Item 5 – Fees and Compensation
A. Fees for Advisory Services
Investment Advisory Services
Investment advisory fees are generally paid quarterly, in advance of each calendar quarter,
pursuant to the terms of the investment advisory agreement. Fees are based on the total market
value of assets under management as of the last business day at the end of the prior calendar
quarter. Typically, a flat fee, which can be in a range from 0.5% to 1.25% is charged annually and
may be negotiable, depending on the scope and complexity of the services to be provided, the level
of assets to be managed and the overall relationship with the client. The client may choose a
floating fee rate which is calculated as 1.25% on the first $1 million of assets under management,
1.00% on the next $1 million to $5 million of assets under management, and 0.5% on the next
balance over $5 million of assets under management divided by 4. The investment advisory fee in
the first quarter of service is prorated from the inception date of the client’s account(s) to the end
of the first quarter. Fees may be negotiable at the sole discretion of the adviser. The advisor may
waive fees on certain allocations in the clients’ accounts, including cash allocations, at the adviser's
sole discretion.
The client’s fees will take into consideration the aggregate assets under management with the
adviser. All securities held in accounts managed by ADIFO will be independently valued by the
custodian (as discussed in Item 12). The Firm will not have the authority or responsibility to value
portfolio securities.
Clients may make additions to and withdrawals from their account(s) at any time, subject to
ADIFO’s right to terminate an account. Additions may be in cash or securities provided that
ADIFO reserves the right to liquidate any transferred securities or decline to accept particular
securities into a client’s account(s). Clients may withdraw account assets on notice to ADIFO,
subject to the usual customary securities settlement procedures. However, ADIFO designs its
portfolio’s as long-term investments and the withdrawal of assets may impair the achievement of
a client’s investment objectives. ADIFO may consult with its clients about the options and
ramifications or transferring securities. However, clients are advised that when transferred
securities are liquidated, they are subject to transaction fees, fees assessed at the mutual fund level
and/or tax ramifications.
Clients may incur a $25 ticket charge for transactions in mutual funds, which is imposed and
collected by the clearing broker.
Investment Consulting and Financial Planning Services
ADIFO offers financial planning and consulting services on either an hourly basis or a fixed
engagement. Hourly engagements are billed at the rate of up to $500 per hour, based on the
complexity of the services to be provided and the experience of the individual providing services.
Fixed fee engagements are negotiated based on the expected number of hours to complete the
engagement at the adviser’s hourly rate. Fees may be negotiable at the sole discretion of the
adviser, depending on the nature and complexity of services provided. An estimate for total hours
and/or costs will be provided to the client prior to engaging for these services. The adviser’s fee is
exclusive of, and in addition to, brokerage fees, transaction fees, and other related costs and
expenses, which may be incurred by the client. However, the adviser shall not receive any portion
of these commissions, fees, and costs. For certain clients, financial planning services are included
in the investment advisory fee.
B. Fee Billing
Investment Advisory Services
Investment advisory fees are calculated by the adviser or its delegate and deducted from the client’s
account(s) at the custodian. The amount due is calculated by applying the quarterly rate (annual
rate or floating rate divided by 4) to the total assets under management with ADIFO at the end of
the prior quarter. Clients will be provided with a statement, at least quarterly, form the custodian
reflecting the deduction of the investment advisory fee. Clients provide written authorization
permitting the Firm to be paid directly from their accounts held by the custodian as part of the
investment advisory agreement and separate account forms provided by the custodian.
Financial Planning and Family Office Consulting Services
Fees for hourly and fixed fee financial planning or consulting engagements may be invoiced up to
50% upon execution of the financial planning agreement with the balance due upon completion of
the engagement deliverable(s). Certain clients may have their planning fees included with their
overall investment advisory fees.
C. Other Fees and Expenses
Clients may incur certain fees or charges imposed by third parties in connection with investments
made on behalf of the client’s account(s).
The Client shall be responsible for all securities transaction fees for trading in the client’s
account(s) at the custodian. The custodian may charge the client additional fees, such as wire fees,
trade-away fees or other costs. The adviser does not share in any of these fees. In addition, all fees
paid to the Firm for investment advisory services are separate and distinct form the expenses
charged by mutual funds and exchange-traded funds to their shareholders. These fees and expenses
are described in each fund’s prospectus. These fees and expenses will generally be used to pay
management fees for the funds, other fund expenses, account administration, and a possible
distribution fee. The client should review both the fees charged by the fund(s) and the fees charged
by ADIFO to fully understand the total fees paid.
D. Advance Payment of Fees and Termination
Investment Advisory Services
The Firm is compensated for its investment advisory services in advance of the quarter in which
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