Item 5 FEES AND COMPENSATION
A. The client can determine to engage Adero to provide discretionary investment advisory services as
described below based on a percentage of assets under management as well as fixed fees, depending
on the particular type of services to be provided. The specific fees charged by Adero for services
provided will be set forth in each client’s Agreement.
INVESTMENT MANAGEMENT SERVICES
Adero charges an annual advisory fee that is agreed upon with each client and set forth in an agreement
executed by Adero and the client. Adero’s annual investment advisory fee for investment management
services is generally based on a percentage of the market value of the assets under management as
follows:
Total Annual
Client Fee Rate Asset Tier
0.95% on the first $3,000,000 of managed assets, plus
0.80% on the next $2,000,000 of managed assets, plus
0.70% on the next $5,000,000 of managed assets, plus
0.50% on the next $10,000,000 of managed assets, plus
0.40% on the next $10,000,000 of managed assets, plus
0.30% on assets over $30,000,000
The investment advisory fee is computed on the last day of each quarter by determining the market value
of assets under management, including cash, accrued interest, accrued dividends, and securities
purchased on margin, using the following guidelines: (a) cash or cash equivalents are valued at their dollar
value; (b) marketable securities are valued at the current market price provided by the custodian; and (c)
for securities for which there is no active market (i.e., private investment funds), the most recent
valuation provided by the sponsor or the initial investment cost, as applicable.
The investment advisory fee is billed quarterly, in advance, and prorated for accounts established or
terminated at times other than the start of the quarter.
Although Adero generally charges for investment management services according to the fee schedule
provided above, Adero may negotiate alternative fee arrangements (including a fixed percentage or
lower minimum) with the client based on, but not limited to the following factors: the complexity of
the engagement, the value of assets under management, anticipated future additional assets, related
accounts, investment objectives, account composition, and the individual(s) performing the services.
For certain clients, we charge an advisory fee for services provided to the held-away accounts
mentioned above in Item 4, just as we do with client accounts held at our primary custodian(s). The
specific fee schedule charged by us is provided in the client’s investment advisory agreement with us.
In regard to private investment funds, Adero generally relies upon the value or estimated value
provided by the specific private investment fund. Adero often receives private fund valuations on a
delayed basis; such delays could mean that the current value of an investor’s fund holding could be
significantly more or less than the value shown on their statement. Adero Partners’ advisory fee is
based on the value shown on the client statement. While our current practice is to value private
investment funds based on the valuations received from the private fund managers, we retain the
discretion to independently determine a value for any private investment fund in circumstances when
we believe that the value or estimated value provided by the private investment fund does not
accurately reflect the value of the private investment fund. In any such cases, we would rely upon
available ancillary reporting and other applicable information.
Certain legacy clients are charged an amount different from the fee schedule set forth above.
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
Adero may provide its clients with financial consulting services (which may include non-investment-
related matters as outlined in Item 4 above) on a stand-alone fee basis. For these services, Adero
charges either an hourly or a fixed fee. Adero’s hourly rates generally range from $250 - $500,
depending upon the level of staff experience required for the services requested.
Before engaging Adero to provide consulting services, the client will generally be required to enter
into a written agreement setting forth the terms and conditions of the engagement. Generally, Adero
requires one-half of the financial planning or consulting fee, payable upon entering into a written
agreement. The balance is generally due upon completion.
B. Clients may elect to have Adero’s investment advisory fees deducted from their custodial account.
Both Adero’s Investment Advisory Agreement and the custodial/clearing agreement may authorize
the custodian to debit the account for the amount of Adero’s investment advisory fee and to directly
remit that management fee to Adero in compliance with regulatory procedures. The custodian of the
client’s accounts provides each client with a statement, at least quarterly, indicating separate line
items for all amounts disbursed from the client's account(s), including any fees paid directly to Adero.
In the limited event that Adero bills the client directly, payment is due upon receipt of Adero’s invoice.
Clients may make additions to and withdrawals from their account at any time, subject to Adero’s
right to terminate an account. Additions may be in cash or securities provided that the Firm reserves
the right to liquidate transferred securities or decline to accept particular securities into a client’s
account. Clients may withdraw account assets at any time on notice to Adero, subject to the usual
...