Item 5 – Fees and Compensation
How We Are Compensated for Our Advisory Services
Cottonwood Wealth Strategies offers our advisory services on a fee-only basis. Our fees vary among
the different types of advisory services we offer and may be negotiated at our sole discretion. The
specific fees and manner in which fees are charged and calculated are described in your investment
advisory agreement. You should carefully review the investment advisory agreement prior to signing
it.
Fees for our advisory services may be higher than fees charged by other advisers who offer similar
services. You may be charged different fees than similarly situated clients for the same services. You
should carefully review this brochure to understand the fees and other sources of compensation that
exist among our services prior to entering into an investment advisory contract with our firm.
Investment and Wealth Management Services
Cottonwood Wealth Strategies offers investment and wealth management services for an annual fee
based on the amount of assets under the firm’s management. Fees are generally billed in advance
each calendar quarter based on the market value of the assets under management/advisement on the
last day of the previous calendar quarter. Cottonwood Wealth Strategies, in our sole discretion, may
waive the annual fee based upon certain criteria, including, but not limited to, anticipated future
earning capacity and/or additional assets, dollar amount of assets to be managed, related accounts,
account composition, pre-existing client relationships, account retention, and pro bono activities.
For investment and wealth management services Cottonwood Wealth Strategies provides to certain
clients or for specific client holdings (e.g., held-away assets, 529 plans, etc.), we may negotiate a fee
rate that differs from our standard fee schedule.
The graduated fee schedule for our wrap fee program is as follows:
Assets Under Management Annual Advisory Fee
$0 - $500,000 1.50%
$500,000.01 - $1,000,000 1.25%
$1,000,000.01 - $2,000,000 1.00%
Above $2,000,000 Negotiable
This fee schedule may be based on cumulative household assets under management. However,
certain ERISA rules prevent householding corporate plans with personal assets for fee reductions.
You should refer to your advisory agreement for your specific fee rate(s).
Selection of Independent Managers
Fees for Independent Managers are set forth by the Independent Manager and may be included
or in addition to Cottonwood Wealth Strategies’ fees, depending on the structure of the third-
party manager program. You should refer to the Independent Manager’s Form ADV Part 2A
Brochure for information on their fees and compensation.
Programs Offered Through Wells Fargo Advisors
When utilizing the programs offered by Wells Fargo Advisors, investment management services are
provided by third-party money managers through the Personalized Unified Managed Account
Program and Private Advisor Network Program. Wells Fargo Advisors and/or the third-party
manager require clients to sign an investment advisory agreement for access to the programs in
addition to our investment management agreement.
Fees for the programs offered through Wells Fargo are as follows:
Program Program Type Maximum Annual Advisory Fee
Personalized Unified Unified Managed 1%
Managed Account Account
Private Advisor Separately Managed 2.05%
Network Account
Advisory fees for the Personalized Unified Managed Account Program include Cottonwood Wealth
Strategies’ advisory fees as well as the third-party managers’ fees. Cottonwood Wealth Strategies’
portion of the total fee includes a platform fee that is paid to Wells Fargo for access to the program. The
advisory fee and third-party managers’ fees are listed on the account statement provided to you by the
custodian.
Advisory fees for the Private Advisor Network Program do not include third-party manager fees.
You pay for the services of the third-party manager separately.
You should refer to your advisory agreement for your specific fee rate(s).
Wells Fargo Advisors will calculate and directly debit Cottonwood Wealth Strategies’ advisory fee
and the third-party managers’ fees from clients’ accounts. The value of assets held in any Wells
Fargo Advisors program is excluded from the amount of total household assets used to determine
Cottonwood Wealth Strategies’ advisory fees for other assets of a client that are managed by
Cottonwood Wealth Strategies.
Financial Planning and Consulting Services
Fees for financial planning and/or consulting services can be billed at an hourly rate, fixed rate, or
project basis in advance on a monthly or quarterly basis. Hourly fees generally range up to $400 per
hour. There is no minimum fee required for financial planning or consulting services; however
financial planning and consulting fees shall generally not exceed $20,000 annually. Fees are due and
payable as incurred. Cottonwood Wealth Strategies may agree with clients to charge fixed fees for
consulting services.
Factors we consider when determining our financial planning and consulting fees include, but are
not limited to:
• The amount of time we expect to spend completing the financial planning or consulting
services and providing related advice
• The complexity of your goals, issues and/or needs
• The extensiveness and complexity of the data needed regarding your personal financial
information
• Your net worth or the value of your investment accounts and/or other assets that are the
subject of the financial planning or consulting services
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