Item 5 Fees and Compensation
Advisory Fees Separately Managed Accounts
Qualified Clients
For Separately Managed Accounts held by clients that are “Qualified Clients” (as defined under
applicable rules), the client may be given the option to select either a fixed management fee or a
performance-based fee, as follows:
FIXED MANAGEMENT FEE OPTION
Clients that select a fixed management fee are charged an annual 1.00% management fee, billed
quarterly in arrears, equal to 0.25% of the end-of-quarter net asset value of the client's account
(including accrued interest).
PERFORMANCE-BASED FEE OPTION
Clients that select a performance-based fee pay the greater of (a) or (b) below:
a. An annual management fee equal to the greater of $3,000 or a 0.50% management fee, billed
quarterly in arrears, equal to 0.125% of the end-of-quarter net asset value of the client's
account (including accrued interest)
b. An annual performance fee equal to 11% of the increase in the account's net market value
(before the payment of any management fees) calculated at calendar year end or, in the event
the investment management agreement is terminated by either party during a calendar year, as
of the date of termination. The increase in net market value includes realized and unrealized
gains/losses, and interest and dividend income (including accrued interest).
Under the performance-based fee option, if the performance fee exceeds the annualized management
fee, the performance fee will be owed, minus the management fees already paid during that calendar
year.
Financial Planning Services
We charge a fixed fee for financial planning services, which generally ranges between $2,500 and
$6,000. The first half of the fee is due in advance of services rendered with the remaining balance
payable upon completion of the contracted services. The fee is negotiable depending upon the
complexity and scope of the plan, your financial situation, and your objectives. We do not require you
to pay fees six or more months in advance. Should the engagement last longer than six months
between acceptance of financial planning agreement and delivery of the financial plan, any prepaid
unearned fees will be promptly returned to you less a pro rata charge for bona fide financial planning
services rendered to date.
At our discretion, we may offset our financial planning fees to the extent you implement the financial
plan through our Portfolio Management Service.
You may terminate the financial planning agreement upon written notice to our firm. If you have pre-
paid financial planning fees that we have not yet earned, you will receive a prorated refund of those
fees. If financial planning fees are payable in arrears, you will be responsible for a prorated fee based
on services performed prior to termination of the financial planning agreement.
Non-Qualified Clients
For Separately Managed Accounts held by clients that are not Qualified Clients, clients are charged an
annual 1.00% management fee, billed quarterly in arrears, equal to 0.25% of the end-of-quarter net
asset value of the client's account.
Minimums; Partial Term
All accounts are subject to an annual minimum management fee of $3,000, billed quarterly in arrears.
If the first and/or the last fee period that a Separately Managed Account agreement is in effect is less
than a full period (e.g. three calendar months in the case of a quarterly fee), the fixed or asset-based
fee for such period will be calculated as of the last day of such period on which the agreement was in
effect and prorated by the number of days during the period that the agreement was in
effect. Performance-based fees are charged in full as applicable and are not prorated.
In the case of any fee based upon the value of a Separately Managed Account, in any period during
which there was an interim deposit and/or withdrawal (other than withdrawal to pay management fee)
by the client to or from the account, the fee schedule shall be applied to the average of the account
values determined as of the close of business on the last business day of each month ending during
such period.
Private Investment Funds
Private Investment Funds are charged an annual fee as follows:
Cutler Investment Fund, L.P.
Investors in the Cutler Investment Fund, L.P. are charged a management fee and a performance fee:
MANAGEMENT FEE
Investors in Cutler Investment Fund, L.P. are charged a 0.5% management fee, billed quarterly in
arrears, equal to 0.125% of the end-of-quarter net asset value of each investor's capital account.*
PERFORMANCE FEE
As annual performance fee equal to 11% of the increase in the net market value of the investor's
capital account at the end of the calendar year (with adjustments for deposits, withdrawals and trading
costs) less quarterly management fees paid during the year. The increase in net asset value used to
calculate the allocation includes realized and unrealized gains or losses, and interest and dividend
income.*
Cutler Financial Fund, L.P.
Class A Limited Partners, are charged a 0.95% management fee, billed quarterly in advance, equal to
0.2375% of the beginning-of-quarter net asset value of each investor's capital account.*
Class B Limited Partners, are charged a 1.0% management fee, billed quarterly in advance, equal to
0.25% of the beginning-of-quarter net asset value of each investor's capital account. Class B Investors
are also charged a performance fee equal to 10% of the increase in the net market value of the
investor's capital account at the end of the calendar year (with adjustments for deposits, withdrawals
and trading costs). The increase in net asset value used to calculate the allocation includes realized
and unrealized gains or losses, and interest and dividend income.*
Class C Limited Partners, are charged a 1.5% management fee, billed quarterly in advance, equal to
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