Item 5 - Fees and Compensation
Compensation for Advisory Services: We are typically compensated for our
services through an asset-based fee or a combination of an asset-based fee and
performance-based fee. We do not have a set fee schedule. Fees may be
negotiated.
Method of Payment: We do not deduct fees from clients’ assets, nor do we offer
clients the option of having us deduct fees from their assets. For our sponsored
funds, we have the authority to direct the fund administrator to pay us. For most
discretionary separate accounts and funds, we send invoices for fees incurred in
arrears, typically on a quarterly basis, although certain clients are invoiced on a
monthly basis. Certain discretionary separate account clients calculate their own
fees and pay those in arrears on either a quarterly or monthly basis. For non-
discretionary separate accounts, we typically send invoices each month prior to
the end of the month, but payment is not due until after the end of the month. For
advisory services, we typically charge a fixed-fee. For consulting projects, we
typically bill on a fixed-fee basis and fees may be billed in advance or in arrears.
For purposes of calculating fees, assets in any form in the client's account are
considered, including cash balances and money market assets. As a result,
clients may pay two layers of fees on cash portions, our fee and fees paid in the
money market or sweep vehicle.
Other Fees and Expenses: Each client will incur and is responsible for paying
its share of any brokerage or other transaction costs related to the trading of its
account. Our brokerage practices are described in Item 12 below. We do not
provide custodial services, nor do we charge any client for custodial services.
For separate accounts, the client retains its own custodian and pays those
custodial fees separately. Sponsored funds have their own expenses, such as
administration, custody, and legal expenses, that are borne by such fund (and
therefore are indirectly borne by each investor in the fund). These expenses are
described in each fund’s offering document.
Pre-Payment of Fees: We do not require that discretionary separate accounts,
non-discretionary separate accounts, advisory accounts or funds pre-pay fees.
For consulting projects, we may require pre-payment of fees. Currently none of
our separate accounts or sponsored funds pre-pay fees. If an arrangement with
a client provides that the client pre-pay its fees, the client agreement will typically
describe how the client may obtain a refund of its pre-paid fee if the contract is
terminated before the end of the billing period. It will typically also describe the
method for determining the amount of the refund.
No Compensation for Sale of Securities: Neither we nor any of our supervised
persons accept compensation for the sale of securities or other investment
products, such as asset-based sales charges or service fees from the sale of
mutual funds.