ITEM 5. Fees and Compensation
A. Advisory Fees and Billing
PORTFOLIO MANAGEMENT SERVICES
Formidable Asset Management will assess a management fee (the “Management Fee”) to
provide discretionary and non-discretionary portfolio management services. The
management fee is an annual fee based on a percentage of the client’s assets under
management.
Clients are assessed an annual Management Fee ranging from 0.50% to 2.00% (per
annum). The Management Fee is billed quarterly in advance. The fees are based on the
level of complexity involved in managing the client’s assets.
The Management Fee will be calculated and charged on a quarterly basis, in advance,
based upon the market value of a client’s assets on the last day of the previous quarter,
depending on the amount of assets under management, related accounts, or other
relevant factors.
The payment of fees will be debited from the client’s account in accordance with the IA
Agreement, and are paid by the qualified custodian holding the client’s funds and
securities. Payment of portfolio management fees will be made directly from the client
account by the custodian provided that the following requirements are met:
• The client provides written authorization permitting the fees to be paid
directly from client’s account held by the custodian. The Firm does not have
access to client funds for payment of fees without client consent in writing.
Under certain circumstances and upon request by the client, a direct
bill/invoice will be sent to the client.
• The custodian agrees to provide the client a statement, at least quarterly,
indicating all amounts dispersed from the account including the amount of
the Management Fee paid directly to the Firm.
Formidable Asset Management reserves the right to discount fees based on the needs
and circumstances of clients. All of the above-referenced fees are negotiable.
Management Fees and services are separate and distinct from financial planning fees and
services.
Formidable Exchange Traded Funds
For serving as the investment adviser to the Formidable Funds, each Fund will pays
Formidable a management fee at an annual rate stated in the table below, based on the
daily average net asset value of the portfolio. Fund investors may also be subject to
additional fees and expenses which are more fully explained in respective Fund
prospectuses.
• Formidable ETF 1.19%
• Formidable Fortress ETF 0.89%
• Formidable Dividend and Income ETF 0.90%
Client Investments - Formidable ETFs
Under normal circumstances and in accordance with the established Investment Plan and
risk tolerance of certain of the Formidable Asset Management’s clients, the Firm may
recommend investments in the Formidable ETFs. Clients investing in the Funds will be
subject to both the Fund’s management fees (which are payable to Formidable Asset
Management as adviser to the Funds and set forth above) and the Firm’s portfolio
management fees. The receipt of additional compensation from the Funds provides an
incentive for Formidable Asset Management to invest client assets in the Funds. This
potential conflict of interest is disclosed to clients in this Form ADV. The fees charged for
portfolio management services, together with fees paid to Formidable Asset Management
indirectly through the Funds, may be higher than the fees charged by other investment
advisers for similar investment advisory services. Clients may also independently invest
in Fund shares through other financial services firms/broker- dealers.
ERISA Accounts
In order to comply with ERISA Prohibited Transaction Exemption 77-4, the Firm waives
that portion of the fees otherwise payable to Formidable Asset Management as a portfolio
management fee, to the extent that assets are invested in the Fund. Formidable Asset
Management is paid an investment advisory fee by the Fund, which includes advisory fees
based on assets of retirement participants invested in the Fund. As a result, retirement
participants invested in the Fund pay only one advisory fee, based on the underlying
investment advisory fees paid by the Fund.
Formidable Model Portfolio Service – Subscription Service:
Formidable Asset Management does not charge an overlay fee for use of the Formidable
Model Portfolio Service (The Formidable Series). While no overlay fee is charged for the
service, Formidable ETFs are included in the model portfolios. In this case, the Firm will
receive the normal management fee for those assets invested in the Funds as described in
the Fund’s prospectus. Subscribers accessing The Formidable Series models through a
Third-Party Platform may be charged a fee from the platform provider that is separate
and distinct from any management fee collected by Formidable Asset Management for
investments in Formidable ETFs.
FINANCIAL PLANNING AND CONSULTING SERVICES
Financial planning and consulting fees are negotiable between the client and
Formidable Asset Management; however Formidable Asset Management typically
charges an hourly fee of $250. The hourly fee is negotiable depending on the scope and
complexity of the plan, the client’s situation and objectives. An estimate of the total
time/cost will be determined at the start of the advisory relationship. In limited
circumstances, the time/cost could potentially exceed the initial estimate. In such cases,
the Firm will notify the client and may request that the client approve the additional fee.
All consulting fees are due upon completion of services.
Formidable Asset Management may waive or lower these fees where the client has
engaged Formidable Asset Management for other advisory services or for such other
reasons as determined by the Firm in its discretion. Clients are not obligated to implement
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