Item 5 Fees and Compensation
Fees Related to Portfolio Management for Separate Account Clients
Our annual fees for our portfolio management services for our Separate Account Clients and
our pension consulting services are based upon a percentage of assets under management,
as follows:
Assets Under Management Annual Fee
Up to $1,000,000 1.0%
$1,000,000 and above 0.5%
This is a laddered fee schedule, for instance if a client brings us $2 Million in assets to
manage the first million will be charged at 1% and the second million will be charged at
0.5%. The above percentages are computed and charged calendar quarterly in arrears and
are computed on the market value of the account on the last day of the quarter. This fee is
mutually agreed upon between us and the client. A minimum of $ 500,000 of assets under
management is required for these services. This account size may be negotiable under
certain circumstances. We may group certain related client accounts for the purpose of
achieving the minimum account size and determining the annualized fee.
Upon a client's written authorization, we deduct our advisory fees from the client’s Schwab
account on a quarterly calendar basis.
In some cases, clients may receive our services at reduced rates and, for situations that merit
it, on a pro-bono basis. This accommodation is available for immediate family members, and
other instances at management’s discretion.
Fees Relating to Consulting Services (Financial and/or Business)
We do not charge a separate fee for Consulting Services to our advisory clients.
Fees Relating to Insurance Services
Our fees for sales of insurance products are commissions that are customary in the
insurance industry. The amount of the commissions is not pre-determined, but rather, it is
based on a variety of factors, including the type of insurance product and carrier, which may
differ from client to client. All commissions are paid to us by the insurance carrier. We do not
expect the commissions we receive from sales of insurance products to represent a material
portion of our annual revenue.
Other Information Relating to Separate Account Clients
Termination of the Advisory Relationship: Each client has a five-day right to terminate a
new investment advisory relationship with us without being obligated for any accrued
management fees. This five-day right can be exercised in writing or verbally by phone.
Thereafter, services can be terminated by either party with written notice effective upon
receipt. Because fees are payable after services are provided, there are no unearned fees,
and the client is not due a refund upon early termination of an investment advisory contract.
However, our fees will be prorated and billed to the date of termination.
Mutual Fund Fees: All fees paid to us for our investment advisory services are separate and
distinct from the fees and expenses charged by mutual funds and/or EFTs to their
shareholders. These fees and expenses are described in each fund's prospectus and can
include annual expenses and/or 12b-1 fees. 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. A client could invest in a mutual
fund directly, without our services. In that case, the client would not receive the services
provided by our firm which are designed, among other things, to assist the client in
determining which mutual fund or funds are most appropriate to each client's financial
condition and objectives. Accordingly, the client should review both the fees charged by the
funds and our fees to fully understand the total amount of fees to be paid by the client and to
thereby evaluate the advisory services being provided.
Additional Fees and Expenses: In addition to our advisory fees, clients are also
responsible for the fees and expenses charged by custodians and imposed by broker
dealers, including, but not limited to, any transaction charges imposed by a broker
dealer with which an independent investment manager affects transactions for the
client's account(s). Custodians can charge accounts for various retirement plans and
administration fees. Please refer to the "Brokerage Practices" section (Item 12) of this
Brochure for additional information.
Grandfathering of Minimum Account Requirements: Pre-existing advisory clients are
subject to our minimum account requirements and advisory fees in effect at the time the
client entered the advisory relationship. Therefore, our firm's minimum account
requirements will differ among clients. ECM Ltd reserves the right to accept smaller size
accounts at management’s discretion.
Pension Accounts: We are deemed to be a level fee fiduciary under the Dept. of Labor
Fiduciary Rule to advisory clients that are employee benefit plans or individual retirement
accounts (IRAs) pursuant to the Employee Retirement Income and Securities Act
(“ERISA”). As such, we are subject to specific duties and obligations under ERISA and the
Internal Revenue Code that include, among other things, restrictions concerning certain
forms of compensation.
Advisory Fees in General: Clients should note that similar advisory services may (or may
not) be available from other registered (or unregistered) investment advisers for similar or
lower fees.
Limited Prepayment of Fees: Under no circumstances do we require or solicit payment of
fees in advance of services rendered.
Fees Related to Talisman
With the passage of the Second Amended & Restated Operating Agreement for Talisman
Partners dated January 1, 2021, the Manager is entitled to receive the following fees in
exchange for our services as Manager of Talisman Partners LLC:
• The Manager will receive a management fee equal to: (1) $150,000 per annum if the
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