Galapagos Advisory LLC

Item 5: Fees and Compensation
The Firm typically charges a management fee on a per annum basis of the client’s net assets under
management by the Firm, including amounts invested in cash and investments in Galapagos Funds,
or investments offered by other Galapagos Group members, The management fee is calculated
quarterly, as per the agreed fee schedule, based on the average of month-end values of the
previous three months, as adjusted on a pro-rated basis for contributions and withdrawals during
the quarter and charged in arrears during the month following the end of the quarter. Account
valuations are determined by the custodian or other independent third party. The Firm, in its
discretion, may impose a minimum fee for managing smaller accounts.
Fees generally range from 0.5% to 1.5% but may be negotiated at our discretion and may vary
from client to client based on the assets managed, related accounts, and other services provided
as set out in the Client Agreement. The Firm has also agreed with other members of the Galapagos
Group that manage Galapagos Funds that the management fees charged to the Firm’s clients who
invest in those funds will typically be reduced by 0.5% (subject to negotiated adjustments) per
annum to mitigate the layering of fees resulting from such an investment. The fees paid to the
Firm may also be reduced for employee and family member accounts. On a case-by-case basis
involving large, sophisticated clients, the Firm will agree to charge a negotiated performance-based fee
instead of a management fee based on assets under management. See also the discussion of
Performance Fees in Item 6 below.
The Client Agreement authorizes us to deduct advisory fees from a client’s custodian account.
The fees will be reflected in the client’s custodian account statements. We request that clients
carefully review their custodian statements and inform us of any discrepancies.
An asset-based fee may cost more than a transaction-based fee, but clients may prefer it if they
want ongoing advice or someone to make investment decisions on their behalf. Clients should
be aware that the same or similar investment services may be available from other investment
advisors for a lower or higher fee. Although the Firm believes the fees offered are competitive
with other investment advisors and/or investment sources, we make no guarantee that the
aggregate cost of a particular program will be lower than that available elsewhere.
When appropriate, we may recommend using margin and/or option transactions. As these
investment strategies involve a certain degree of additional risk, they are only recommended
when consistent with the client’s objectives and risk tolerance. The use of margin also results in
interest charges, in addition to all other fees and expenses associated with managing the account.
Although account statements for margined accounts may reflect a negative amount, our advisory
fee is based on the account’s absolute market value. This poses a conflict of interest because the
Firm benefits by receiving a higher fee based on the account’s absolute market value.

Minimum Fees/Flat Fees
For certain small discretionary and non-discretionary accounts, Galapagos may impose a
minimum fee threshold of $785 per quarter or negotiate a flat fee. Both minimum fees and flat
fees are payable quarterly in arrears.

Payment of Special Services Fees
The Firm does not charge “set up” or termination fees. If applicable, any such fees would be
charged by the client’s custodian. Clients who terminate their relationship with the Firm will be
charged only a prorated amount for any unbilled management fees.
Fees for consulting, financial planning, reporting, and special projects are charged on a flat fee,
per project, hourly, or as negotiated with the client based on a minimum hourly fee ranging from
USD$500-$800. Galapagos Advisory’s fee will be based upon various factors, including but not
limited to the services requested by the client, the size of the portfolio, the type of holdings in
the portfolio, and any pre-existing relationship with the client. Since these are customized
services and separate from the other services we provide to clients, the fees will vary by client
and by project. Fees for consulting, financial planning, and other services will be invoiced to the
client upon completion of the project.

Portfolio Consolidation Fees
Pricing for the Galapagos portfolio consolidation service is a fixed dollar amount per year based
on the number of custodians, the number of investment positions, and the ease of access to the
data (varying from electronic data interface to manual input from printed statements). Pricing
ranges from $1,000 to $10,000 per quarter; a basis points-based fee can be implemented. At our
discretion, we may discount the fee and/or offset all or a portion of the fee against fees paid for
investment management services.

Client Responsibility for Third-Party Fees
Clients will generally incur certain charges imposed by custodians, brokers, and other third
parties, such as fund managers. These include third-party manager fees, custodial fees, deferred
sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund transfer fees,
and other fees and taxes on brokerage accounts and securities transactions. Clients are
responsible for all third-party fees. Such fees are separate and distinct from the fees and expenses
charged by the Firm. See Item 12 Brokerage Practices for additional information.
In addition to the Firm’s advisory fee, each mutual fund or ETF in which a client's assets may be
invested also charges its own management fee. Specific fees and expenses are described in the
respective fund’s prospectus. Depending on the fund, a client may be able to invest directly in
the shares of a mutual fund without incurring any sales or advisory fees.
Mutual fund companies generally offer multiple share classes of the same fund. Share classes are
...

Item 7: Types of Clients
Galapagos Advisory offers advisory services to individuals, high-net-worth individuals, trusts,
corporations, and institutional investors. We generally require a minimum account size of
$250,000. At our sole discretion, we may waive or lower the required account minimum. We
also offer sub-advisory services to institutional clients.