Item 5: Fees and Compensation
As independent, fee-only advisors, the only compensation Fairway Wealth Management LLC
receives is fees directly from our clients. We are not affiliated with any specific product and
are not compensated in any way for the sale or placement of any product. We also receive no
cash compensation from any non-client, nor do we accept any indirect compensation or
material gifts that could influence our decisions.
Wealth Management Fees
When clients wish to engage us for Wealth Management Services, they will be required to sign an
advisory agreement. This agreement describes our services, responsibilities, fees, and general
business terms.
We will usually charge an asset-based fee for our services, billed quarterly in advance. While we
recognize there is the potential for a slight inherent conflict of interest when fees are asset-based (for
example, to pay off a mortgage using portfolio assets), our Code of Ethics and internal policies and
procedures, require that the clients' interests must always come first.
Our asset-based fee schedule, charged as a percentage of assets under management, is as follows
and applies to all clients, including those receiving Next-Gen services:
Assets Under Management Annual Fee
First $5 million 0.75% per year
Next $5 million 0.50% per year
Amounts above $10 million 0.25% per year
There are situations where charging fees based on a percentage of assets is not feasible. This could
be due to difficulty in determining exactly which assets are under our management, or where the
assets under management are not commensurate with the scope and needs of a particular client. In
these cases, fees may be charged as a fixed annual retainer. The amount of any fixed annual retainer
will be based on a variety of factors, including client size, complexity, and services requested, and will
be reviewed on an annual basis.
There may also be limited situations when fees are charged on an hourly basis for a specific project.
Any such fee arrangement will be documented in a separate service agreement to be signed by the
client. Hourly fees may range from $100 to $400 per hour, based on the nature and complexity of the
engagement and the associated professional of the firm who is providing the service. Any hourly fees
will be billed periodically as services are performed.
Our minimum annual fee for ongoing wealth management services is $15,000, which equates to the
asset-based fee of a $2 million portfolio. Although we have established the aforementioned fee
schedule, we retain the sole discretion to charge a lesser fee and/or reduce or waive our stated
minimum, based upon certain criteria. These criteria include the complexity of the client, assets to be
placed under management, anticipated future additional assets, related accounts and account
composition, among other factors. The specific annual fee schedule is identified in our advisory
agreement between Fairway Wealth Management LLC and each client. Please Note: If you maintain
less than $2 million of assets under our advisement and are subject to the $15,000 annual minimum
fee, you will pay a higher percentage annual fee than the 0.75% referenced in the above fee schedule.
We also may group certain related clients for the purposes of achieving the minimum account size
requirements and determining the annualized fee.
Companies and Company Sponsored Retirement Plan Fees
As with our Wealth Management Services, all services provided to companies and company-
sponsored retirement plans require a signed advisory agreement describing our services,
responsibilities, fees, and general business terms. We will charge either a fixed retainer or an asset-
based fee for services to company or retirement plan clients. Given the varying nature of these
relationships, we do not have an asset-based fee schedule that applies to our retirement plan clients.
Fees are negotiated on a case-by-case basis.
Fairway Wealth Management LLC is deemed to be a fiduciary to advisory clients that are employee
benefit plans pursuant to the Employee Retirement Income and Securities Act ("ERISA"). As such,
our firm is subject to specific duties and obligations under ERISA that include among other things,
restrictions concerning certain forms of compensation. To avoid engaging in prohibited transactions,
Fairway Wealth Management LLC may only charge fees for investment advice about products for
which our firm and/or our related persons do not receive any commissions or 12b-1 fees. As it is our
practice to never accept any commissions or any other form of product-related compensation, we
consistently abide by these prohibited transaction rules.
General Information Relating to All Fees
Timing of Fees: Fees are invoiced quarterly, in advance. When asset-based, fees are based on
the market value of a client's assets under management as of the last day of the prior quarter.
Fees for the first quarter of an engagement are payable in arrears and are prorated for the number
of days that services were provided. Under no circumstances do we require or solicit payment of
fees in excess of $1,200 more than six months in advance of services rendered.
Payment of Fees: Fees may either be deducted from clients' assets or billed directly to the client.
It is at each client's discretion as to how they would like their fees to be paid.
Termination of the Advisory Relationship: A client agreement may be canceled at any time, by
either party, upon written notice. Upon termination of an agreement, a pro-rata refund (by day) of
any prepaid fees will be made to the client.
Other Investment Fees Paid by Clients: In addition to our fees described above, our clients
have other expenses that are paid as part of the overall management of their assets.
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