ITEM 5: FEES AND COMPENSATION
A. Investment Management and Financial Planning Fees
We charge a fee that is a percentage of assets under management according to the tiered schedule below:
Annual Fee (%) Assets under management
1.50% on the first Up to $500,000
1.25% on the next $500,000 (up to $1 Million)
1.00% on the next $2,000,000 (up to $3 Million)
0.80% on the next $3 Million to $5 Million
0.70% on the next $5 Million to $10 Million
0.60% on the next $10 Million to $15 Million
0.50% on the next $15 Million to $20 Million
0.40% on the next $20 Million to $25 Million
Negotiable Over $25 Million
For accounts with less than $500,000, we will charge a minimum fee of $5,000. Our standard fee schedule
is set up so that you are charged a lower amount on that portion of assets above certain asset tier levels.
Generally, for accounts over $1 million, the fees you pay cover the financial planning services we provide,
investment management and rebalancing of your portfolio, cash management, plus any ancillary financial
advice and analysis, provided you pay at least the minimum fee of $5000. The fee covers meetings and
phone calls, performance reporting, online access to your account and acting as liaison with your custodian.
We do not charge commissions or transaction-related compensation. Our fee is based on the value of all the
assets in your account. In certain circumstances, our fees may be negotiable. Certain accounts including,
but not limited to, those of Dixon Hughes Goodman LLP employees or DHGWA family members, will not be
subject to the standard fee structure.
1. Billing. We bill all fees quarterly, in advance. Our advisory agreement with you authorizes us to debit
fees directly from your custodial account, or you may opt to be billed and you can pay your fee
separately. Our fees are calculated based upon the fair market value of the gross assets under
management (including any cash or money market balances) on the last day of the previous quarter,
as valued by your custodian.
2. Additional Contributions and Withdrawals. If you contribute $25,000 or more in a single
transaction during a billing period, we will calculate a pro rata fee for that contribution and add it to
your next billing statement. If you withdraw $25,000 or more in a single transaction during a billing
period, we will calculate a pro rata refund that will be applied to your next billing statement.
3. Billing for Accounts with Margin Balances. If you have a margin balance, your advisory fee is based
on the total market value of the securities in the account, including the margin debit balance (the
amount on loan), accrued interest, and any cash awaiting investment. Your margin balance does not
reduce the total market value, but actually increases the amount of assets and thereby increases the
advisory fee. Margin balances are not netted against gross assets to reduce a client’s advisory fees.
If you use margin to fund cash needs instead of selling assets you will pay more in advisory fees and
interest than a client who simply sells assets to fund cash needs. Investment advisors have a conflict
of interest relating to margin accounts, because margin accounts increase the advisory fee to
advisors. Any cash additions to your account (contributions, dividends, interest, and sale proceeds)
excluding those made for the purposes of rebalancing, will be credited to the margin balance to
reduce the debt and will be reflected on the custodian’s statement. Advisory fees are charged on
the gross asset value of the account as stated on the last day of the prior quarter and will include any
reductions applied as of that date.
4. Other Fees. Clients will also incur fees related to the execution of trades by their custodian. Please
refer to section 12 regarding Brokerage Practices. Clients who invest in private equity investments
or other alternative investments such as hedge funds pay fees of the underlying funds plus any fees
associated with the private equity platform, in addition to our advisory fees. Similarly, if you invest
in an annuity, you will pay additional fees and expenses for the annuity, in addition to our advisory
fees. In some cases, your assets may be managed by a third-party manager or subadvisor. In such
cases, you would pay the fees of that other manager or subadvisor, in addition to our fees.
5. Mutual Fund Fees. Our advisory fees are separate from the fees and expenses charged by mutual
funds to their shareholders. These fees and expenses are described in each fund's prospectus. These
fees will generally include a management fee, other fund expenses, and a possible distribution fee. If
the fund also imposes sales charges, a client may pay an initial or deferred sales charge, although
generally we recommend only no-load mutual funds (which have no sales charges). You can invest in
a mutual fund directly, without the services of DHGWA, but you would not receive the advisory
services provided by DHGWA, which include the asset allocation models that are designed to select
mutual funds that are appropriate for your financial condition and objectives. You should review both
the fees charged by the funds and our fees to fully understand the total amount of fees you would
pay and to thereby evaluate the advisory services being provided.
6. Termination. If you terminate your advisory account, we will refund any prepaid, unearned advisory
fees and any earned, unpaid fees will be due and payable. The refund will be calculated by
determining the number of “unused” days in the quarter, divided by the total number of days in the
...