Item 5 – Fees and Compensation
Fee Schedule
Separately Managed Accounts
Our standard investment management fee for separately managed accounts is 1.00%. All fees
are negotiable at the Adviser’s discretion. Fees are payable quarterly in arrears based upon
the daily average balance of your account for the previous quarter, excluding any cash held in
the account.
SMArtX
Those clients on the SMArtX platform will pay a .16% to 0.2% annual fee, depending on the
advisor’s tiered rate in effect for each billing period, and any individual model fees, in addition
to CCIM’s annual 1% asset management fee. The SMArtX fee will be billed monthly and
debited quarterly in arears from the client’s custodial account.
Private Fund Accounts
Clients who invest in the Funds will pay a 1% annual management fee. The management fee
will be billed payable quarterly in arrears based upon the ending net asset value (”NAV”) of
the Fund. In addition to the 1.00% management fee, we may also charge a 10% performance
allocation fee to qualified clients on the capital appreciation in the customized portfolio.
In addition to the fees charged by Chapwood, the manager to the funds will charge a
management fee to each Fund for the services provided to the Funds. Please refer to the
offering documents of each fund for a complete description of the investment objectives, risks
and fees associated with an investment in the Funds.
Fee Payment Options
As indicated in our advisory agreement with you, there are two options you may select to pay
for our services:
• Direct debiting (preferred): at the inception of the relationship and each quarter
thereafter, we will notify your custodian of the amount of the fee due and payable to
us through our fee schedule and contract. The custodian does not validate or check
the calculation of our fee. They will “deduct” the fee from your Account(s) or, if you
have more than one account from the account you have designated to pay our advisory
fees.
o Each month, you will receive a statement directly from your custodian showing
all transactions, positions and credits / debits into or from your account; the
statements after the quarter end will reflect these transactions, including the
advisory fee paid by you to us.
• Pay-by-check: At the inception of the Account and each quarter thereafter, we issue
you an invoice for our services and you pay us by check or wire transfer within 15 days
of the date of the invoice.
Advisors trade on margin for client’s accounts, when consistent with the client’s suitability
profile and risk tolerance or at the client’s directive. This could result in a high portfolio
turnover ratio and higher transaction charges in accounts with such charges. Additionally, the
use of margin results in interest charges as well as all other fees and expenses associated with
the security or account involved.
Fees are calculated using the total assets in the account as shown on the client custodial
statement, including any assets purchased on margin. If there is a net debit cash balance in
the account as a result of using margin, the cash balance will be excluded from the fee
calculation. Net positive cash balances in type 1 (cash account) and type 2 (margin account)
are included in the fee calculation.
Additional Fees and Expenses:
Advisory fees payable to us do not include all the fees you will pay when we purchase or sell
securities for your Account(s). The following list of fees or expenses are what you pay directly
to third parties, whether a security is being purchased, sold or held in your Account(s) under
our management. Fees charged are by the broker dealer / custodian.
We do not receive, directly or indirectly, any of these fees charged to you. They are paid to
your broker, custodian or other investment you hold. The fees include:
• Brokerage commissions;
• Transaction fees;
• Exchange fees;
• SEC fees;
• Advisory fees and administrative fees charged by Exchange Traded Funds (ETFs)
• Advisory fees charged by sub-advisers (if any are used for your account);
• Custodial Fees;
• Deferred sales charges;
• Odd-Lot differentials;
• Transfer taxes;
• Wire transfer and electronic fund processing fees;
• Commissions or mark-ups / mark-downs on security transactions;
• Among others that may be incurred.
You have the option to purchase investment products that we recommend through other
brokers or agents that are not affiliated with us.
If you have assets invested with SMArtX, in addition to our advisory fee, you will pay SMArtX
a platform fee and advisory fee as well. Please review the SMArtX ADV Part 2 and/or
disclosure documents for the exact fees charged.
In addition to the Chapwood Investment Management Agreement you will also complete the
required custodial documentation, and if applicable, sign an Investment Management
Agreement with SMArtX Advisory Solutions (SMArtX). SMArtX is an asset management
platform that allows access to our broker dealer. SMArtX charges a platform fee of up to .2%
in addition to the fee you will be charged by Chapwood. The exact amount you will be billed
will be noted in your actual Investment Management Agreement.
In addition, we do not have any person associated with us who receives (directly or
indirectly) any compensation from the sale of securities or investments that are purchased or
sold for your account. As a result, we are a “fee only” investment adviser. We do not have any
potential conflicts of interest present that relate to any additional compensation from you or
your assets that we manage.