ITEM 5. FEES AND COMPENSATION
Your Investment Advisory Agreement with D&D will detail the fees payable in connection with
our advisory relationship.
A. Fees Generally
You will be charged a flat-fee, commission or a blend of both based on the type of
advisory program you have selected. These fees will be established in your written agreement
with D&D and are generally negotiable at our discretion.
If an annual flat fee is due for any program, the fee will be payable in advance on a
quarterly basis based on your net account value as of the last day of the prior quarter and will be
subject to later adjustment if there are deposits or withdrawals of $20,000 or more on any day in
the quarter. In the event you open your account in the middle of a quarter, the applicable fee will
be charged on a prorated basis to reflect the number of days remaining in the calendar quarter. If
you terminate an account with us at any time other than the end of a calendar quarter, fees
collected in advance will be prorated based on the actual number of days we managed the
account and the balance will be refunded to you.
If commissions are charged in your program, they will be charged when securities are
purchased and sold in your account.
Unless otherwise agreed to by us, your fees and commissions will be deducted from your
D&D account.
See “Item 12 – Brokerage Practices” beginning on page 20 for a discussion of fees and
compensation with respect to D&D’s selection of broker-dealers to execute client transactions.
B. Wrap Fee Program Fees
1. Portfolio Management Program Fees
The Portfolio Management Program provides investment management services with a
range of investment strategies on the basis of an annual, asset-based fee which is all-inclusive
except for SEC and exchange fees which will be charged on transactions in your account. The
all-inclusive fee is payable in advance on a quarterly basis as described above pursuant to the
following schedule:
Portfolio Management Fee Schedule
(All Inclusive Fee)
Equity and Balanced Accounts
Total Account Value Total Annual Fee
$100,000 - $1,000,000 3.00%
$1,000,001 - $2,000,000 2.50%
$2,000,001 - $3,000,000 2.00%
$3,000,001 - and up 1.50%
The fee schedule may be negotiated in our sole discretion. D&D may negotiate fees
higher than this schedule for accounts that actively trade certain securities (including but not
limited to options and derivatives) which incur clearing costs at rates higher than typical
securities transactions.
The total cost of the services provided through our Portfolio Management Program could
be more or less than if such services were purchased separately.
2. Independent Advisers Program Fees
Under the Independent Advisers Program, for a single specified fee, you will receive
clearing, custodial, and reporting services from D&D, as well as investment advisory services
from the independent portfolio manager selected by you. You will not be charged brokerage and
execution costs with respect to securities transactions executed by D&D as the broker-dealer.
However, should your independent portfolio manager execute transactions through broker-
dealers other than D&D, you will be charged any additional brokerage and execution costs
charged by those broker-dealers. The fees for the Independent Advisers Program, as set forth
below, will be billed in advance on a quarterly basis as described above. Any additional charges
for third party execution will be charged to your account as incurred. These fees are expressed in
terms of an annual percentage of account asset value.
The Independent Advisers Program Fees are payable pursuant to the following fee
schedule:
Independent Advisers Program Fee Schedule
(All Inclusive Fee)
Asset Value Equity Fixed Income
$100,000 - $1,000,000 3.00% 2%
$1,000,001 - $2,000,000 2.50% 1.5%
$2,000,001 - $3,000,000 2.00% 1.25%
$3,000,001 - and up 1.50% 1.0%
The fee schedule may be negotiated in our sole discretion. The fees are deducted from
your account by our clearing firm, Pershing LLC (“Pershing”). A portion of the fee will be paid
to D&D, your D&D investment adviser, and the independent portfolio manager selected by you.
C. Fee Plus Commissions Program Fees
All Fee Plus Commission Program accounts are managed by one of our financial
advisers. All fees on this account will be fee and commission based.
The annual asset-based fee component of the Fee Plus Commission Program is payable
pursuant to the following fee schedule:
Fees Plus Commission Program
Advisory Fee Schedule
Asset Value Fee
up to $500,000 1.5%
$500,001 - $1,000,000 1.25%
$1,000,001 – and up 1.00%
The fee schedule may be negotiated in our sole discretion.
In addition to the advisory fee set forth above, transaction costs such as brokerage
commissions, SEC fees and exchange fees, which are not reflected in the schedule above, will be
charged to your account. Generally, you will pay brokerage commissions at a discount to our
published full commission rates. Commissions may be discounted further as negotiated between
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