ITEM 5: FEES AND COMPENSATION
A. INVESTMENT ADVISORY SERVICES
If a client engages ClearRock to provide discretionary or non-discretionary investment
advisory services on a fee only basis, ClearRock’s negotiable annual investment advisory fee
will be billed quarterly in advance based upon a percentage (%) of the market value and type
of assets placed under ClearRock’s management (between negotiable and 1.00%) as follows:
Equity and Balanced Accounts:
Market Value of Household Assets Fee Based on % of Assets**
On the first $2,000,000 1.00%
On the next $3,000,000 0.75%
On the next $5,000,000 0.50%
On the next $10,000,000 0.40%
Over $20,000,000 Negotiable
Fixed Income Accounts (accounts comprised entirely of fixed income securities):
Market Value of Household Assets Fee Based on % of Assets**
On the first $5,000,000 0.375%
On the next $5,000,000 0.25%
Over $10,000,000 Negotiable
** All client fees are negotiable but will not exceed the fee table above; however, ClearRock
may charge a minimum management fee of $2,500 that could effectively be higher than the
fee that would be generated using our standard fee schedule above. This would generally
apply to client relationships that are under ClearRock’s stated minimum asset level. The
presence of a minimum fee would be fully disclosed to the client prior to signing an investment
advisory agreement with ClearRock. Alternatively, ClearRock, in its sole discretion, may
charge a lesser advisory fee and/or waive or modify its minimum asset level based upon
certain criteria (i.e. anticipated future earning capacity, anticipated future additional assets,
dollar amount of assets to be managed, related accounts, account composition, negotiations
with client, etc.).
Please Note: Fixed Income accounts are accounts that are comprised entirely of fixed income
securities. All other accounts (those comprised of all equities or both equities and fixed
income) will be billed quarterly under the fee schedule for Equity and Balanced Accounts.
As discussed below, unless the client directs otherwise or an individual client’s circumstances
require, ClearRock will generally recommend that Charles Schwab and Co., Inc. (“Schwab”)
serve as the broker-dealer/custodian for client investment management assets. Broker-
dealers such as Schwab charge brokerage commissions and/or transaction fees for effecting
certain securities transactions (i.e. transaction fees are charged for certain no-load mutual
funds, commissions are charged for individual equity and fixed income securities
transactions). In addition to ClearRock’s investment advisory fee, brokerage commissions
and/or transaction fees, clients will also incur, relative to all mutual fund and exchange traded
fund purchases, charges imposed at the fund level (e.g. advisory fees and other fund
expenses).
B. FINANCIAL PLANNING CONSULTING SERVICES
To the extent specifically requested by a client, ClearRock may provide financial planning and/or
consulting services (including investment and non-investment related matters, including estate
planning, insurance planning, etc.) on a stand-alone fee basis. ClearRock’s planning and
consulting fees are negotiable, but generally range from $1,500 to $3,000 on a fixed fee basis,
depending upon the level and scope of the service(s) required and the professional(s) rendering
the service(s). Fees are payable upon completion of negotiated services and no advanced
retainer may be required.
C. RETIREMENT PLAN CONSULTING SERVICES
ClearRock provides non-discretionary pension consulting services, pursuant to which it assists
sponsors of self-directed retirement plans and defined benefit plans with the selection and/or
monitoring of investment alternatives (generally open-end mutual funds) from which plan
participants will choose in self-directing the investments for their individual plan retirement
accounts. In addition, to the extent requested by the plan sponsor, ClearRock will also provide
participant education designed to assist participants in identifying the appropriate investment
strategy for their retirement plan accounts. ClearRock charges a negotiable annual fee for
Retirement Consulting Services which generally range from 0.15% to 1.00% of plan assets
depending on the services requested and the size of the plan. Fees may be collected in advance
or arrears on a quarterly basis, as determined by the plan sponsor.
ClearRock is deemed to be a fiduciary to clients that are defined contribution plans or individual
retirement accounts (IRAs) pursuant to the Employee Retirement Income and Securities Act
(“ERISA”). As such, our firm is subject to specific duties and obligations under ERISA and the
Internal Revenue Code that include among other things, restrictions concerning certain forms of
compensation. To avoid engaging in prohibited transactions, ClearRock may only charge fees for
retirement/consulting services about products for which our firm and/or our related persons do
not receive any commissions, 12b-1 or sub-TA fees.
D. BUSINESS CONSULTING SERVICES
ClearRock may determine to provide business consulting services (including investment and non-
investment related matters) on a stand-alone flat fee. Before engaging ClearRock to provide
business consulting services, clients are generally required to enter into a Consulting Agreement
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