Item 5 - Fees and Compensation
General Fee Information
Fees paid to AWM are exclusive of all custodial and transaction costs paid to the client’s custodian,
brokers or other third-party consultants. Please see Item 12 – Brokerage Practices for additional
information. Fees paid to AWM are also separate and distinct from the fees and expenses charged
by mutual funds, ETFs (exchange traded funds) or other investment pools to their shareholders
(generally including a management fee and fund expenses, as described in each fund’s prospectus
or offering materials). The client should review all fees charged by funds, brokers, AWM and others
to fully understand the total amount of fees paid by the client for investment and financial-related
services.
Either you or AWM may terminate our Investment Advisory Agreement at any time, subject to any
written notice requirements in the agreement. In the event of termination, any paid but unearned
fees will be promptly refunded to you based on the number of days that your account was managed,
and any fees due to us from you will be invoiced or deducted from your account prior to
termination.
Portfolio Management and Private Wealth Management Fees
Fees for Portfolio Management Services and Private Wealth Management Services are assessed
based on the value of your investment accounts. Annual fees are individually negotiated and agreed
upon, and generally range from 1.0% to 1.5%, depending upon your specific needs. Private Wealth
Management clients may also be subject to a fixed quarterly fee when a significant proportion of the
plan is focused on assets outside the firm’s management. Fixed fees are negotiated with you at the
time of the engagement.
The minimum portfolio value for either of these service levels is generally set at $1,000,000. We
may, at our discretion, make exceptions to the foregoing or negotiate special fee arrangements
where we deem appropriate under the circumstances.
Portfolio Management and Private Wealth Management fees are generally payable quarterly in
advance. If management begins after the start of a quarter, fees will be prorated accordingly. With
your authorization, unless other arrangements are made fees are normally debited directly from
your account(s). Fee calculations are adjusted for additions to and withdrawals from the portfolio
totaling $50,000 or more.
Non-discretionary Consulting Advice Fees
Subject to our sole discretion, fees for non-discretionary consulting advice regarding private fund
investments and 401(k) accounts will be assessed an annual fee of up to 0.50%. This fee is exclusive
of all management and administrative fees that may be assessed by fund managers, mutual fund
expenses on funds inside of 401(k) accounts, third party record-keepers, etc. The fee will be
assessed quarterly in advance, and will be based upon the value of the assets at the end of the prior
quarter. We may, at our discretion, make exceptions to the foregoing or negotiate special fee
arrangements where we deem it appropriate under the circumstances.
Separate Account Manager Fees
In instances where the services of a Separate Account Manager are utilized, the Separate Account
Manager fees will be charged in addition to our fee and will be detailed in the Management
Agreement signed by you.
Hedge Equity Strategy Fees
We assess an annual percentage fee of 0.50% on the value of assets invested in the Hedged Equity
Strategy. This fee is separate from and in addition to our Portfolio Management and Private Wealth
Management fees. The fee is generally payable quarterly in advance and is prorated if management
starts after the beginning of a quarter. You should be aware that we have an incentive to
recommend this strategy due to the receipt of additional fees. Prior to implementation of the
Hedged Equity Strategy, you will execute an Addendum to the existing Investment Management
Agreement with us which, among other things, describes the risks and fees in this arrangement.
Private Fund Fees
As compensation for serving as the manager of the Fund, we are entitled to the following
compensation:
• Management Fee. AWM is entitled to an annual management fee, payable quarterly in
advance, equal to 1.00% of the value of the Fund’s membership interests, as determined
by AWM (the “Management Fee”).
• Performance-Based Fee. AWM holds Class B membership interests in the Fund (“Class B
Units”) and, in that capacity, is entitled to a portion of the Fund’s profits with respect to
one of the Fund’s investments (the “Performance Fee”). Please see Item 6 –
Performance-Based Fees and Side-by-Side Management for additional information.
• Revenue Shares. The Fund distributes to AWM, in AWM’s capacity as a holder of Class B
Units, all or a portion of certain fee revenue that is paid to the Fund by an affiliate of one
of the Fund’s underlying investments. Additional information regarding these
distributions is in the offering documents for the Fund.
• Fund Expenses. The Fund is responsible for paying, or reimbursing AWM for, the
organizational expenses and operating expenses of the Fund, as described in more
detail in the offering documents for the Fund.
AWM, in its sole discretion, may reduce or waive the Management Fee or the Performance Fee for
any investor in the Fund. In the event of the termination of AWM’s role as a manager of the Fund
prior to the end of a quarter, fees will be prorated, and any paid but unearned fees will be promptly
refunded to the Fund, and any fees due to AWM from the Fund will be invoiced to or deducted from
the Fund prior to termination.
Other Compensation
Certain of our employees are also Registered Representatives of Private Client Services (“PCS”), a
FINRA and SIPC member, and registered broker/dealer. As such, they are entitled to receive
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