Item 5. Fees and Compensation
FAM offers services on a fee basis, which includes fixed fees, as well as fees based upon assets under
management.
Fees for Financial Planning and Investment Management Fees
FAM offers services for an initial and ongoing fixed fee based on the amount of assets investable.. These
fees vary in accordance with the following fee schedule:
Investable Assets Up To Initial Planning Fee Quarterly Fee
Up to $750,000 $4,400 $2,200
$1,000,000 $5,000 $2,500
$1,250,000 $5,600 $2,800
$1,500,000 $6,200 $3,100
$1,750,000 $6,800 $3,400
For each $250,000 increase Additional $600 over prior Additional $300 over prior
thereafter threshold threshold
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Disclosure Brochure Financial Asset Management Corporation
Investable Assets are considered to include investment assets over which the client has control, such as
investment accounts (including cash), IRA's, employer sponsored retirement accounts, stock options, bank
accounts, etc. where the Firm is providing advice. Real estate is not included as an Investable Asset.
Additional fees may be charged for business or real estate analysis. Fifty percent (50%) of the Initial Fee
is due at the time the Advisory Agreement is signed, and the rest is due forty-five (45) days later. The
Initial Fee covers the first six months of service. After that six months, ongoing quarterly fees will be billed
quarterly in arrears. The fee is determined and remains the same for three years. After that three year
period the fee is adjusted for another three year period based on the client’s Investable Assets and the
schedule that is active and agreed upon by the client at that time.
In some cases, legacy clients are charged based on assets under management ranging from 0.60% to 1.00%
annually. For these clients, management fees shall be prorated for each capital contribution and withdrawal
made during the applicable calendar quarter.
In the event the advisory agreement is terminated, the fee for the final billing period is prorated through the
effective date of the termination and the outstanding or unearned portion of the fee is charged or refunded
to the client, as appropriate. The Firm requires thirty (30) days written notice for termination.
Fee Discretion
FAM may, in its sole discretion, negotiate to charge a lesser fee based upon certain criteria, such as
anticipated future earning capacity, anticipated future additional assets, dollar amount of assets to be
managed, related accounts, account composition, pre-existing/legacy client relationship, account retention,
pro bono activities, or competitive purposes.
Additional Fees and Expenses
In addition to the advisory fees paid to FAM, clients also incur certain charges imposed by other third
parties, such as broker-dealers, custodians, trust companies, banks and other financial institutions
(collectively “Financial Institutions”). These additional charges include securities brokerage commissions,
transaction fees, custodial fees, fees charged by the Independent Managers, margin and other borrowing
costs, charges imposed directly by a mutual fund or ETF in a client’s account, as disclosed in the fund’s
prospectus (e.g., fund management fees and other fund expenses), 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. The Firm’s brokerage practices are described at length in Item 12,
below.
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Disclosure Brochure Financial Asset Management Corporation
Direct Fee Debit
Clients provide FAM and/or certain Independent Managers with the authority to directly debit their
accounts for payment of the investment advisory fees. The Financial Institutions that act as the qualified
custodian for client accounts, from which the Firm retains the authority to directly deduct fees, have agreed
to send statements to clients not less than quarterly detailing all account transactions, including any amounts
paid to FAM. Alternatively, clients may elect to have FAM send a separate invoice for direct payment.
Account Additions and Withdrawals
Clients can make additions to and withdrawals from their account at any time, subject to FAM’s right to
terminate an account. Additions can be in cash or securities provided that the Firm reserves the right to
liquidate any transferred securities or declines to accept particular securities into a client’s account. Clients
can withdraw account assets on notice to FAM, subject to the usual and customary securities settlement
procedures. However, the Firm designs its portfolios as long-term investments and the withdrawal of assets
may impair the achievement of a client’s investment objectives. FAM may consult with its clients about
the options and implications of transferring securities. Clients are advised that when transferred securities
...