Item 5. Fees and Compensation
Description
Generally, the Advisor bases its fees on a percentage of AUM. The Advisor and Client may
agree on services outside of the wealth management agreement.
Wealth Management Fees
Generally, in a dual contract arrangement, fees payable to the Advisor for wealth
management services will range between 50 basis points and 100 basis points (annualized)
multiplied by the total assets managed by the Advisor, payable quarterly in arrears. The
Client would also be responsible for fees due the investment manager[s] with whom they have
contracted with. (See “Other Fees” below).
For Clients who have entered a single contract arrangement, fees are only payable to the
Advisor for wealth management services generally range between 65 basis points and 125
basis points, payable quarterly in arrears.
The Advisor’s fees may vary, depending on the Client's circumstances (such as account size,
complexity, relationship to other accounts, and investment strategies and managers
employed, etc.).
Financial Planning Services
Generally, financial planning services are part of the Advisor’s wealth management service.
However, Clients may engage the Advisor to construct a financial plan where such a plan
represents a depth and breadth beyond normal financial planning services. Such fee is
negotiable and will be assessed as a percent of assets or fixed fees.
Family Office Services
Each agreement between the Advisor and the Client for family office services is negotiated
based on the size, complexity and breadth of each Client’s needs. Generally, such fees will
be based on a percentage of AUM but may also be or include a fixed fee for services where a
percentage fee on assets would not be appropriate.
Private Funds
CWM may receive a fee for providing investment advisory to CWM Funds and non-investment
advisory services to Private Funds. Non-advisory services may include activity relating to fund
administration, distribution and/or investor services. Such fee will be set-forth in each Private
Fund’s Operating Agreement. CWM may also receive reimbursement for certain expenses it
occurs relating to the organization and distribution of Private Funds, pursuant to the provisions
of each Private Fund’s offering documents.
Other Services Fees
Upon mutual agreement between the Advisor and the Client, the Advisor will engage in
advisory and non-advisory services not discussed in this document, where such fees will be
negotiated.
ERISA Accounts
CWM is deemed to be a fiduciary to advisory Clients that are employee benefit plans or
individual retirement accounts (“IRAs”) pursuant to ERISA, and regulations under the Internal
Revenue Code. As such, CWM 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.
Fee Billing
Generally, fees are billed quarterly, in arrears, meaning that the Advisor invoices Clients after
each three-month billing period has occurred. Payment in full is expected upon invoice
presentation. Fees based on the market value of the Client’s assets are as of their value on
the last day of the quarter. Fees are usually deducted from a designated Client account[s] at
the custodian to facilitate billing. The Client must consent in advance to direct debiting of their
investment account[s].
Fees assessed on a fixed basis are billed in arrears for work completed.
Clients are advised that all fees paid to the Advisor are separate and distinct from the fees
and expenses charged by investment managers, investment funds and custodians
recommended to Clients by the Advisor. The Client is responsible for all securities execution
and custody fees charged by the Custodian, if applicable. Certain Custodians do not charge
securities transaction fees for ETF and equity trades in a Client's account, provided that the
account meets the terms and conditions of the Custodian's brokerage requirements.
However, the Custodians typically charge for mutual funds and other types of investments.
Clients for which investments in Private Funds may be appropriate (e.g., real estate
partnerships, private equity funds and/or hedge funds) will normally be charged a
management fee and other fees and expenses by the Private Fund. In addition, investment
managers of these Private Funds may also charge a performance fee, once the private fund
exceeds a target rate of return.
Past due Accounts and Termination of Client Agreements
The Advisor reserves the right to stop work on any account where fees due to the Advisor are
more than ninety (90) days overdue. In addition, the Advisor reserves the right to terminate
any financial planning engagement where a Client has willfully concealed or has refused to
provide pertinent information about financial situations when necessary and appropriate, in
the Advisor’s judgment, to providing proper financial advice.
A Client may terminate their agreement with the Advisor within five (5) business days of
signing their agreement without incurring any advisory fees. Furthermore, the Client or the
Advisor may terminate their agreement at any time, upon thirty (30) days written notice to the
other party.
Upon notice of termination from the Client, the Advisor will await further instructions from the
Client as to when and how Client requests to liquidate and/or transfer the portfolio and remit
the proceeds. Upon instructions received, the Advisor will instruct the Client’s investment
manager, brokers, dealers, mutual fund sponsors and others to liquidate and/or transfer the
portfolio and remit proceeds to the Client. The Client will be invoiced for any investment
management fees earned by the Advisor up to and including the effective date of termination.
The Advisor can make no representation regarding puts, holds or other investment features
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