ITEM 5 FEES AND COMPENSATION
INVESTMENT MANAGEMENT FEES
Each client executes an Investment Management Agreement, Financial Planning Agreement (if
applicable), and Fee Agreement outlining the scope of services we will provide and the fees we
will charge for those services.
The annual investment advisory fees for the majority of Frontier’s clients shall be paid quarterly,
in advance, based upon the market value of the assets on the last business day of the previous
quarter. In limited instances, Frontier’s investment advisory fees are paid quarterly in arrears,
based on the market value of the assets on the last business day of the previous quarter. When
billed in arrears, the ending value of the previous period is used for the AUM. Please Note: On
initially establishing an account with Frontier, and a corresponding custodial account with TD
Ameritrade and/or Schwab, Frontier may be charged a custodial fee by such custodians as of the
date the account is established. This provides an economic incentive for Frontier to bill clients for
services rendered from the date the account is established, in order to recoup such expenses.
Frontier’s fee will generally begin accruing as of the date the client account is linked and funded
with the custodian. Frontier’s Chief Compliance Officer, Jessica Cafferata, remains available
to address any questions that a client or prospective client may have regarding the above.
Frontier runs quarterly billing for accounts on a monthly basis. Depending on when a client
account starts with Frontier, this determines which quarterly cycle the account / household is
prorated. Below are the three different billing cycles:
• January / April / July / October
• February / May / August / November
• March / June / September / December
Billing for client accounts is run on the first business day of the month and uses account values
from the previous business day. Frontier calculates its management fee against all assets in the
investment account, unless specifically excluded. Therefore, fee calculations include accrued
interest, cash balances invested in money market funds, short-term investment funds, exchange
traded funds, mutual funds, and all other investment holdings. The exact services and fees will be
agreed upon and disclosed in the Investment Management Agreement prior to services being
provided. Frontier’s fee is not adjusted upward or downward to account for cash flows in and out
of a client account, nor for growth within such an account. It is possible client fee schedules may
differ from our standard fee schedule depending on what the client signed compared to our
standard fee schedule.
Frontier’s balances used to calculate advisory fees may be different from custodian account
statements. The Firm’s fee billing is based on account values including accrued interest, which is
in excess of the balance labeled account value on client statements. Additionally, the Firm’s billing
system uses trade date balances, whereas the client statements are on settlement date balances. The
Firm will use information provided by Tamarac who uses the custodian prices when available as
its primary pricing source for purposes of valuing client portfolios, both for fee billing and
investment performance calculation purposes. Tamarac uses the pricing from the custodian with
the largest number of financial accounts with that holding. Therefore, pricing differences among
custodians may occur and statement account values may not match what Tamarac reports and what
the Firm relies on for fee calculation. If there is a discrepancy between custodians, Tamarac
defaults to Schwab pricing. Finally, if custodian prices are not available, then Tamarac uses their
license of Bloomberg to retrieve prices, possibly creating additional variances between custodial
statement balances and fee charges compared to the Firm’s. Our value only includes the
transactions that have occurred through the previous business day when the bill is
run. Occasionally there are additional transactions such as dividends that occur on or around the
first of the month get back dated to a transaction date prior to month end that were not booked at
the time we ran our billing statements that may reflect on client statements.
Clients may elect to have Frontier’s advisory fees deducted from their custodial account (or from
plan assets if it’s an ERISA plan engagement). For ERISA plan engagements, trustees may choose
to be billed and pay the fee from outside the plan assets. Both Frontier’s Investment Management
Agreement and the custodial/clearing agreement may authorize the custodian to debit the account
for Frontier's investment advisory fee and to directly remit that management fee to Frontier in
compliance with regulatory procedures. In the limited event that Frontier bills the client directly,
payment is due upon receipt of Frontier’s invoice. Frontier shall deduct fees and/or bill clients
quarterly in advance, based upon the market value of the assets on the last business day of the
previous quarter.
Frontier, in its sole discretion, may charge a lesser investment management fee based upon certain
criteria (i.e. anticipated future earning capacity, anticipated future additional assets, dollar amount
of assets to be managed, related accounts, account composition, competition, prior fee schedules,
negotiations with client, etc.). See additional disclosure at Item 7 below.
Frontier believes that its annual investment management fee is reasonable in relation to: (1) the
advisory services provided under the Investment Advisory Agreement; and (2) the fees charged by
other investment advisors offering similar services/programs. However, Frontier’s annual
investment management fee may be higher than that charged by other investment advisors offering
similar services/programs. In addition to Frontier’s annual investment management fee, the client
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