Item 5. Fees and Compensation
Wealth Management Services
Our fees for Portfolio Management services for individuals, families, and related entities are based
upon a percentage of assets under management, in accordance with the following fee schedule:
Assets Under Management ($) Annual Fee (%)
$0 - $3M $10,000 plus 1.00% of amount over $1M
$3M - $5M $30,000 plus 0.60% of amount over $3M
$5M – $10M $42,000 plus 0.50% of amount over $5M
$10M - $25M $67,000 plus 0.35% of amount over $10M
Above $25M $119,500 plus 0.20% of amount over $25M
Our fees for Portfolio Management services for tax-exempt organizations (and corporate or
institutional services) are based upon a percentage of assets under management, in accordance with
the following fee schedule:
Assets Under Management ($) Annual Fee (%)
$0 - $10M $33,000 plus 0.35% of amount over $5M
$10M - $25M $50,500 plus 0.25% of amount over $10M
$25M - $50M $88,000 plus 0.20% of amount over $25M
Above $50M $138,000 plus 0.10% of amount over $50M
Family Office Services
Our fees for Family Office services are based upon a percentage of assets under management or
advisement, in accordance with the following fee schedule:
Assets Under Management ($) Annual Fee (%)
$0 - $10M $50,000 plus 0.60% of amount over $5M
$10M – $25M $80,000 plus 0.40% of amount over $10M
$25M - $50M $140,000 plus 0.30% of amount over $25M
Above $50M $215,000 plus 0.20% of amount over $50M
Consulting/Specialty Services
For any ad-hoc consulting services delivered separately or found to be outside the scope of Wealth
Management or Family Office services, we will either 1) charge based on an hourly rate ranging
from $60 to $500, or 2) charge a mutually agreed upon fixed fee, depending on the staff member
performing the work. The length of time it will take us to complete a particular consulting project will
depend on the nature and complexity of the individual client's personal circumstances. An estimate
for total hours will be determined at the start of the consulting relationship. Cornerstone will charge
a minimum engagement fee of $5,000 for Consulting/Specialty Services. This minimum
engagement fee can be waived at Cornerstone’s discretion.
Fees in General
Advisory fees are charged in advance at the beginning of each quarter, based upon the net value of
the managed assets in the client account on the last business day of the previous quarter. If
significant assets are added or subtracted during the quarter, Cornerstone may negotiate an adjusted
fee.
Consulting fees are due and payable upon completion of the consulting service. We may request an
initial retainer deposit upon completion of our fact-finding session with the client.
Depending on the particular arrangement with each client, we will either invoice clients or directly debit
their custodial accounts for wealth management and family office fees.
Fees and account minimums for all services are negotiable 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.). Discounts, not generally
available to our advisory clients, may be offered to Cornerstone employees and family members of
Cornerstone employees.
We may aggregate certain related client accounts for the purposes of determining the account size
and/or annualized fee.
Legacy client agreements are governed by fee schedules different from those listed above.
If Cornerstone chooses to accept a portfolio below our stated account sizes, we may charge a fee
based upon a percentage of assets under management or advisement of 1.25% until such time the
portfolio meets fee schedule guidelines.
Under no circumstances will we earn fees in excess of $1,200 more than six months in advance of
services rendered.
Account Termination
Clients will have a period of five (5) business days from the date of signing the agreement to
unconditionally rescind the agreement and receive a full refund of all fees. Thereafter, the client may
terminate the agreement by providing us with a written notice at our principal place of business. Upon
termination of any account, any prepaid, unearned fees will be promptly refunded, and any earned,
unpaid fees will be due and payable. Clients who invested in certain private funds sponsored by our
firm will continue to pay us fees on these investments from the date of termination to the date of
client’s interest liquidation.
Mutual Fund, ETF and Private Fund Fees and Expenses:
Cornerstone is a manager of third-party managers, therefore all fees paid to our firm for investment
advisory services are separate and distinct from the fees and expenses of the underlying portfolio
investments. These fees and expenses are described in each investment legal document offering or
private placement memorandum including the Prospectus for the Cornerstone Mutual Funds or
Cornerstone private partnerships.
These fees will generally include a management fee, other fund expenses (which in aggregate could
equal or exceed the management fee), a possible distribution fee, and a possible carried interest or
performance fee assessed by the underlying third-party managers in the Cornerstone private
partnerships. A client could invest in a RIC directly, without the services of our firm. In that case, the
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