Item 5 Fees and Compensation
INVESTMENT SUPERVISORY SERVICES ("ISS")
INDIVIDUAL PORTFOLIO MANAGEMENT FEES
The annualized fee for Investment Supervisory Services is charged as a percentage of assets
under management, according to the following schedule:
The higher of:
• 1% of the first $2 million under management, plus
• 0.75% of assets between $2 million and $5 million under management, plus
• 0.5% of all assets under management above $5 million, or
• $10,000 minimum annual fee
For certain legacy arrangements, clients may be assessed the fee rate of an immediate family
member, as outlined in the Client’s executed agreement.
Fees are assessed quarterly in arrears. Briaud charges no advance or upfront fees. With the
client’s permission, fees will be deducted directly from the client’s accounts. Each quarterly fee
is calculated based on the fair market value of the assets under management on the last day of
the quarter. Accurate values are obtained in the following manners:
Automatic Downloads
Briaud subscribes to automatic downloads of prices and portfolio data from Charles
Schwab, National Advisors Trust, Fidelity, and TIAA. Portfolio values in Briaud’s
database are updated daily and reconciled daily against those received in the download.
If there is ever a conflict between price sources, the Charles Schwab price feed is used.
Manual Downloads – Market Prices Readily Available
For securities held at custodians other than those providing an automatic download,
Briaud must update portfolio values based on market data provided through other
sources. At present, these are sourced daily from Monex for gold pricing,
Vanguard/TIAA for pricing of annuity products offered by them, and Yahoo! Finance for
prices of public securities for which Briaud doesn’t receive an automated feed from
custodians.
Note: Vanguard variable annuity portfolios and Vanguard 529 portfolios are updated
using prices sourced directly from the fund provider’s website.
Manual Valuation – Market Prices Not Readily Available
Some securities held at custodians other than those providing an automatic download
are not available through custodian price downloads or other electronic price
information providers. This is often the case with annuities or funds proprietary to a
certain employer retirement plan.
Where no alternative source of pricing information is available, Briaud will rely on client-
provided account statements for pricing and valuation information. Values in Briaud’s
portfolio database will be updated as of the most recently provided statement date.
Manual Downloads – Market Prices Not Readily Available
If a security does not trade on an exchange, but indicative prices are available for
download, Briaud must decide which source to use for valuation purposes. Wherever
possible, Briaud will defer to the custodian on valuation methodology, in hopes that
Briaud’s database will match paper statements distributed to clients.
When such a decision is made, impacted clients will be informed of the information
source Briaud intends to use.
Note: The only security held by clients under this category is the Gold South African
Krugerrand. Depending on client preferences, these are custodied at the brokerage firm
American Century, or by the clients themselves.
Manual Valuation – No Liquid Market Exists
In the case of limited partnerships or similarly-structured investments, the day to day
price is not readily known. In these cases, Briaud will update stored values manually,
based on the following principles:
• Valuation data provided by the fund providers will be the primary source of
information
• Where several valuation methods are provided by the fund, Briaud will favor that
which has been approved by an independent auditor
• Where multiple valuations exist, and the above criteria are not sufficient to choose
one, Briaud will review the underlying assumptions and choose the most reasonable
valuation
• Values will be updated as of the date Briaud receives the information from the fund
provider. For example, if year-end data is supplied in an annual report mailed in
March, the price will be updated as of March
• Between updates from fund providers, Briaud will update security values throughout
the year as capital is paid out of each fund. These return of capital payments reduce
the value of the held security. If no such payments of invested capital take place,
the valuation will remain the same until new information is made available by the
fund provider.
• As of 2023 any new alternative investments will be held at fair value as reported by
the investment/fund administrator.
Updates will be made to Briaud portfolio systems as soon as they are received from
fund managers.
The annual fee for investment management services provided are based upon a percentage (%)
of the market value of the Assets under management in accordance with the fee schedule in
the Agreement signed by the Client. Briaud Financial Advisors considers cash to be an asset
class and part of Assets under management and subject to the same fee calculation as the
Client’s non-cash investments.
A minimum of $1,000,000 of assets under management is required for our services. This
account size may be negotiable under certain circumstances. Briaud Financial Advisors may
group certain related client accounts for the purposes of achieving the minimum account size
and determining the annualized fee.
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