Item 5 – Fees and Compensation
The following paragraphs detail the fee structure and compensation methodology for services provided
by the Advisor. Each Client shall sign an advisory agreement that details the responsibilities of AAM
and the Client.
A. Fees for Advisory Services
AAM charges either an annual retainer fee or an asset-based fee for its services. AAM's fees are
negotiated, based on factors such as the range of services to be provided, the degree of customization
requested, the complexity of a Client relationship, the number, nature and size of accounts, and the
number of Client meetings AAM is expected to attend annually.
AAM’s current fee schedule is as follows:
• Annual Retainer Fee – negotiable but minimum prepayment of fee for earned services to be
rendered is $2,500 per quarter billed quarterly in advance. The minimum fee will not exceed
2.00% of assets under management.
• Asset Based Fees:
o Up to 1.00% of first $10 million of net asset subject to the advisory relationship – billed
quarterly in advance.
o In excess of $10 million – negotiable.
• Expenses:
o Two Client meetings per year are included in the fee Expenses of additional meetings
and other extraordinary expenses are determined after considering many factors, such as
the level and scope of the services.
The investment advisory fee in the first quarter of service is prorated from the inception date of the
account[s] to the end of the first calendar quarter. Fees may be negotiable at the sole discretion of the
Advisor. The Client’s fees will take into consideration the aggregate assets under management with the
Advisor. All securities held in accounts managed by AAM will be independently valued by the
Custodian. AAM will conduct periodic reviews of the Custodian’s valuations to ensure accurate billing.
Atrato Asset Management LLC
1163 Rose Creek Road, Pullman, WA 99163
Phone: (505) 310-1783
The Advisor’s fee is exclusive of, and in addition to, any applicable securities transaction fees, and
other related costs and expenses, described in Item 5.C, which may be incurred by the Client. However,
the Advisor shall not receive any portion of these commissions, fees, and costs.
For purposes of determining value, securities and other instruments traded on a market for which actual
transaction prices are publicly reported will be valued at the last reported sale price on the principal
market in which they are traded (or, if there are no sales on such date, then at the mean between the
closing bid and asked prices on such date) and other readily marketable securities and other instruments
will be priced using a pricing service or through quotations from one or more dealers. All other assets
will be valued at cost unless and until a subsequent event establishes a new valuation for the asset (e.g.,
a subsequent offering of the same security is made at a different price, etc.) or until the asset is valued
by a third party. In the case of such a subsequent event or third-party valuation, the value of such assets
will be adjusted to reflect the value established by the subsequent event or valuation.
B. Fee Billing
Investment advisory fees will be calculated by the Advisor and deducted from the Client’s account[s]
by the Custodian. The Advisor shall send an invoice to the Custodian indicating the amount of the fees
to be deducted from the Client’s account[s] at the respective quarter start date. The amount due is
calculated by applying the quarterly rate (annual rate divided by 4) to the total assets under
management with AAM at the end of each quarter. In addition, the Advisor will send the Client a
written invoice, including the fee, the formula used to calculate the fee, the fee calculation itself, the
time period covered by the fee, and, if applicable, the amount of assets under management on which the
fee was based, and for Clients charged a performance fee, the fee invoice will also include the Client’s
cumulative net investment gain (or loss), and the amount of cumulative net investment gain above
which the Advisor will receive performance compensation. Also, the Advisor will include the name of
the Custodian(s) on the fee invoice. The Advisor will send these to the Client concurrent with the
request for payment or payment of the Advisor’s investment advisory fees. Clients will be provided
with a statement, at least quarterly, from the Custodian reflecting deduction of the investment advisory
fee. The Advisor urges the Client to verify the accuracy of these fees as listed on the Custodian’s
brokerage statement to those listed on the Advisor’s invoice as the Custodian does not assume this
responsibility. Clients provide written authorization permitting advisory fees to be deducted by AAM to
be paid directly from their accounts held by the Custodian as part of the investment advisory agreement
and separate account forms provided by the Custodian.
C. Other Fees and Expenses
Clients may incur certain fees or charges imposed by third parties, other than AAM, in connection with
investments made on behalf of the Client’s account[s]. The Client is responsible for all securities
execution and custody, fees charged by the Custodian, if applicable. The Advisor's recommended
Custodian does not charge securities transaction fees for ETF and equity trades in a Client's account,
provided that the account meets the terms and conditions of the Custodian's brokerage requirements.
However, the Custodian typically charges for mutual funds and other types of investments. The
investment advisory fee charged by AAM is separate and distinct from these custody and execution fees
and AAM does not receive any portion of these fees.
Atrato Asset Management LLC
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