Item 5 – Fees and Compensation
Our fees are based upon a percentage of assets under management. The fee rates are stated
annually but billed and paid quarterly—1/4 of the annual rate is applied to quarterly billings.
Balanced and Equity Accounts (Includes Annual Rate
balanced and equity MAP and GPS accounts)
First $3 million of assets under management 1.00%
Next $2 million 0.75%
Next $5 million 0.50%
Over $10 million 0.40%
Minimum Annual Fee: $10,000
Fixed Income Accounts (Includes fixed Annual Rate
income MAP and GPS accounts)
First $1 million of assets under management 0.75%
Next $4 million 0.50%
Next $5 million 0.40%
Over $10 million 0.25%
Minimum Annual Fee: $10,000
Cadinha Institutional (management) Annual Rate
First $5 million of assets under management 1.00%
Next $5 million 0.70%
Form ADV 2A Cadinha & Co., LLC
Over $10 million 0.50%
Minimum Annual Fee: $50,000
Cadinha Institutional (consulting and other) Annual Rate
Total assets under management 0.10%
Minimum Annual Fee: $100,000
For the initial invoice to a client, fees are prorated for the remaining calendar quarter based on the
account value at the inception of our management. Thereafter, fees are billed 90 days in advance
based on the account value as of the last day of the calendar quarter (March 31, June 30,
September 30, and December 31). In certain situations, we may negotiate rates or terms other
than what is specified above.
Clients may elect to have our fees deducted from their accounts custodied at their brokerage,
bank, or custodian. Clients with this arrangement receive quarterly notices stating the fees were
submitted to and deducted directly from their custodied account.
Our services may be terminated by either party at any time with written notice. If a client
terminates our services before the end of a calendar quarter, that client will receive a refund for
the “unused” portion of fees paid in advance. The refund amount shall be prorated to the date
specified in the termination notice. There are no penalties for cancellation or termination of our
services.
Though not charged by or paid to Cadinha & Co., clients incur other costs in conjunction with our
management. Clients pay brokerage fees and may pay custody fees to a brokerage and/or bank,
the rates and amounts of which are determined by the brokerage or bank that clients choose. We
are not a bank or brokerage and we provide no custody services. The custodial broker or bank
may levy charges to clients for the investment transactions affected as a result of our
management. Please see Item 12 – Brokerage Practices for more information on our approach to
clients’ brokerage and custody options.
We often hold securities for investment in client accounts that may involve other fees to clients.
These fees are generally deducted from the net asset value of the securities held by the client.
Such securities include:
- Exchange-traded funds and exchange-traded notes
- Money market funds
- REITs
- Mutual funds
These types of securities assess management fees that are reflected in the product’s internal
expense ratio and are separate from and in addition to the advisory fees we charge. The rate,
amount, and frequency of fees a client will ultimately incur from these securities are contingent
on which securities we invest in and the amount invested.
Neither Cadinha & Co. nor any of its employees receive any compensation for recommending
any particular investment strategy, including the sale of securities or other investment products.
We receive no commissions from any client or third-party.
Form ADV 2A Cadinha & Co., LLC
Important Information for Retirement Investors
When we recommend that clients roll over retirement assets or transfer existing retirement assets
(such as a 401(k) or an IRA) to our management, we may have a conflict of interest. This is
because we will generally earn additional revenue when we manage more assets. In making the
recommendation, however, Cadinha & Co. will do so only after determining that the
recommendation is in the client’s best interest. Further, in making any recommendation to
transfer or roll over retirement assets, we do so as a “fiduciary,” as that term is defined in ERISA
or the Internal Revenue Code, or both. We also acknowledge we are a fiduciary under ERISA or
the Internal Revenue Code with respect to our ongoing investment advisory recommendations
and discretionary asset management services, as described in the advisory agreement we execute
with clients. To the extent we provide non-fiduciary services, those will be described in the
advisory agreement.