Item 5. Fees and Compensation
A. Advisory Fees and Billing
PORTFOLIO MANAGEMENT SERVICES
BRM Investment Management will assess a management fee (the “Management Fee”) to
provide discretionary and non-discretionary portfolio management services. The
management fee is an annual fee based on a percentage of the client’s assets under
management.
Clients are assessed an annual Management Fee ranging from 0.50% to 2.00% (per
annum). The Management Fee is billed quarterly in advance. The fees are based on the
level of complexity involved in managing the client’s assets.
The Management Fee will be calculated and charged on a quarterly basis, in advance,
based upon the market value of a client’s assets on the last day of the previous quarter,
depending on the amount of assets under management, related accounts, or other
relevant factors.
The payment of fees will be debited from the client’s account in accordance with the IA
Agreement, and are paid by the qualified custodian holding the client’s funds and
securities. Payment of portfolio management fees will be made directly from the client
account by the custodian provided that the following requirements are met:
• The client provides written authorization permitting the fees to be paid
directly from client’s account held by the custodian. The Firm does not have
access to client funds for payment of fees without client consent in writing.
Under certain circumstances and upon request by the client, a direct
bill/invoice will be sent to the client.
• The custodian agrees to provide the client a statement, at least quarterly,
indicating all amounts dispersed from the account including the amount of
the Management Fee paid directly to the Firm.
BRM Investment Management reserves the right to discount fees based on the needs and
circumstances of clients. All of the above-referenced fees are negotiable. Management
Fees and services are separate and distinct from financial planning fees and services.
FINANCIAL PLANNING AND CONSULTING SERVICES
Financial planning and consulting fees are negotiable between the client and BRM
Investment Management; however, BRM Investment Management typically charges an
hourly fee of $250. The hourly fee is negotiable depending on the scope and complexity
of the plan, the client’s situation and objectives. An estimate of the total time/cost will be
determined at the start of the advisory relationship. In limited circumstances, the
time/cost could potentially exceed the initial estimate. In such cases, the Firm will notify
the client and may request that the client approve the additional fee. All consulting fees
are due upon completion of services.
BRM Investment Management may waive or lower these fees where the client has engaged
BRM Investment Management for other advisory services or for such other reasons as
determined by the Firm in its discretion. Clients are not obligated to implement the plan’s
recommendation through any of the Firm’s other investment advisory services. It is
possible that a client of BRM Investment Management may pay more or less for similar
services than may be available through another firm.
B. Other Fees & Expenses
There will be additional fees or charges that result from the maintenance of or trading
within your account. These are fees that are imposed by third parties in connection with
investments made through, and for, your account, including but not limited to, no-load
mutual fund 12(b)-1 distribution fees, certain deferred sales charges on previously
purchased mutual funds, fund level management fees and other fund expenses,
commissions and custody charges imposed by the custodian and IRA and Qualified
Retirement Plan fees.
C. Refund Policy
Clients may request to terminate their IA Agreement, in whole or in part, by providing
advanced written notice. Either party may terminate the IA Agreement by providing
written notice to the other party. In the event of termination, fees are prorated from the
date of last billing to the date of notice of termination. Upon termination of the IA
Agreement, by either party, any prepaid, unearned fees will be promptly refunded, and any
earned, unpaid fees for any unbilled portion of a month will be collected prior to
disbursement of funds.
D. Other Forms of Compensation
The principal owner and Investment Adviser Representatives (“IARs”) of BRM
Investment Management are also insurance agents licensed with the Ohio Department
of Insurance. As licensed insurance agents, our IARs offer life, accident, health,
variable and long-term care insurance-related products to clients. BRM Investment
Management’s IARs may recommend the purchase of certain insurance-related
products on a commission basis. Clients can engage the Firm’s IARs to effect insurance
transactions on a commission basis. The recommendations by the IARs that a client
purchase an insurance commission product presents a conflict of interest, as the
receipt of commissions may provide an incentive to recommend products based on
commissions received, rather than on a particular client’s need. No client is under any
obligation to purchase any commission products through BRM Investment
Management’s IARs. Clients are reminded that they may purchase insurance products
recommended by the Firm’s IARs through other, non-affiliated insurance agents.