Item 5 – Fees and Compensation
Investment Program Services
The Investment Program fee is paid quarterly, in advance, based upon the market value of the
assets managed through the Platform on the last day of the previous billing period. The Investment
Platform uses separate pricing companies to determine the value of the assets in the various
Investment Programs. This market value can differ slightly to the market value that appears on the
custodian statement.
Generally, advisory fees charged to accounts in the SMA program are billed quarterly in advanced
based upon the last business day of the previous quarter. There are some third party managers that
charge their management fees using average daily balance. The TAMP will calculate these third-
party money manager fees as described above, quarterly in advance. Because these two
methodologies differ, reconciliation is necessary at the end of the quarter to ensure accurate billing.
This true-up billing reflects the difference between the quarterly in advance fee (TAMP) and the
actual fee based on average daily balances (Third-party manager).
Depending upon the account and program (i.e. specific UMA accounts), DWM will calculate
advisory fees on a quarterly basis using a target allocation billing methodology. Under this
approach, fees are based on a predetermined target allocation (weighting) of the different sleeves
(ex. Equity, fixed income, etc) within a model. Typically, these different sleeves are charged
different advisory fees. The market value of the portfolio model will be calculated quarterly on the
last day of the previous quarter and then allocated across asset classes based on the agreed
weighting percentages. Then the appropriate advisory will be calculated for each sleeve in
accordance with its advisory fee schedule. The advisory fees of all the sleeves are added together
to determine the total advisory fee charged to the client. Due to different valuation procedures, the
market value of the account can differ slightly to the market value on your custodian statement.
For the initial period of an engagement, the fee is calculated on a pro rata basis. In the event the
advisory account is terminated, the fee for the final billing period is prorated through the effective
date of the termination and the outstanding or unearned portion of the fee is charged or refunded
to the client, as appropriate. DWM has contracted with various providers for technology support
for its investment platform. Depending on the technology provider, fees are adjusted on an interim
basis based on a level of deposit and withdrawals that equal or exceed a threshold ranging from
$10,000 to $100,000.
There are various programs offered within the investment platform that will charge a platform fee
range from .02% - .30% of assets invested in the various programs. There is also an annual
minimum account fee of up to $120. The above fees do not include securities transaction fees or
sub-manager fees, which may be borne by each account and charged by the custodian, broker dealer
or unaffiliated sub-manager(s). DWM is authorized to deduct Platform fees on behalf of Network
Advisers and sub managers.
Model Portfolio and OCIO Services
DWM, through the OCIO Program, may recommend its FSPs to the client accounts of Network
Advisers. DWM is compensated for providing investment models to the Network Advisers through
the fee paid by the adviser’s clients, in certain instances the fee is paid by the adviser. DWM’s
current manager fees range from 20 to 50 basis points for each account that chooses DWM’s
investment models depending on the program and the model chosen. Additionally, platform fees
of up to 48 basis points will be assessed and will vary on a per client basis. Pricing varies depending
upon the type of investment selected.
For additional information regarding fees charged by the Network Adviser, please consult the
applicable brochure prepared by the Network Adviser.
Model and UMA Select and Model Select with Private Markets
DWM has separately negotiated various compensation arrangements with the money managers
who are participating in these models, such as BlackRock, JP Morgan, Abacus FCF Advisors,
TCW, Fidelity, Invesco, State Street Global Advisors, First Trust and PIMCO. Generally, DWM
receives a percentage, ranging from 9%-20%, of the underlying mutual fund’s and/or ETFs’
expense ratios. Some other mutual funds and/or ETFs have another compensation arrangement
where DWM receives a flat basis point fee, ranging from 3-20 basis points, on the assets held in
the Model Select portfolios. Another compensation arrangement has DWM receiving an annual
upfront fee for marketing and data analytic support ranging up to $75,000. In certain instances,
this marketing and data analytic support fee may also be tied to the money manager’s asset levels
in these Model Select portfolios, which can be up to an additional $175,000 received by DWM
annually. The money management fee will not be higher due to these compensation arrangements,
however, there may be lower cost money managers offering the same investment objective(s).
These different revenue sharing arrangements are separately negotiated and may vary between
different money managers.
DWM, through the Platform, will also receive up to 4 basis points (.04%) and 13 basis points
(.13%) for billing and reporting from the Network Adviser or their clients on all assets in these
Model Select and UMA Select portfolios respectively.
Private Investments Platform
DWM, acting as investment manager of a series of separate pooled investment vehicles, will
receive one or all of the following fees; 0 – 50bps manager fee for managing the vehicle on an
ongoing basis, an upfront fee of 1% - 3% for conducting due diligence, legal, and research on the
Private Equity Investments that will be part of the Investment Vehicles, and/or a performance fee
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