEM will not be entitled to a Performance Fee for that annual
period. The Performance Fee will be due and payable within forty-five (45) calendar
days of the end of the twelve (12) month fiscal investment period.
AEM’s Investment Management Fees are separate and distinct from any outside asset
manager(s), investment fund or direct investing fees and expenses including any
performance fees charged by the outside asset managers.
AEM does not receive fees or retrocessions of any type from investment managers.
Limited Negotiability of Advisory Fees
Although AEM has established the aforementioned fee schedule(s), the Firm retains the
discretion to negotiate alternative fees on a client-by-client basis. Individual client
circumstances, among other things, may be considered in determining the fee schedule.
These include the complexity of the client’s requirements, amount of assets to be
placed under management, anticipated future additional assets; related accounts;
portfolio style, account composition, reports, among other factors. The specific annual
fee schedule is agreed upon in the management agreement between the adviser and
each client.
The Firm may group certain related client accounts for the purpose of achieving the
minimum account size requirements and determining the annualized fee.
Reduced fees, not generally available to advisory clients, may be offered to family
members and friends of associated persons of the Firm.
GENERAL INFORMATION
Termination of the Advisory Relationship
A client agreement may be canceled at any time, by either party, for any reason upon
receipt of thirty (30) days’ written notice. Upon termination of any account, any prepaid,
unearned fees will be refunded within 30 days. In calculating a client’s reimbursement
of fees, AEM will pro-rate the reimbursement according to the number of days
remaining in the billing period.
Asset Manager, Private Fund and Mutual Fund/ ETF Fees
All fees paid to AEM for investment management services are separate and distinct
from the fees and expenses charged by:
1. Mutual funds
2. ETFs
3. Outside asset manager fees
4. Investment fund fees and expenses including any performance fees, and/or
5. Direct investing fees or expenses.
These fees and expenses are described in each asset manager’s disclosure
documents, and/or any fund's prospectus or offering documents. These fees will
generally include a management fee, other fund expenses, and a possible performance
fee.
If the fund also imposes sales charges, a client may pay an initial or deferred sales
charge.
A client can invest in any of these funds or alternatives directly, without the Firm’s
services. In that case, the client would not receive the services provided by the Firm
which are designed, among other things, to assist the client in determining which
outside asset manager(s), private funds, mutual fund or ETFs are most appropriate to
the particular client's financial condition and objectives.
Accordingly, the client should review both the fees charged by the outside asset
managers and/or funds and AEM’s fees to fully understand the total amount of fees to
be paid by the client and to thereby evaluate the advisory services being provided.
Additional Fees and Expenses
In addition to advisory fees, clients are also responsible for the fees and expenses
charged by custodians and imposed by broker dealers, including, but not limited to, any
transaction charges imposed by a broker dealer with which an independent investment
manager effects transactions for the client's account(s). Please refer to the "Brokerage
Practices" section (Item 12) of this Form ADV for additional information.
Grandfathering of Minimum Account Requirements
Pre-existing advisory clients are subject to AEM's minimum account requirements and
advisory fees in effect at the time the client entered into the advisory relationship.
Therefore, the Firm's minimum account requirements will differ among clients.
ERISA Accounts
AEM is deemed to be a fiduciary to advisory clients that are employee benefit plans or
individual retirement accounts (IRAs) pursuant to the Employee Retirement Income and
Securities Act ("ERISA"), and regulations under the Internal Revenue Code of 1986 (the
"Code"), respectively. As such, the Firm is subject to specific duties and obligations
under ERISA and the Internal Revenue Code that include among other things,
restrictions concerning certain forms of compensation. To avoid engaging in prohibited
transactions, AEM may only charge fees for investment advice about products for which
the Firm and/or related persons do not receive any commissions or 12b-1 fees, or
conversely, investment advice about products for which the Firm and/or related persons
receive commissions or 12b-1 fees, however, only when such fees are used to offset
AEM's advisory fees.
AEM currently is not retained by any such clients.
Advisory Fees in General
Clients should note that similar advisory services may, or may not, be available from
other registered or unregistered investment advisers for similar or lower fees.
Limited Prepayment of Fees
Under no circumstances does the Firm require or solicit payment of fees in excess of
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