Item 5 FEES AND COMPENSATION
ADVISORY FEES FOR INVESTMENT MANAGEMENT SERVICES
For its investment management services, Blume Capital charges an annual fee based on a percentage
of assets under management. Blume Capital’s annual investment management fee is prorated (25%
of total annual fee) and charged quarterly, in advance, based upon the market value of the assets on
the last day of the previous quarter as reflected on the client’s custodian account statement. All assets
in the Account(s) are included in the fee assessment unless specifically identified in writing for
exclusion. For new accounts, Blume Capital charges a fee based on the value of assets placed in the
account, prorated to the portion of the calendar quarter during which the assets were under
management by the Firm. For existing accounts, Blume Capital does not charge or reimburse advisory
fees on intra-quarter additions or withdrawals.
The Firm’s standard fee schedule is as follows:
Value of Account Assets Annual Fee Rate
First $1,000,000 1.00%
Next $1,000,000 0.80%
Over $2,000,000 0.60%
The investment management fee is computed on the last day of each quarter of management by
determining the market value of the client’s account(s) using the following guidelines: (a) for
marketable securities: the current market price provided by the client’s custodian or third party
pricing service; (b) for securities for which there exists no active market (such as real estate, gas and
oil, or other illiquid securities), by using such information as the Firm shall in good faith deem relevant
to determine the value thereof, or in the absence of such information, at cost; and (c) cash or
equivalents, at dollar value. Fees charged are not calculated on the basis of a share of capital gains
upon or capital appreciation of the funds or any portion of the funds of an advisory client (SEC Rule
205(a)(1)). Blume Capital does not seek, nor does it accept, sales fees or commissions of any kind.
The client’s investment management fee to Blume Capital is determined in accordance with the
above standard fee structure, with exceptions negotiated on a case-by-case basis, solely at Blume
Capital’s discretion. Services provided for the above fees are for investment advice and quarterly
reporting of asset holdings, and performance reviews.
Blume Capital generally imposes a $2,500,000 minimum asset requirement however, does not
impose a mandatory fee requirement for opening or maintaining an account.
Fee Dispersion. Blume Capital, in its discretion, may charge a lesser or higher investment advisory
fee, charge a flat fee, waive appliable minimum asset or minimum fee levels, waive its fee entirely,
or charge fee on a different interval, based upon certain criteria (i.e. anticipated future earning
capacity, anticipated future additional assets, dollar amount of assets to be managed, related
accounts, account composition, complexity of the engagement, anticipated services to be rendered,
grandfathered fee schedules, employees and family members, courtesy accounts, competition,
negotiations with client, etc.). 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. ANY QUESTIONS: Blume Capital’s Chief Compliance Officer, Jeffrey V. St.Claire,
remains available to address any questions that a client or prospective client may have regarding
advisory fees.
FEES FOR FINANCIAL PLANNING AND CONSULTING SERVICES
In addition to advising on investments in securities, Blume Capital may, occasionally, advise its
investment management clients with respect to direct real estate investments or other investment or
asset allocation decisions for an hourly fee that typically ranges from $400 to $800 depending upon
the nature of the engagement.
To the extent requested by a client, Blume Capital may also provide financial planning and consulting
services (including investment and non-investment related matters such as estate planning, insurance
planning, etc.) subject to the terms and conditions of a Financial Planning and Consulting Agreement
on a stand-alone separate fee basis. Blume Capital’s fees for these services are negotiable, but
generally range from $2,500 to $7,500 on a fixed fee basis, depending upon the level and scope of the
service(s) required and the professional(s) rendering the service(s).
GENERAL FEE DISCLOSURES
Blume Capital believes its fees are competitive with those fees charged by other investment advisors
for comparable services. However, comparable services may be available from other sources for lower
fees than those charged by Blume Capital.
The client’s fee is determined in accordance with the above fee structure, with exceptions negotiated
on a case-by-case basis at Blume Capital’s discretion. Any deviations from the fee structure are based
upon a number of factors including, but not limited to the amount of work involved, the amount of
assets placed under management anticipated future earning capacity, anticipated future additional
assets, familial relationship, and the attention needed to manage the account.
CUSTODIAN AND BROKERAGE FEES
Clients incur certain charges imposed by their custodians and other third parties such as custodial
fees, deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund
fees, and other fees and taxes on brokerage accounts and securities transactions. Additionally, clients
will incur charges by the executing broker-dealer in the form of brokerage commissions and
transaction fees on the investment transactions entered into for their account(s) to the extent
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