Item 5 - Fees and Compensation
A. Below is a discussion of how the Adviser is compensated in connection with providing advisory
services to its Clients. The Adviser may enter into different fee arrangements on a client-by-client
basis. It is critical that all investors refer to the applicable Client’s IMA or Governing Documents
for a complete understanding of how the Adviser and its affiliates are compensated for advisory
services. The information contained herein is a summary only and is qualified in its entirety by
each applicable Client’s IMA or Governing Documents.
Lower fees for comparable services may be available from other sources.
Investment Advisory Fees. For wealth management services, the annual fee for AFO wealth
management services will be charged as a percentage of assets under management, according to
the following schedule (not to be more than):
Account Value Annual Advisory Fee%
$0 - $10,000,000 1.00%
$10,000,001 - $30,000,000 0.90%
$30,000,000 and above 0.75%
In the Adviser’s discretion, accounts may be charged lower rates than stated in the above fee
schedule and smaller accounts (under $500,000) may be charged a higher fee rate.
Betterment Fees. Betterment generally charges the Adviser’s Clients an asset-based wrap fee on
amounts invested via the Betterment for Advisors platform that is tiered based on the aggregate
balance of all of the Adviser’s client accounts at Betterment (not including funds held in Betterment
Everyday Cash Reserve). That wrap fee ranges from 0.12% to 0.20% of account balances. The
asset-based wrap fee is charged quarterly in arrears. The services included for the wrap fee include
all of the services provided by Betterment and Betterment Securities through the Betterment for
Advisors platform, including advisory services, custody of assets, execution and clearing of
transactions, and account reporting. Betterment collects wrap fees directly from Clients pursuant
to the terms of the sub-advisory agreement between Betterment and each Client. Clients utilizing
the Betterment for Advisors platform may pay a higher aggregate fee than if the advisory, custodial,
trade execution, and other services were purchased separately. The Adviser also pays a fixed
monthly fee to Betterment.
The Adviser pays a platform fee for access to certain technology and administrative services. While
this may create a potential conflict of interest, such arrangements are based on operational
efficiencies and are not tied to specific investment recommendations.
The Adviser charges Clients a fee in addition to the Betterment for Advisors platform fee for assets
held on the Betterment for Advisors platform. Betterment collects both its and the Adviser’s fee
from each Client and remits the Adviser’s portion of the fee directly to the Adviser.
Additional information regarding Betterment’s fees and compensation is described in Betterment’s
Form ADV Part 2A, available on the SEC’s IAPD website at www.adviserinfo.sec.gov.
Ubiquity Advisor Servicing. Ubiquity Retirement + Savings is a 401(k) partner providing
recordkeeping and retirement plan solutions for small business employers and their employees. As
part of its role in retirement plan services, Ubiquity works with plan sponsors and participants to
deliver customized retirement plan options, fiduciary guidance, and administrative support tailored
to the needs of small and mid-sized businesses. The Adviser charges Clients a fee for this platform
based on a one time set up fee and a monthly fee.
Oppenheimer & Co. Inc. AFO may periodically refer clients to Oppenheimer & Co. Inc.
(“Oppenheimer”) that AFO deems appropriate for their retirement plan platform through a referral
agreement AFO has with Oppenheimer. In this capacity, AFO acts as a solicitor for Oppenheimer
and receives compensation for successfully referring clients to Oppenheimer. AFO is compensated
through a percentage of the advisory fee received by Oppenheimer. This is a conflict of interest
because AFO has an economic incentive to refer Clients to Oppenheimer. This conflict of interest
is mitigated by AFO by only referring qualified clients AFO believes will benefit from access to
Oppenheimer’s retirement plan platform.
Fund Fees. The Adviser or its affiliate receives management fee (“Management Fee”) from Funds
between 0.75% and 1% per annum with respect to investors’ invested and committed, but uncalled,
capital contributions as described in each Fund’s respective Governing Documents. The
Management Fee will be appropriately prorated for any period that is less than a full calendar
quarter.
Additionally, the Adviser or its affiliate may be eligible to receive an incentive or performance
allocation from Funds based on a percentage of investment proceeds on distributions (the
“Performance Fee”). Distributions are split between Fund investors and the Adviser or its affiliate
as set forth in Fund’s Governing Documents and generally range between 10% and 20% of such
distributions.
The compensation described above is the Adviser’s typical compensation. However, Management
Fee and Performance Fee rates may be negotiable. The Adviser has the right to enter into
agreements with one or more Fund investors to waive or modify certain terms of the offering of a
Fund’s interests, or certain rights and obligations of the Fund investors, including compensation,
otherwise applicable to such interest(s), in each case without notice to the Fund’s other investors.
Funds will pay their own operating expenses. Such expenses include, but are not limited to, the
Management Fee as well as organizational, legal, accounting, investment administrative and
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