Item 5 - Fees and Compensation
Fees for Investment Advisory Services
For all types of our Clients, those with Discretionary Mandates as well as those with Non-
Discretionary Mandates, BFI is compensated with a fee that is based on a pre-specified percentage
of the value of Client assets placed under management with BFI. Under certain circumstances a
Performance Fee may apply. Please refer to Section 6 for more information on Performance Fees.
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Standard Annual Rates for Discretionary Mandates
The standard annual fees for Discretionary Mandates range from 0.65% to 1.20% of assets under
management. Certain investment strategies result in a higher level of work and analysis than others.
The actual fee package applied to Discretionary Mandates will depend on (1) the volume of assets
placed in the respective Mandate and (2) the investment strategy chosen by the Client. A fixed
minimum fee per Mandate would apply. BFI reserves the right to negotiate fees with the Client that
deviate from the standard fees.
Standard Annual Rates for Non-Discretionary Mandates
The standard annual fees for Non-Discretionary Mandates range from 0.80% to 1.50% of assets
under management. Certain investment strategies result in a higher level of work and analysis than
others. The actual fee package applied to Non-Discretionary Mandates will depend on (1) the volume
of assets placed in the respective Mandate and (2) the investment strategy chosen by the Client. A
fixed minimum fee per Mandate would apply. BFI reserves the right to negotiate fees with the Client
that deviate from the standard fees.
Investment Advisory Fees applicable to VIP and AA Funds
Under the investment management agreement between BFI and each of the VIP and AA Funds it
advises, BFI receives an annual investment management fee, and depending upon the individual
fund governing documents, BFI may also receive a performance fee, if applicable. The specific
management fee applicable to each VIP and AA Funds, as well as the frequency of the payment, are
set forth in the applicable Fund Offering documentation.
Some of the VIP and AA Funds are formed as so-called “fund-of-funds” (i.e. funds that invest in a
portfolio of other funds). Investors in such fund-of-funds are advised that the respective VIP and AA
Funds encounter a second layer of costs.
Investment Advisory Services Fee Invoicing
The aforementioned fees are generally charged directly to the Client’s Custodian Bank account. As
part of the Mandate, the Client authorizes BFI to send an invoice to the Client’s Custodian Bank(s) for
payment of the investment advisory fee.
The fees are generally charged in the Mandate’s reference currency, quarterly in arrears and
calculated on the basis of the average value of the assets under management for each particular
quarter, as calculated by our portfolio management system.
Whenever there is insufficient liquidity in the Mandate’s reference currency to cover fees, the
required liquidity will be created either by converting cash from a different currency available in the
portfolio, or by liquidating one or more securities to the extent needed to cover such fees. This
process generates additional costs for the Mandate.
The Mandate can be terminated by the Client without penalty at any time and in line with the notice
period, if any, and as described in the Mandate Terms and Conditions.
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For clients resident in Switzerland and Liechtenstein, fees are subject to Swiss VAT at the rates in
force at that time.
Other Types of Fees or Expenses
Other Compensation for Advisory Services
The aforementioned fees cover exclusively BFI’s investment Advisory Services. BFI takes no other
fees for its investment Advisory Services unless agreed otherwise with the Client.
Also, due to the volume of business that BFI does with a number of Custodian Banks and broker-
dealers (‘Preferred Institutions’), BFI’s Clients generally benefit from special terms and arrangements
with those institutions.
With some “Preferred Institutions” BFI Clients receive “All-in fees”. All-in fees refer to an arrangement
between the Client and the Custodian where the Custodian Bank charges a pre-agreed annual fee
that generally covers all of the Preferred Institution’s custody, transaction and brokerage fees. Third-
party brokerage fees are not included in the Custodian’s All-in fee and are therefore charged
separately and on top of the All-in fees. BFI Investment Advisory Fees are separate and distinct from
the Custodian’s “All-in fees”. BFI will, in any case, strive to obtain competitive All-in fees from the
Custodians for its Clients. No commissions (so-called “retro-cessions”) are paid by the Custodians to
BFI.
BFI is not registered as a securities broker-dealer. Therefore, BFI does not provide any securities
brokerage services, and neither BFI nor its Supervised Persons charge Clients any transaction-based
fees or accept compensation for the sale of securities. Brokerage commissions, transaction fees,
custodian fees, and other related costs and expenses which may be incurred by the Client under the
Mandate are exclusive and in addition to BFI’s Advisory Services fees, and agreed upon by the Client
and the Custodian Bank directly.
Third-Party Fees, Cost and Taxes
Clients may incur third-party charges such as stamp duties, taxes, commission charges, currency
exchange charges and other fees charged by third-party entities or regulatory authorities.
Third-party brokers charge fees to execute securities transactions or commissions when acting as
agent, or they charge a mark-up on transactions when acting as principal. Mutual funds and
exchange traded funds may charge up-front fees and internal management fees, which are generally
disclosed in the fund prospectus.
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