Item 5: Fees and Compensation
Advisory Fees and Compensation
For separately managed accounts, Advocate typically receives compensation based on a percentage
of assets under management or advisement (the “Management Fee”).
The exact fee and the manner in which the Management Fees are calculated depend on the services
to be provided to the Client. Separately managed account client fees are individually negotiated.
Clients are required to pay management fees quarterly, in advance. Advocate provides invoices to
clients at the beginning of each quarter. The Management Fee is typically 1% of assets under
management as calculated by a third party administrator.
Advocate does not currently charge performance based fees, but may do so in the future. Depending
on the terms included in the Client advisory agreement, Clients can remit payment by check or
authorize deduction from the client accounts in response to the invoice. Fees are not automatically
deducted from client accounts.
Expenses
In addition to paying Management Fees and Performance Fees, client accounts are subject to other
investment expenses such as custodial charges, administrator fees, charges for data feeds such as
Bloomberg (including terminal charges), brokerage fees, commissions and related costs; taxes,
duties and other governmental charges. We describe trading costs in greater detail in the subsequent
“Brokerage Practices” section of this brochure. In the case of a separately managed account client,
fees and expenses are defined and detailed in the investment management agreement. The fees
charged to any given Client by Advocate may be higher than fees charged to other Clients, for
advisory services to accounts of comparable size and investment objectives. From time to time,
Advocate reserves the right to renegotiate certain client fee schedules based on objective standards
established by Advocate. To the extent that a Client is invested in an exchange-traded fund or
mutual fund, the Client will bear, along with other shareholders, its pro rata portion of the exchange-
traded fund’s or mutual fund’s management, trading, and administrative fees and expenses.
If a Client (or Clients) of Advocate is responsible for some or all of a particular cost or expense,
Advocate may allocate the cost or expense among those entities and Clients in its discretion in a
fair and equitable manner. Expenses allocated to separately managed account clients may be
negotiated individually with respect to each separately managed account client. Furthermore, at its
discretion or pursuant to the terms of an investment advisory agreement, Advocate may pay
expenses that would otherwise be allocated to a Client.
Prepayment of Fees
As explained above, the Management Fees payable by investors are generally prorated and subject
to adjustment for any partial periods.
Additional Compensation for the Sale of Securities
Neither Advocate nor its officers, employees, or other affiliates accept compensation for the sale of
securities or other investment products.