Item 5. Fees and Compensation
Portfolio Management Account (“PMA”) Program Fees
PMA fees based on assets under management are as follows:
Market Value of Portfolio Value Max Annual Fee
$25,000 to $125,000 2.65%
$125,001 to $250,000 2.55%
$250,001 to $500,000 2.45%
$500,001 to $750,000 2.00%
$750,001 to $1,000,000 1.75%
$1,000,001 to $2,000,000 1.50%
Above $2,000,001 1.00%
Fee schedules negotiated with the client may not exceed the maximum rate at the respective account
size level, and may be no less than .50% at any level.
Fees and Charges: FAA generally charges a management fee based on a percentage of the value of the
assets under management based on the schedule detailed below. The fees are negotiable on an
individual basis at the IARs discretion provided they do not exceed the stated parameters.
Fees are payable quarterly, either in advance or in arrears, depending on the specific circumstances of
each Client.
Fees Billed in Advance
For advance billing Clients, an advance fee will be assessed based on the ending quarterly value,
and representing the next quarter in advance. Subsequent to the initial funding period advance
billing clients will only be assessed the advance fee based on the ending quarterly value.
Fees Billed in Arrears
For arrears billing Clients, a single fee is assessed at the end of the quarter when the account is
initially funded.
The fee is calculated on a pro-rated basis on the average daily balance over the initial funding quarterly
period. Subsequent to the initial funding quarterly period, the fee is assessed for the entire quarterly
period based on the ending quarterly value.
Managed Account Solutions (“MAS”) Program Fees
Fees and Charges: FAA generally charges a Management Fee that is comprised of two components; a
Program Fee, and an Advisory Fee. The Program Fee is the portion from which Envestnet pays the SAMs
and any third-party service provider. The Program Fee also includes investment management services
comprised of account rebalancing and other operational and administrative services. In addition, there are
Form ADV Part 2A/B for FAA Page 8 of 16
Prepared by Financial Registrations, Inc. ver. 03282011
certain fees charged by NFS to cover clearance, execution and custody. A summary of those fees and all
Program Fees are disclosed separately by Envestnet.
The Advisory Fee is the portion from which FAA provides the services of client profiling, strategic asset
allocation, style allocation, research and evaluation of asset managers, account performance reporting,
ongoing monitoring of manager and account performance, asset manager hiring and termination.
Management Fees charged are calculated as an annual percentage of assets based on the market value
of the account at the end of the calendar quarter. The level of the Management Fee is negotiable
between the IAR and the Client, and will vary with the amount of assets under management and the
particular investment styles, investment options, and SAMs chosen.
Third Party Manager Investment Program Fees (SIMC)
The fees payable to SIMC for the IMAP feature are up to 0.15% for the first $500,000 and 0.05% for
amounts in excess of $500,000 in assets under management. SIMC may impose minimum account
balances ranging from $50,000 to $1,000,000 depending upon the Managed Account Portfolio chosen
and whether the Client selects the IMAP feature. SIMC's fees shall be a percentage of the market value
of the Client's Managed Account Portfolio assets. SIMC's fee shall be calculated and payable quarterly in
arrears and net of any income, withholding or other taxes. The aforementioned fees may be subject to a
discount. SIMC may add an additional 0.15% solicitation fee to certain accounts, which are referred to
SIMC by certain third parties. This fee, and the nature thereof, is disclosed to all investors prior to
acceptance of any account for which it is charged.
Investment Consulting Fees
The fees for consulting services are negotiated between the IAR and the Client. Fees may be assessed
on an hourly basis up to $350.00 per hour or a flat fee basis for the consulting project that may be either a
set dollar amount or a percentage of the fair market value of assets that are subject to the Agreement.
Other Misc. Fees
Additionally, FAA may receive concessions and/or 12b-1 fees from certain mutual funds, variable
annuities and/or other types of investment vehicles paying such servicing fees where such fees are
applicable.
Fees charged to clients may be higher or lower than the aforementioned fees depending on the nature of
any pre-existing relationship, the complexity of the accounts, or terms and conditions of any outstanding
or pre-existing verbal or written agreement to which FAA is a party.