Item 5 Fees and Compensation
A. Investment Supervisory Services
The annual fee for investment supervisory services will be charged as a percentage of assets under
management, according to the schedule below:
Assets Under Management Annual Fee (%)
First $1,000,000 in assets 1.50%
Next up to $4,000,000 in assets ($1,000,001 to $5,000,000) 1.15%
Remainder of assets over $5,000,000 0.80%
For illustrative purposes, if you have $2,500,000 of assets under management at ADCM, LLC, the first $1,000,000
will carry an annual fee of 1.5%. The next $1,500,000 will carry an annual fee of 1.15%.
ADCM's management fee for investment supervisory services is payable quarterly in advance or arrears
depending upon which Custodian is selected pursuant to the terms of the discretionary agreement and is
calculated on assets under management on the last market day of the calendar quarter. When an account is
opened, the asset-based fee is billed for the remainder of the current billing quarter. When an account is closed
unearned prepaid fees are refunded pro-rata.
Certain existing clients have fee schedules that differ from the fees above based upon certain criteria, such as
anticipated future earning capacity, anticipated future additional assets, dollar amount of assets to be
managed, related accounts, account composition, pre-existing/legacy client relationship, account retention
and pro bono activities, among other possible factors.
B. General Information on Fees
In certain circumstances, fees, account minimums and payment terms are negotiable depending on a client's
unique situation - such as the size of the aggregate related party portfolio size, family holdings, low cost basis
securities, or certain passively advised investments and pre-existing relationships with clients. Certain clients
pay more or less than others depending on the amount of assets, type of portfolio, or the time involved, the
degree of responsibility assumed, complexity of the engagement, special skills needed to solve problems, the
application of experience and knowledge of the client's situation. Typically, related client accounts are linked
for purposes of fee calculation if all parties agree; meaning certain accounts, approved by ADCM, are grouped
for fee calculations.
Under certain circumstances, clients also incur charges for other account services provided by custodians not
directly related to the execution and clearing of transactions including, but not limited to, custodial fees
including account termination fees, safekeeping fees, and fees for legal or courtesy transfers of securities.
Termination
Either party can terminate an agreement at any time by written notice. Any pre-paid fees are pro-rated from
the date that the written notice is received and returned to the client.
Additional Fees and Expenses
As part of our investment supervisory services to you, when appropriate, we invest, or recommend that you
invest, in mutual funds and exchange traded funds. The fees that you pay to our firm for investment supervisory
ADCM, LLC Form ADV Part 2A
and/or consulting 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 are known as third
party fees. These fees will generally include a management fee and other fund expenses. You will also incur
transaction charges and/or brokerage fees when purchasing or selling securities. These charges and fees are
typically imposed by the broker-dealer or custodian through whom your account transactions are executed.
We do not share in any portion of the brokerage fees/transaction charges imposed by the broker-dealer or
custodian. To fully understand the total cost you will incur, you should review all fees charged by mutual funds,
exchange traded funds, our firm, and others. For information on our brokerage practices, please refer to the
Brokerage Practices section of this brochure.
Margin Fees
When appropriate for certain clients, we trade client accounts on margin. Each client must sign a separate
margin agreement before margin is extended to that client account. Fees for advice and execution on these
securities are based on the total asset value of the account, which includes the value of the securities
purchased on margin. While there are occasions when a negative amount shows on a client’s statement for the
margined security as the result of a lower net market value, the amount of the fee is based on the absolute
market value. This creates a conflict of interest where we have an incentive to encourage the use of margin to
create a higher market value and therefore receive a higher fee. To mitigate this conflict, our firm endeavors at
all times to put the interests of our clients first as part of our firm’s fiduciary duty as a registered investment
adviser, and each of our representatives adheres to our Code of Ethics. ADCM periodically conducts reviews of
client accounts to confirm that each client’s portfolio is invested in accordance with each client’s investment
objectives, risk tolerance and financial situation. Under certain circumstances, the use of margin also results
in interest charges in addition to all other fees and expenses associated with the security involved. These
interest charges are passed on to the client to pay.
Compensation for Sales of Securities
ADCM does not receive compensation for buying or selling securities and does not receive any compensation
for securities in any Client account, other than the Investment Supervisory Services Fees noted above.