Item 5 Fees and Compensation
Annual Asset Based Fee Calculation and Billing
The annual investment management Fee (“Annual Fee”) applicable to each client account is
provided on the fee schedule, as may be amended from time to time, to the individual investment
management agreement (“Fee Schedule”).
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The Annual Fee will be calculated using your account’s average daily market value. The average
daily market value is determined by adding the account’s daily market value for each calendar day
in the billing quarter and dividing that total by the number of calendar days in the quarter. The
calculation is adjusted for accounts opened after the first day of the quarter and for accounts closed
before the end of the quarter. The Annual Fee will be billed quarterly in arrears meaning you are
charged after services are provided.
Tiered Fee Schedules:
Accounts Holding Equity, Cash and Mixed* Accounts:
Assets $5 million or less 1.00% annual fee
Assets over $5 million 0.60% annual fee
Minimum Annual Fee $7,500
*Includes accounts holding assets other than only fixed income securities and/or cash.
Accounts below $750,000 that are charged the minimum fee are assessed a fee as a percentage of
their assets that is greater than the highest rate tier of the published fee schedule.
Accounts Holding Fixed Income and Cash Assets Only:
Assets $5 million or less 0.50% annual fee
Assets over $5 million 0.375% annual fee
Minimum Annual Fee $7,500
Accounts below $1,500,000 that are charged the Minimum Annual Fee are assessed a fee as a
percentage of their assets that is greater than the highest rate tier of the published fee schedule.
Breakpoint Discounts and Aggregation
Fee reductions based on breakpoints apply only to the portion of assets exceeding the relevant fee
tier. FTWA may, at its discretion, aggregate (“billing household”) assets across a Client household’s
eligible accounts—such as those held by the same individual, family members, or related parties
with power of attorney—to qualify for breakpoint discounts. FTWA considers the similarity of
investment objectives when determining whether to aggregate accounts into billing households and
reserves the right to apply the fee schedule separately to each account.
Fee Schedule Discretion
FTWA, at its sole discretion, may negotiate fees based upon certain criteria, including without
limitation, anticipated future earning capacity, anticipated future additional assets, dollar amount of
assets to be managed, related accounts, account composition, a pre-existing Client relationship,
account retention. FTWA may negotiate a flat fee arrangement in its sole discretion.
Additional Fees
In addition to the Advisory Fee, Clients incur additional fees and costs associated with the
investments held in their accounts. These may include:
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• Transaction costs – such as usual and customary transaction charges on the liquidation of
investments deemed ineligible for this investment management program, certain other costs
or charges that may be imposed by third parties (including, among other things, bid-ask
spreads, odd lot differentials, exchange fees, transfer taxes, foreign custody fees,
supplemental transaction fees, regulatory fees and other fees or taxes that may be imposed
by pursuant to law, rule, or regulation
• Custodial Charges - costs of custody and execution services by any third-party custodian;
• Transfer agency fees;
• Tax consequences related to investment activity;
• Non-sponsored alternative investment processing and maintenance fees;
• Costs and expenses of UITs (e.g., organization costs, operating expenses, portfolio
supervision, bookkeeping, trustee, and other administrative fees, etc.);
• Third-Party Manager fees (described below).
Clients will also incur additional fees and expenses charged by mutual funds and exchange-traded
funds (ETFs) (collectively, “Funds”) held in Client portfolios. These may include:
• Investment management fees;
• Shareholder servicing fees;
• Administrative fees;
• Any contingent deferred sales charges assessed on the sale or liquidation of Fund shares;
• Distribution fees (commonly referred to as 12b-1 fees, under Rule 12b-1 of the Investment
Company Act of 1940, as amended);
• Redemption charges imposed by certain Funds or alternative investments (see Fund
prospectus or private placement memorandum (“PPM”), as applicable, for details).
• Incentive fees imposed by certain Funds or alternative investments (see Fund prospectus or
private placement memorandum (“PPM”), as applicable, for details).
Each Fund’s expense ratio, which reflects its total fees and expenses, is detailed in its prospectus.
While a mutual fund may offer multiple share classes—each representing the same underlying
portfolio—the fees vary by class. FTWA seeks to invest Client assets in the lowest-cost share class
available, but availability may be limited by FTWA’s agreements with fund providers, custodians, or
investment program sponsors. As a result, Clients may not always be invested in the share class
with the lowest expense ratio.
FTWA does not provide custodial services. These services are subject to fees which are in addition
to FTWA’s asset-based fees. Custodial fees will be outlined in a separate agreement between the
Client and the Client’s selected custodian.
Third-Party Manager Fees
Accounts invested in SMA strategies for which FTWA has delegated investment discretion to an
unaffiliated Third-Party Manager to manage or provide additional services will be charged a separate
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