Item 5 - Fees and Compensation
A. FFT offers its services to clients on a fee basis, which may include fixed fees or fees
based on assets under management.
Investment Management Fees
If engaged to provide investment management services, FFT charges either an annual fee
based upon assets under management which may be subject to a minimum fee or, in the
alternative, a fixed annual fee. The Firm’s asset-based fee generally varies between
0.25% and 1.50% of the assets under management depending on the size of the
investment portfolio, the complexity of an engagement and the type of services to be
rendered. The fee is prorated and generally charged quarterly, in arrears, based upon the
average daily balance of the assets during the previous quarter. In certain circumstances,
FFT’s fees may be negotiable.
The Firm’s fixed fees generally range from $5,000 to $2,000,000 annually and are
charged quarterly in advance or arrears, depending on the client’s arrangement. These
fees are independently negotiated between FFT and a client prior to commencing
services.
Financial Planning and Consulting Fees
FFT charges a fixed fee for its standalone financial planning and consulting services.
These fees are negotiable, but generally range from $5,000 to $2,000,000. These fees are
determined by the complexity of an engagement, the level and scope of services, and the
professionals engaged to render the services. If the client engages FFT for additional
investment advisory services, FFT may offset all or a portion of its investment
management fees based upon the amount paid for planning or consulting services.
Generally, FFT requires one-half of the fixed fee payable upon entering into a contract
with a client. The balance is generally due upon delivery of the financial plan or
completion of the agreed upon services.
Management Fees of FFT Private Investment Fund II LP
Pursuant to the Partnership Agreement of FFT Private Investment Fund II LP, each
member holding interests shall pay to FFT a quarterly management fee, calculated at the
rate of one-half of one percent (0.50%) per annum, based on each member’s capital
commitment during the investment period, and based on each member’s cost basis of
remaining investments after the investment period. In addition, FFT, or an affiliate, may
charge a performance fee, or carried interest, which is described below in Item 6 -
Performance-Based Fees and Side-by-Side Management. FFT has discretion to waive
these management and performance fees for certain wealth management clients of FFT.
B. Deduction of Fees.
FFT bills its clients in accordance with the client’s investment advisory agreement.
Generally, pursuant to the authority granted in the client’s investment advisory
agreement, FFT will debit its fees directly from the client’s account(s). However, clients
have the ability to elect for direct invoicing.
Clients are billed quarterly, in arrears, unless otherwise agreed. For the initial period of
investment management services, the fees are calculated on a pro rata basis. FFT fees are
prorated through the date of termination and any remaining balance is charged or
refunded to the client, as appropriate.
Certain third-party managers may employ different billing practices than FFT. In such
circumstances, in the interest of efficiency, FFT may alter its billing practices to
accommodate those of the third-party manager.
C. Other Fees and Expenses.
All portfolios incur brokerage and other transaction costs. Please refer to Item 12 for
additional information about brokerage fees.
Clients may incur additional fees charged by affiliated or third-party managers, custodial
fees, charges imposed directly by a mutual fund or ETF which are disclosed in the funds’
prospectus, deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and
electronic fund fees, and other fees and taxes on brokerage accounts and securities
transactions. Such charges, fees, and commissions are exclusive of and in addition to
FFT’s fees.
Specifically, Optima Asset Management LP (“Optima”), a firm affiliate, is the investment
adviser to private funds and a registered fund, the Optima Strategic Credit Fund
(“OPTCX”). Optima may charge management and performance fees to investors in the
Optima private funds. Optima receives a 50-basis point management fee from Optima
Strategic Credit Fund; 50% of that fee is paid to Anthony Capital Management, an
unaffiliated sub-adviser to the fund.
D. Advance Billing.
Some of FFT’s clients may pay fees in advance. If the account terminates during the
period for which the fees have been pre-paid, the Firm will prorate the client’s fee for the
time FFT’s managed the account during the period and rebate the difference to the client.
E. Additional Compensation.
None of FFT’s supervised persons accepts compensation for the sale of securities or other
investment products, including asset-based sales charges or service fees from the sale of
mutual funds.