Item 5 – Fees and Compensation
Compensation and fees for individually managed accounts
Our compensation for individually managed accounts is specified in our agreement with the relevant
client. We charge fixed fees that we determine on a case-by-case basis after taking into account a
variety of factors, such as the amount of client assets we have agreed to manage, and the variety and
complexity of the services we are providing Legacy clients pay the asset-based strategy fee that is
specified in their client agreements with us. Our fees are potentially subject to negotiation.
For certain clients, we charge an advisory fee for services provided with respect to the held-away
accounts mentioned above in Item 4, just as we do with client accounts held at our primary custodians.
NorthCoast Asset Management Disclosure Brochure
The specific fee schedule charged by us is provided in the client’s investment advisory agreement with
us.
General Compensation Provisions
Generally, NorthCoast charges management fees on a quarterly basis in arrears as provided in the
investmentadvisory agreement. The fees are based on the net assets in the client's account as of the
last business day of each calendar quarter. For purposes of calculating each such management fee, the
net assets in a client's account are determined before reduction of the management fee and accruedor
payable as of the calculation date and before any additions or withdrawals. Cash, accrued interest and
the value of securities purchased on margin are included for billing purposes, unless the Firm
determines otherwise, in its discretion.
If a client withdraws all or part of its funds under management, or the agreement with us is terminated
on any other date than the last business day of a calendar month or quarter, that client will be charged
a management fee which will be prorated. The proration will be based on (a) the number of business
days in the calendar month or quarter through the date of termination to (b) the total number of
business days in the calendar month or quarter.
If a client enters into an agreement with us mid-quarter, that client will be charged a managementfee
which will be prorated. The proration will be based on (a) the number of days remaining in thecalendar
month or quarter to (b) the total number of days in the calendar month or quarter.
For certain legacy clients, we charge asset-based strategy fees. We charge a higher rate for client
assets invested in some strategies than we do for others. Charging a different rate for client
investments based on the strategy the client is invested in gives us an incentive to allocate client assets
to strategies where we receive higher fees. We mitigate this conflict by disclosing it to you and by
adhering to our duty to recommend strategies that are in the best interests of our clients. In addition,
we will not change the allocation of your portfolio to a strategy that increases your fees without
obtaining your consent.
NorthCoast also manages accounts that are part of “wrap fee” programs (in which the advisory fee is
inclusive of portfolio trading costs) sponsored by other brokerage or asset management firms with
whom NorthCoast has selling agreements or dual contracts. NorthCoast may opt to negotiate lower
fees in order to participate in these programs. NorthCoast does not sponsor its own wrap fee program.
If needed, NorthCoast has the ability to place orders with brokers or dealers other than the wrap
program’s sponsor (“trading away”). In these instances, brokers or dealers will impose mark-ups/mark-
downs on those orders that are charged to the client’s account within the execution price. These are
not included in the wrap fees paid by the client to the wrap program’s sponsor. This would occur in
rarecases in which the additional cost to the client remains consistent with NorthCoast’s duty to seek
best execution.
NorthCoast bills on an “in arrears” basis. However, several brokerage firms offering our productsbill
on a forward basis. They include UBS, Pershing, Raymond James, and Oppenheimer.
We offer clients the option of obtaining certain financial solutions from unaffiliated third-party
financial institutions through UPTIQ Treasury & Credit Solutions, LLC (together with UPTIQ, Inc.
and its affiliates, “UPTIQ”) and Flourish Financial LLC (“Flourish”). Focus Financial Partners, LLC
(“Focus”) is a minority investor in UPTIQ, Inc. UPTIQ is compensated by sharing in the revenue
earned by such third-party financial institutions for serving our clients. The revenue paid to UPTIQ
also benefits UPTIQ Inc.’s investors, including Focus, our parent company. When legally
NorthCoast Asset Management Disclosure Brochure
permissible, UPTIQ also shares a portion of this earned revenue with our affiliate, Focus Solutions
Holdings, LLC (“FSH”). For non-residential mortgage loans made to our clients, UPTIQ will share
with FSH up to 25% of all revenue it receives from such third-party financial institutions. For
securities-backed lines of credit (“SBLOCs”) made to our clients, UPTIQ will share with FSH up to
75% of all revenue it receives from such third-party financial institutions. For cash management
products and services provided to our clients, UPTIQ will share with FSH up to 33% of all revenue
it receives from the third-party financial institutions and other intermediaries that provide
administrative and settlement services in connection with this program. As noted above, Flourish
facilitates cash management solutions for our clients. When legally permissible, Flourish pays FSH
a revenue share of up to 0.10% of the total amount of cash held in Flourish cash accounts by our
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