Item 5: Fees and Compensation
Method of Compensation and Fee Schedule
ASSET MANAGEMENT
Alturas offers discretionary direct asset management services to advisory Clients. Alturas
charges an annual investment advisory fee based on the total assets under management as
follows:
Assets Under Management Annual Fee Quarterly Fee
Up to $100,000 2.00% .500%
$100,0001 to $250,000 1.50% .375%
$250,001 to $500,000 1.25% .313%
$500,001 to $1,000,000 1.15% .288%
$1,000,001 to $3,000,000 1.00% .250%
$3,000,001 to $5,000,000 0.85% .213%
Over $5,000,000 0.75% .188%
This is a breakpoint fee schedule, where the entire portfolio is charged a single asset
management fee based on the total assets under management.
For example, a Client with $750,000 under management would be charged 1.15% on the
full amount, resulting in an annual fee of $8,625 ($750,000 × 1.15%).
Fees to be assessed will be outlined in the advisory agreement to be signed by the Client.
Annualized fees are billed on a pro-rata basis quarterly in advance based on the value of
the account(s) on the last day of the previous quarter.
The annual fee may be negotiable based on a variety of factors, including but not limited to
the nature of the client relationship, types of assets, anticipated future earning capacity,
potential for additional assets, total assets under management, related or household
accounts, account composition, and direct negotiations with the Client.
Household account values managed by the Firm are aggregated to determine applicable fee
tiers.
Lower fees for comparable services may be available from other sources. Clients may
terminate their account within five (5) business days of signing the Investment Advisory
Agreement with no obligation and without penalty. Clients may terminate advisory
services with thirty (30) days written notice. For accounts opened or closed mid-billing
period, fees will be prorated based on the days services are provided during the given
period. All unearned fees will be refunded to the Client.
In computing the market value of any investment of the Account, each security listed on
any national securities exchange or otherwise subject to current last-sale reporting shall be
valued at the last sale price on the valuation date. However, for assets such as alternative
investments where a fee is charged and the custodian does not price the security, the asset
may be priced by the provider of the asset according to their pricing policy or may also
involve independent pricing services for assets that are priced in that manner. Alturas
itself, does not price any investment or security for which it charges a management fee or
that is included in the portfolio return.
Client shall be given thirty (30) days prior written notice of any increase or decrease in
fees. Any change in fees will be acknowledged in writing by both parties before said
adjustments occur.
FINANCIAL PLANNING AND CONSULTING
Alturas charges on an non-negotiable hourly fee for financial planning and consulting
services. The total estimated fee, as well as the ultimate fee charged, is based on the scope
and complexity of our engagement with the client. Financial Planning Services are offered
based on an hourly fee of $175 per hour.
Alturas reserves the right to waive the fee should the Client implement the plan through
Alturas.
Prior to the planning process the Client will be provided an estimated plan fee. Services are
completed and delivered inside of ninety (90) days contingent upon timely delivery of all
required documentation. Client may cancel within five (5) business days of signing
Agreement with no obligation and without penalty. If the Client cancels after five (5)
business days, any unpaid earned fees will be due to Alturas. If a client terminates its
relationship with Alturas before the client’s written financial plan or analysis is complete,
Alturas will deliver completed portions of any documents to the client.
Fees for financial plans are due upon delivery of the completed plan.
Client Payment of Fees
Investment management fees are billed quarterly in advance, meaning that we charge you
before the billing period. Fees are deducted from a designated Client account to facilitate
billing. The Client must consent in advance to direct debiting of their investment account.
Fees for financial plans are due upon delivery of the completed plan.
Alturas, in its sole discretion, may waive its minimum fee and/or charge a lesser
investment advisory fee based upon certain criteria (e.g., historical relationship, type of
assets, anticipated future earning capacity, anticipated future additional assets, dollar
amounts of assets to be managed, related accounts, account composition, negotiations with
Clients, etc.).
Additional Client Fees Charged
Custodians may charge transaction fees on purchases or sales of certain mutual funds,
equities, and exchange-traded funds. These charges may include mutual fund transaction
fees, postage and handling and miscellaneous fees.
For more details on the brokerage practices, see Item 12 of this brochure.
Prepayment of Client Fees
Alturas does not require any prepayment of fees of more than $500 per Client and six
months or more in advance.
Investment management fees are billed quarterly in advance.
If the Client cancels after five (5) business days, any unearned fees will be refunded to the
Client, or any unpaid earned fees will be due to Alturas.
External Compensation for the Sale of Securities to Clients
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