Item 5 – Fees and Compensation
Geneva's fee for providing investment advisory services is based upon the market value
of the client’s assets. The standard fee schedule for Geneva is 1.50% of the value of the
client's assets invested in Equity strategies and 0.50% of the value of client’s assets
invested in Fixed Income strategies. Fee schedules on legacy accounts and accounts
valued over $5 million may differ. Geneva bills its clients quarterly in advance. For
certain clients, including group retirement plans, Geneva may charge a minimum fee
which may be more than the 1.50% of the value of the client’s assets invested.
For certain clients, Geneva may subtract a portion of the custodial costs that such clients
pay to their custodian from its fees. This is available only for those clients who have
retained our preferred custodians, subject to account size limitations, and whose assets
are invested for the full quarter. For certain other clients, Geneva will charge a fee and
the client will be responsible to pay all transaction and related costs to the custodian. In
addition, all Firm accounts will incur brokerage and other transaction costs related to the
purchase and sale of securities. See Item 12, Brokerage Practices of this Brochure for a
discussion of the Firm’s brokerage and trade execution practices.
Geneva, in its sole discretion, may charge different investment management fees 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,
negotiations with client, etc.).
Under certain circumstances, fees may be negotiated or reduced; however, this is more
likely for clients for whom Geneva does not already reduce their fees to take into account
incurred custodial costs. You may authorize Geneva to deduct fees from your account on
a quarterly basis or in certain circumstances clients may be billed quarterly for their
advisory fees. Clients may be billed during mid-quarter if there is a significant inflow of
assets into an existing account. In such a situation the fee would be in advance for the
remaining days left in the quarter.
Each mutual fund pays fees, borne by its shareholders, to the manager of the mutual fund.
Geneva bases its management fee relating to mutual fund investments on a percentage of
the market value of mutual fund assets in the client’s account. As a result, a client whose
account is invested in a mutual fund will bear the client's proportionate share of the
mutual fund's fees and expenses and pay a management fee to Geneva for the same
investment. In many cases, the client could invest in the same mutual fund directly or
through another agent or broker, without paying a fee to Geneva, but would then not have
the benefit of the advice, review and monitoring Geneva provides.
For clients investing in the Geneva Advisors mutual fund family for which Geneva acts
as the investment adviser, no fee shall be charged on these assets. There may be months
where an initial fee was paid on uninvested cash which then is invested in the mutual
fund or where securities are sold and invested in the mutual fund for which a partial
month fee is paid until the investment is made.
Geneva may terminate the management agreement by written notice to the other with 30
days’ notice. The management fee will be pro-rated for the time remaining in the quarter
after the elapsing of the thirty one day notice. Any unearned fees will be refunded to the
client.
Geneva does not serve as custodian for any client accounts, however, Geneva has
negotiated an arrangement(s) with several firms to serve as custodian for client accounts.
Geneva clients are not required to retain these firms as the custodian for their account,
although Geneva encourages clients to do so. The Firm does not accept nor receive
compensation for the sale of securities.
Geneva may waive a portion of its fee for client accounts held at select custodians with a
minimum account billable market value of $250,000 to reimburse the client for a portion
of the asset based pricing costs they incur. This is based on a minimum account balance
of $250,000 for custodial accounts being billed on an asset based pricing fee.
Please Note: Conflict of Interest: Although Geneva will allocate client assets consistent
with the client’s designated investment objective, the fact that Geneva earns a higher fee
for management of securities other than fixed income as referenced in the above fee
schedule, Geneva has a conflict of interest since it will present an economic incentive to
allocate more assets to those types of securities from which it will earn a higher advisory
fee. Geneva’s Chief Compliance Officer, Kurt Newsom, Esq, remains available to
address any questions regarding this conflict of interest.
Wrap Fee Arrangements
As noted in the previous section, Geneva may be retained under "wrap fee" arrangements
offered by unaffiliated financial institutions, in which the financial institution may
recommend retention of our firm as investment adviser, pay our investment advisory fee
on behalf of the client, monitor and evaluate our advisory services, and provide custodial
services for the client's assets, or provide any combination of these or other services, all
for a single fee paid by the client to the wrap-fee sponsor. For more information on our
participation in a "wrap fee" arrangements, see “Item 12 – Brokerage Practices” below.
Clients who participate in wrap fee arrangements should carefully review the brochure
presented by the sponsor of the program.
Private Investments Products
The Firm or certain Principals or associated persons of the Firm are affiliated either
directly or indirectly as the General Partner of private investment partnerships that are
available to advisory clients. These are private placements that are exempt from
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