Item 5. Fees and Compensation
Gateway offers its services on a fee basis, which includes hourly and/or fixed fees, as well as
fees based upon assets under management. Additionally, certain of Gateway’s Supervised
Persons, in their individual capacities, recommend insurance products under a commission
arrangement. 201Gateway Advisory, LLC Disclosure Brochure
Financial Planning and Consulting Fees
Gateway charges a fixed fee and/or hourly fee for financial planning services. These fees are
negotiable, but generally range from $1,000 to $15,000 on a fixed fee basis and/or from $100 to
$350 on an hourly rate basis, depending upon the level and scope of the services and the
professional rendering the advice. If the client engages Gateway for additional investment
advisory services, Gateway may offset all or a portion of its fees for those services based upon
the amount paid for the financial planning services.
Prior to engaging Gateway to provide financial planning services, clients are required to enter into
a written agreement with Gateway setting forth the terms and conditions of the engagement.
Generally, Gateway requires one-half of the financial planning fee (estimated hourly or fixed)
payable upon entering the written agreement. The balance is generally due upon delivery of the
financial plan or completion of the agreed upon services.
Investment and Wealth Management Fees
Gateway provides investment and wealth management services for an annual fee based upon a
percentage of the market value of the assets being managed by Gateway. These fees vary and
generally range from 10 to 150 basis points (0.10% – 1.50%) per annum, depending on the scope
and complexity of a client’s portfolio and the additional advisory services to be provided under the
engagement.
Gateway’s annual fee is exclusive of, and in addition to brokerage commissions, transaction fees,
and other related costs and expenses which are incurred by the client. Gateway does not,
however, receive any portion of these commissions, fees, and costs. For clients whose assets
are managed directly by the firm, investment advisory fees will be debited directly from each
client’s account. The advisory fee is paid quarterly, in advance, and the value used for the fee
calculation (billable value) is the net average daily balance of the previous three months. This
means that if your annual fee is 1.00%, then each quarter we will multiply the billable value of
your account by 1.00% then divide by 4 to calculate our fee. To the extent there is cash in your
account, it will be included in the value for the purpose of calculating fees only if the cash is part
of an investment strategy. You may make additions to and withdrawals from the Account at any
time, subject to our right to terminate an account. If assets are deposited into or withdrawn from
an account after the inception of a quarter the Management Fee payable with respect to the assets
will not be prorated based on the number of days remaining in the quarter. Once the calculation
is made, we will instruct your account custodian to deduct the fee from your account and remit it
to Gateway. While almost all of our clients choose to have their fee debited from their account,
we will invoice clients upon request.
Fee Discretion
Gateway, in its sole discretion, may negotiate to charge a lesser 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, pre-existing client,
account retention, pro bono activities, etc.).
Fees Charged by Financial Institutions
As further discussed in response to Item 12 (below), Gateway generally recommends that clients
utilize the brokerage and clearing services of Charles Schwab & Co., Inc. (“Schwab”) for
investment management accounts.
Gateway may only implement its wealth management recommendations after the client has
arranged for and furnished Gateway with all information and authorization regarding accounts
with appropriate financial institutions. Financial institutions include, but are not limited to, Schwab,
any other broker-dealer recommended by Gateway, broker-dealer directed by the client, trust
companies, banks etc. (collectively referred to herein as the “Financial Institutions”).
Clients incur certain charges imposed by the Financial Institutions and other third parties such as
fees charged by Independent Managers (as defined below), custodial fees, charges imposed
directly by a mutual fund or ETF in the account, which are 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. Additionally, for assets outside of any wrap fee programs,
clients incur brokerage commissions and transaction fees. Such charges, fees and commissions
are exclusive of and in addition to Gateway’s fee. When selecting mutual funds that have multiple
share classes for recommendation to clients, Gateway will take into account the internal fees and
expenses associated with each share class, and it is Gateway policy to choose the lowest-cost
share class available, absent circumstances that dictate otherwise. For complete discussion of
expenses related to each mutual fund, you should read a copy of the prospectus issued by that
fund. Gateway can provide or direct you to a copy of the prospectus for any fund that we
recommend to you.
Fee Debit
Gateway’s Agreement and the separate agreement with any Financial Institutions authorize
Gateway or Independent Managers to debit the client’s account for the amount of Gateway’s fee
and to directly remit that management fee to Gateway or the Independent Managers. Any
Financial Institutions recommended by Gateway have agreed to send a statement to the client,
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