ITEM 5 | FEES AND COMPENSATION
Investment Advisory and Management Services
The fee for IAS and GEM investment management services are based on a percentage of the
client’s assets as referenced on the schedules to the IAA.
The maximum fees for IAS, GEM investment management services and the GEM platform fee
are 1.5%, 1.00% and 0.50%, respectively. For clients of certain GCM Investment Adviser
Representatives, a maximum administrative fee of up to $16.75 a quarter or $67 annually is
charged on accounts to cover the cost of account administration and reporting. Refer to your
agreement for specifics. The maximum fee for Optional Investment Strategy Overlay (e.g.,
tax management) is 0.15%. Fee assignment is negotiable and is based on account value.
Unless indicated otherwise on the IAA, all fees are deducted from the account and payable to
GCM.
Fees may be paid in arrears or advance, as indicated on the client’s IAA. Account fee payments
are due and assessed at the beginning of each quarter based on the value of the assets under
management as of the close of business on the last business day of the preceding quarter as
valued by an independent pricing service, where available, or otherwise in good faith as
reflected on a client’s quarterly portfolio evaluation report. Additional deposits and
withdrawals will be added or subtracted from portfolio assets which may lead to an adjustment
of the advisory fee. Fees paid in advance will be prorated should the account be terminated
before the end of the billing period; the refund will be calculated based on number of days in
the billing period.
Accounts with alternative investments, including hedge funds and managed futures, will be
assessed an annual alternative investment administrative fee. This fee is variable depending
on custodian and will be disclosed on an account agreement.
GCM makes available to clients the Cantor Fitzgerald Cash Management Program (“CF Cash”)
offered by StoneCastle Network, LLC (“StoneCastle”), an affiliate of StoneCastle Cash
Management, LLC. The CF Cash program allows customers the ability to protect their money
by placing it in deposit accounts at banks, savings institutions and credit unions (collectively,
“Insured Depositories”) in a manner that maintains full insurance of the funds by the Federal
Deposit Insurance Corporation or National Credit Union Administration, whichever is
applicable. Funds will be deposited within StoneCastle’s network of Insured Depositories.
Cantor Fitzgerald requires no minimum deposit to open a CF Cash account. GCM is entitled to
earn a fee from StoneCastle if clients participate in this program and this fee will vary based
on the income earned by participating clients. GCM will assist clients in signing up for this
program and facilitating the transfer of funds between the client’s like-named accounts.
In addition to the fees stated above, accounts may incur transaction costs, retirement plan
administration and/or custodial fees, deferred sales charges on mutual funds initially
deposited in the account, mutual fund distribution fees and other operating expenses as
described in the fund’s prospectus. The account may be assessed a transaction charge to
defray the costs associated with trade execution. Although the transaction charge is identified
under the commission column on the confirmation, it represents a reimbursement of
transaction costs and not commissions. GCM’s IAR does not receive any portion of the
transaction charge. The transaction charges are set out in the Client Agreement and are
negotiable. Refer to the Client Agreement for additional information.
GCM reserves the right to waive or reduce any of these fees in its sole discretion. All fees
apply to cash and cash equivalents. GCM’s employees and family-related accounts are
charged a reduced fee for GCM’s services, and, as result, similarly situated clients could pay
different fees. In addition, similar advisory services may be available from other investment
advisers for similar or lower fees. Any Questions: GCM’s CCO, Quentin Stoker, remains
available to address any questions that a client or prospective client may have regarding
advisory fees.
Financial Planning and Consulting Fees
GCM charges fees on a per plan basis (flat rate fee) and the amount of the fee is stated in the
Client Agreement.
The flat rate fee for financial planning and consulting services ranges from $2,500 to $20,000.
On a case-by-case basis, GCM may also charge a higher fee depending upon the complexity
of the plan. The fee is negotiated between the IAR and client and is stated in the Client
Agreement. GCM and the IAR share in the fee. The client may elect to pay the fee upon
execution of the Client Agreement, upon delivery of the services requested, or a combination
of up front and in arrears.
The client may terminate the agreement without penalty within five days of execution. After
the five-day period, the client may terminate the agreement at any time and a refund of
unearned fees, if any, will be made based upon the time and effort completed prior to
termination of the agreement. The agreement terminates upon delivery of the plan or upon
completion of consulting services. No refunds will be made after completion of the plan or
delivery of the consulting services.
Private Equity Funds
GCM’s annual fee for investment management services with respect to investments in the
GEM Fund I and GEM Fund II is equal to 1% annually, based on original capital raised. This
fee will be paid quarterly in arrears based on each investors’ allocated investment. GEM is the
General Partner of both funds and GEM shall receive a performance fee equal to 50% of
investors’ profits upon liquidation of the investment, but only to the extent such profits exceed
investor’s original capital contributed, plus a 5% preferred return on capital.
GCM’s annual fee for investment management services with respect to investments in the
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