Item 5 – Fees and Compensation
A. Fee Schedule.
1. Investment Supervisory Services or Portfolio Trading and Administration Services. The annual fee for
investment supervisory services, as well as portfolio trading and administration services, will be charged as
a percentage of assets under management, according to the schedule below:
Assets Under Management Annual Fee (%)
First $1 million 1.00%
Next $1-3 million 0.90%
Next $3-5 million 0.80%
Next $5-10 million 0.60%
Amounts above $10 million 0.50%
Although BDF does not require a minimum dollar value of any account to which it provides advisory
services, each client will be charged a minimum annual fee of $10,000 ($2,500 quarterly). If a client maintains
less than $1 million of assets under BDF’s management and pays the $10,000 annual minimum fee, he or she
will pay a higher percentage annual fee than shown in the above fee schedule.
BDF, in its sole discretion, may charge a lesser investment advisory fee, waive its annual minimum fee,
charge a flat fee, or waive its fee entirely based upon certain criteria (e.g., anticipated future earning
capacity, anticipated future additional assets, dollar amount of assets to be managed, related accounts,
account composition, complexity of the engagement, grandfathered fee schedules, BDF employees and
family members, courtesy accounts, competition, negotiations with client, etc.). Clients who have assigned
their advisory contracts with Balasa & Hoffman, Inc. (B&H) and Dinverno & Foltz Financial Group, Ltd. (DFFG)
to BDF may have previously negotiated fee schedules that deviate from the above schedule. Accounts in the
BDF Catalyst Program are charged 1.25% for the first $800,000. Once client assets reach $800,000, amounts
between $0 to $1 million will be charged a flat $2,500 per quarter. Once client assets reach $1 million, they
are subject to the fee schedule described above and will remain on the standard client fee schedule even if
assets in the account drop below $1 million. Clients who are referred to BDF from CI Financial may have fee
schedules that deviate from the above schedule. As a result, BDF clients could be subject to various different
fee schedules and/or arrangements, including those that may be higher or lower than BDF’s fee schedule set
forth in Item 5. Any grandfathered fee schedules and/or arrangements shall be confirmed by BDF in the
Client Service Agreement executed by the client upon the engagement of BDF. As result of the above,
similarly situated clients could pay different fees. In addition, similar advisory services may be available from
other investment advisers for similar or lower fees.
BDF considers cash to be an asset class and bills on cash accordingly. Depending on market conditions
and interest rates, the yield on cash investments could be less than BDF’s fee. Accounts with margin balances
will be billed based on the total gross value of assets under management. BDF’s Chief Compliance Officer,
Susan C. Korin, remains available to address any questions that a client or prospective client may have
regarding advisory fees.
2. Fee Billing Aggregation. From time to time and at the sole discretion of BDF, it may allow the
aggregation of “family assets” under management for fee billing purposes. The purpose of the aggregation
is to achieve a potentially lower advisory fee per the BDF fee schedule. “Family assets” shall generally include
the assets of parents, their children, and their children’s children (subject to modification at the exclusive
discretion of BDF) to include additional family members. In the event that a spouse of a child divorces the
family member, the assets of the former spouse shall generally (subject to modification at the exclusive
discretion of BDF) no longer be included for fee billing aggregation purposes. Regardless of fee billing
aggregation, the assets of family members shall not be combined for reporting purposes, nor shall they be
disclosed to any other family member without the express prior written authorization from the disclosing
family member to BDF. The above policy is subject to termination or modification, at any time, and for any
reason, at the exclusive discretion of BDF.
3. Written Client Service Agreement. Prior to engaging BDF to provide investment management services,
the client shall enter into a formal Client Service Agreement (“CSA”) with BDF setting forth the terms and
conditions under which BDF shall manage the client’s assets, and a separate custodial/clearing agreement
with each designated broker-dealer/custodian. The CSA between BDF and the client will continue in effect
until terminated by either party for any reason by written notice in accordance with the terms of the CSA.
Neither BDF nor the client may assign the CSA without the prior consent of the other party. Transactions
that do not result in a change of actual control or management of BDF shall not be considered an assignment.
A copy of BDF’s written firm brochure, Form ADV Part 2A (or equivalent), shall be provided to each client
prior to or contemporaneously with the execution of the CSA.
4. Financial Planning Services. When BDF provides financial planning services to an investment
management client, the Firm does not charge an additional fee for such services unless BDF determines the
client requires extraordinary financial planning or consultation services. When BDF determines the client
requires extraordinary financial planning or consultation services, the Firm may determine to charge for such
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