Item 5: Fees and Compensation
A. Adviser is compensated for its services on either a percentage of assets under management or
on a fixed fee or hourly basis. Fees are negotiable, and each client’s specific fee schedule is
included as part of the investment management and/or financial planning agreement signed by
Adviser and the client.
Financial Planning and Consulting Services
Adviser is compensated for financial planning services primarily by a fixed fee that typically
ranges from $2,500 to $20,000 per year based on the complexity of a client’s financial situation
and the specific services to be rendered by Adviser. Alternatively, Adviser may render financial
planning services on an hourly basis at a rate of $300 per hour, subject to negotiation at Adviser’s
discretion.
Investment Management
Adviser requires a minimum annual fee of $2,500. This minimum annual fee may be waived by
the Adviser at the Adviser’s sole discretion. Adviser’s standard investment management fee
schedule is included below, subject to negotiation with a client:
Client Assets Under Management Annual Fee Percentage
(paid quarterly)
$0 - $3,000,000 1.00%
$3,000,001 - $5,000,000 0.75%
$5,000,001 - $15,000,000 0.50%
Any amount above $15,000,000 0.25%
The fee schedule illustrated above is a blended tier based on the aggregate total of the client’s
household account value(s). For example, a household account valued at $10 million would pay
1% on the first $3 million, 0.75% on the next $2 million, and 0.50% on the next 5 million, resulting
in an effective rate of 0.70% annually.
Private Fund Management
Emissary Wealth charges an annual management fee of sixty-seven (67%) of the Management
fee that the General Partner of the Fund is entitled to receive pursuant to and in accordance with
the Limited Partnership Agreement. The portion of the General Partner’s Management Fee
payable to Emissary Wealth shall be promptly paid by the General Partner to Emissary Wealth
upon the General Partner’s receipt of such Management Fee (or any portion thereof) from the
Fund (but in no event more than three (3) business days following its receipt thereof).
The management fee is calculated based on a percentage of value of each Limited Partner’s
capital account as of the first day of each calendar quarter equal to 1.00% per annum and is
deducted from an investor’s capital account in the fund. The advisory fee and the methods used
for determining valuation is detailed in the Fund Private Placement Memorandum (“PPM”)
received by Fund partners. Additional fees for additional services may be provided upon mutual
agreement.
B. Investment management fees are deducted in advance on a quarterly basis from clients’ assets
and based upon the market value of such assets managed by Adviser as of the last day of the
prior calendar quarter. In certain circumstances, investment management fees may be deducted
in arrears. Fixed financial planning fees are billed quarterly in advance, and hourly financial
planning fees are billed monthly in arrears. Initial fees are prorated based on the number of days
that the client’s account(s) was open during the quarter. Additional deposits of funds and/or any
other securities will be subject to the same fee procedures. The full value of client’s account(s),
on a gross basis, is included when calculating fees. This includes any portion of the client’s
account(s) attributable to margin.
For the Private Fund, management fees are deducted in advance on a quarterly basis from an
investor’s capital account as of the first day of each calendar quarter. Any additions to (including
initial subscriptions) or withdrawals from any capital account other than as of the end of a
calendar quarter will be prorated (and any excess advisory fee reimbursed), with the amount of
such fee calculated as set forth above and multiplied by a fraction, the numerator of which will be
the number of calendar days in such quarter such additional or redeemed amount was invested in
the Partnership and the denominator of which will be 91.
C. In addition to the fees charged by Adviser, clients will incur brokerage and other transaction costs.
Please refer to Item 12: Brokerage Practices, for further information on such brokerage and other
transaction-related practices. Clients will also typically incur additional fees and expenses
imposed by independent and unaffiliated third-parties, which can include qualified custodian fees,
mutual fund or exchange traded fund fees and expenses, mark-ups and mark-downs, spreads
paid to market makers, wire transfer fees, check-writing fees, early-redemption charges, certain
deferred sales charges on previously-purchased mutual funds, margin fees, charges or interest,
IRA and qualified retirement plan fees, and other fees and taxes on brokerage accounts and
securities transactions. If a client wishes for Adviser to manage held-away accounts through a
third-party order management system, the client may be responsible for platform fees associated
with the use of that system. These additional charges are separate and apart from the fees
charged by Adviser.
Expenses borne by a particular Private Fund investor pursuant to the Fund Governing
Documents may include, but are not limited to: operational expenses, including (without
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