Item 5: Fees and Compensation
Investment Management and Consulting Services
We offer our investment management and consulting services on a “fee-only”
basis. Generally, our fee is calculated based upon the market value of the assets in
your account on the last day of the previous quarter. If the agreement is executed
at any time other than the first day of the calendar quarter, our fees will apply on
a pro-rata basis, which means that the advisory fee is payable in proportion to the
number of days in the quarter for which you are a client.
Broker-dealers and other financial institutions that hold client accounts are
referred to as custodians (“custodian/broker-dealer”). Your custodian/broker-
dealer determines the values of the assets in your portfolio.
Our standard fee schedule for investment management and consulting services is
as follows:
Assets under Management Advisory Fee1
First $5,000,000 1.00%
Next $5,000,000 0.75%
Next $15,000,000 0.50%
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Over $25,000,000 0.25%
All fees are negotiable at our sole discretion.
In general, our clients pay our advisory fees in advance of receiving our services;
under certain circumstances, AGW may bill clients for its services in arrears.
Should you terminate the advisory agreement we have entered into within five (5)
business days from the date the agreement is executed, you will receive a full
refund of any fees paid.
Should either one of us terminate the advisory agreement we have entered into
before the end of the billing period, any unearned fees that were deducted from
your account will be returned to you. The amount refunded is calculated as
prescribed in the advisory agreement.
Any unpaid fees become immediately due and payable.
Project-Based Fees
From time to time, AGW is asked to do “project work” (e.g. investment manager
searches, peer reviews, investment policy review or other services) that is not
included under a pre-existing fee agreement. In these cases, we will negotiate a
customized fee arrangement (e.g., a fixed dollar amount, etc.) and is agreed upon
in writing in the Client Agreement. We may require some or all of this fee to be
paid in advance of commencing our work or achieving certain milestones (e.g., an
interim or final presentation or report).
Project-based assignments terminated before completion of the plan are charged
the agreed upon fee.
Performance Reporting Only Fees
AGW provides performance reporting through a third-party and on occasion is
asked to provide performance reporting for clients that includes assets and/or
accounts that are not covered under the scope of an advisory fee relationship. In
these cases, we will provide such third-party performance reporting for an agreed
upon fixed fee per account.
Direct Fee Debit
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Authorization must be provided in writing for the custodian/broker-dealer to pay
us directly by charging your account. One-fourth of the annual fee is charged each
calendar quarter.
Advisory fees may be billed directly to you if you so direct in writing.
If requested, we will send you an invoice that includes the value of your
investments, our advisory fee, and how it is calculated. Your custodian/broker-
dealer also provides you with statements that show the amount paid directly to
us. You should compare the invoice that you requested to your
custodian/broker-dealer’s statement and verify the calculation of our fees. Your
custodian/broker-dealer does not verify the accuracy of fee calculations.
Additional Fees and Expenses
In addition to our fee, you may be required to pay other charges such as:
custodial fees,
brokerage commissions,
transaction fees,
internal fees and expenses charged by mutual funds or exchange traded
funds (“ETFs”),
third-party investment manager fees,
fees for separately managed account, and
other fees and taxes on brokerage accounts and securities transactions.
None of these fees are paid to or are shared with us.
Internal Fees and Expenses of Mutual Funds, ETFs, and Variable Annuities
Mutual fund companies, ETFs, and variable annuity issuers charge internal fees and
expenses for their products. Complete details of these internal fees and expenses
are explained in the prospectuses for each investment. You are strongly
encouraged to read these explanations before investing any money. We
encourage you to ask us any questions that you may have about fees and
expenses.
If you purchase mutual funds through the custodian/broker-dealer, you may pay a
transaction fee that would not be charged if the transactions were made directly
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through the mutual fund company. Also, mutual funds held in accounts at
brokerage firms may pay internal fees that are different from funds held at the
mutual fund company.
Separately Managed Accounts
A complete description of the programs and services provided, the amount of
total fees, the payment structure, termination provisions and other aspects of
each program are detailed and disclosed in: (1) the applicable third-party
investment manager’s brochure; (2) the disclosure documents of the portfolio
manager or managers selected; or (3) the Investment Strategy Proposal. Copies
of all disclosure documents relevant to separately managed account programs and
of the individual money manager(s) will be provided to any client interested in
these programs/managers.