Item 5 - Fees and Compensation
This section provides information concerning fees and compensation for investment advisory
services and programs available through Cadaret Grant. Additional information regarding fees
and compensation for the Contour Program wrap fee offering offered by Cadaret Grant can be
found in the Contour Brochure.
Cadaret Grant and our IARs are compensated for our services by charging an advisory fee.
Advisory fees are typically calculated as a percentage of assets under management. Fees vary
based on the type of advisory service provided to a client. The actual fee is disclosed prior to the
client signing the agreement. The advisory fee is shared between your IAR and Cadaret Grant.
Although platform fees and third-party money manager fees are generally non-negotiable, your
IAR can negotiate his or her advisory fee.
Specific program fees are discussed below. The fee charged can be higher or lower than a
program’s listed fees depending on a client’s unique circumstances. The fee charged by Cadaret
Grant is established in the client’s written agreement with Cadaret Grant. Depending on the
program selected, fees will be billed on a monthly or quarterly basis in advance or arrears. All fees
are specified in the client agreement, which typically authorizes the custodian to directly deduct
the advisory fees from a client’s account.
Certain advisory programs offer the ability to “household” eligible accounts for a lower fee-
schedule. Householding involves aggregating your accounts for fee calculation purposes, which
can help you qualify for a lower fee. A household is generally a group of accounts having the
same address of record or same Social Security number. Households are established through the
IAR and must be requested by the client. Neither Cadaret Grant nor our IARs are responsible for
identifying eligible accounts. A client is responsible for determining if they have eligible accounts
and ensuring those accounts remain eligible. Cadaret Grant and our IARs earn higher fees if
clients elect not to household eligible accounts where available. Clients should discuss the
program fee and any potential fee reduction available through householding with their IAR.
Advisory fees are charged to clients of Cadaret Grant’s various advisory platforms in exchange
for account management, investment advice, consultation, and other advisory services offered
under the platforms. Advisory fees are separate and distinct from fees and charges imposed on
clients by custodians, brokers (including Cadaret Grant), TPIAs, and other third parties, such as
fees charged by managers, transaction fees, custodial maintenance fees, fees and taxes on
brokerage accounts and securities transactions, and underlying mutual fund fees and expenses
paid to mutual funds and other investment product companies. Some common transactions that
include associated processing fees and charges include trading, transfers, distribution of funds,
systematic investments and withdrawals, and mutual fund exchanges. Many different
circumstances can cause fees and charges to vary account by account. Some of these
circumstances include the type of security being traded and dollar amount and/or share quantity
of the trade. Custodial fees vary between custodians and the type of account. For instance, some
types of retirement accounts carry higher custodial maintenance fees than others.
Clients are charged fees for specific account services within a TIMS, TIMS II, or Contour account,
including for: outgoing transfers, wired funds, stop payments, direct registration of securities,
paper statements and confirms, margin extensions, ticket charges, and IRA maintenance and
termination. See “Other Fees and Expenses” below.
The costs associated with an advisory account may be more than the costs associated with a
traditional brokerage account arrangement where a client pays a commission for each transaction
but does not receive ongoing advice, this is particularly true for clients that intend to have a low
number of transactions or follow a buy-and-hold approach. If you intend to follow a buy-and-hold
investment strategy or do not wish to receive ongoing investment advice or management services,
you should consider opening a commission-based brokerage account rather than an advisory
account.
In advisory accounts, a client is paying for ongoing investment advice from an IAR. An IAR
recommending an advisory account to a client receives a portion of the advisory fee as a result of
the client’s participation in an advisory program. In some circumstances, this compensation will be
more than what the IAR would receive if the client had a brokerage account through Cadaret Grant.
If compensation would be more in recommending an advisory account than a brokerage account,
an IAR has a financial incentive to recommend advisory programs or services over brokerage
programs or services. Notwithstanding that conflict of interest, Cadaret Grant and our IARs take
their responsibility to clients seriously and will recommend an advisory program or service to a
client only if it is reasonably believed to be in the client’s best interest.
The amount of compensation an IAR can receive varies between advisory programs and services,
therefore, an IAR has a financial incentive to recommend an advisory program or service that
permits the IAR to charge higher compensation over another advisory program or service where
the IAR’s level of compensation is less. Recommendations for specific advisory programs or
services are made based on an IARs best judgment based on the information a client provides to
the IAR.
In most circumstances, IARs are also registered representatives with Cadaret Grant and, as such,
may act in a broker-dealer capacity. In such capacity, an IAR may sell securities through Cadaret
Grant and receive normal and customary commissions as a result of purchases and sales as well
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