Item 5 Fees and Compensation
Base Cost of Service
The Base Cost is $6,250 per quarter if the family net worth is greater than $30 million and $2,500 per
quarter if the family net worth is less than $30 million.
The Base Cost will periodically increase as outlined below.
As Of Base Cost if Family Net Base Cost if Family Net
Date Worth is less than $30 Worth is more than $30
million million
Jan. 1, 3,000 per quarter 7,500 per quarter
Jan. 1, 3,500 per quarter 8,750 per quarter
Jan. 1, 4,000 per quarter 10,000 per quarter
Jan. 1, 5,000 per quarter 12,500 per quarter
Family Chief Financial Officer (Includes Investment Management Services and Planning)
The cost of Family CFO services includes the Base Cost of Service listed above and a percentage of the
total value of asset or account(s) value as of the last trading day of the preceding month with Fi3
Financial Advisors at the rates set forth in the fee schedule below. The fees are charged quarterly in
advance based on the value of a client’s assets under our management, at the end of the previous
quarter.
Account Value Annual Fee**
First $5,000,000 0.65%
Next $10,000,000 0.45%
Next $15,000,000 0.35%
Above $30,000,000 0.25%
** The value of nontraditional assets such as real estate, private equity, hedge funds and other
alternative investments may be included for purposes of calculating our advisory fee.
Under certain circumstances the firm may negotiate standalone investment management services and or
concierge services, such as bill pay services.
Monitoring Services
Our annual fee for monitoring services is based on the following tiered fee schedule and is charged
quarterly in advance based on the value of assets at the end of the previous quarter.
Account Value Annual Fee
First $10,000,000 0.20%
Above $10,000,000 0.05%
Private Fund Fair Value Assessments – Conflict of Interest
With respect to valuation of private investments, the firm, depending on specific client or fund
circumstances, receives the following information and has the following practices with respect to
valuation:
1. In many instances, clients provide Fi3 the valuation of their private investment fund holdings to
the firm for purposes of net worth reporting and the firm’s calculation of its fees. Bear in mind
that the firm bases its fees for private funds on the value you provide to us. The higher the
value, the higher our fees. Clients should ensure the private fund investment values provided to
Fi3 represent the current fair value of the investment considering any impairments imposed by
the private fund issuer.
2. In other instances, the private fund issuer provides a valuation statement to Fi3 no less frequently
than annually. The firm reviews any correspondence from the issuer to identify any instances in
which there may be a distribution of capital or an impairment to the private fund’s value. In either
scenario, the firm shall reduce the valuation by the amount of the distribution or impairment so
that the client’s net worth statements accurately reflect the current valuation and that the fees
are correctly calculated on a prospective basis. With respect to an impairment, if the effective
date of the impairment precedes the notification by the issuer, the firm shall credit the fee
difference for the next billing period after receipt of the notification.
3. Absent the instances identified in items 1 or 2 above, the firm shall carry the private fund
investment at cost subject to the impairment procedures described in item 2 above.
The firm will not attempt to establish or quote fair values for Private Client Investments or other
securities and investments constituting Level 1 – Level 3 assets as defined in FASB Accounting Standards
Codification 820 (formerly Statements of Financial Accounting Standards No. 157). The valuation of such
investments will be handled as stated above in items 1 through 3.
Clients investing in the Fi3-ACP Fund 2022 private fund are charged an advisory fee on the assets
invested in the fund. The fair market value of the fund is calculated quarterly.
Clients investing in Fi3 Capital Private Equity Fund Class A are not charged a management or
advisory fee. The firm will receive a 10% carried interest (i.e., a percentage of profits) only after
investors have earned an annual IRR of at least 7%. Should the fund return less than 7%
annualized, the firm receives no compensation.
Pension Consulting Services
Our annual fee for pension consulting services is based on the following tiered fee schedule and is
charged quarterly in advance based on the value of plan assets at the end of the previous quarter
(without adjustment for anticipated withdrawals by Plan participants or scheduled transfers or
distributions of assets) and will be billed directly to the client.
Plan Assets Annual Fee**
First $1,000,000 0.50%
Over $1,000,000 0.25%
**There is a minimum annual fee of $2,500.
If the client agreement is executed at any time other than the first day of a calendar quarter, our fees will
apply on a pro rata basis, which means that the advisory fee is payable in proportion to the number of
days in the quarter for which the client engages our firm. Our advisory fee is negotiable, depending on
individual client circumstances.
At our discretion, we may combine the account values or net worth of family members living in the same
household to determine the applicable advisory fee. For example, we may combine account values or
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