Item 5 Fees and Compensation
Direct Clients
GCMG generally charges management fees according to the following schedules:
Managed Accounts – Annual management fee of 2.00% for the first $5,000,000 account
value under management, and 1.50% for amounts in excess of $5,000,000 account value
under management. GCMG does negotiate its fee arrangements, and some clients will
be charged fees lower than those reflected above.
Fees charged for our asset management services are negotiable based on the type of
client, the complexity of the client's situation, the composition of the client's account (i.e.,
equities versus mutual funds), the potential for additional account deposits, the relationship
of the client with the investment adviser representative, and the total amount of assets
under management for the client. Therefore, some clients will be charged fees lower than
those reflected above.
Financial planning services are included with the management fee of client accounts.
GCMG does not charge additional expenses for financial planning. Lower fees for
comparable services may be available from other sources.
ERISA Disclosure for Retirement Planning
When GCMG provides investment advice to you regarding your retirement plan account or
individual retirement account, GCMG is a fiduciary within the meaning of Title I of the
Employee Retirement Income Security Act and/or the Internal Revenue Code, as
applicable, which are laws governing retirement accounts. The way GCMG makes money
creates some conflicts with your interests, so GCMG operates under a special rule that
requires GCMG to act in your best interest and not put our interest ahead of yours.
Additional Fees and Expenses
In connection with GCMG’s management of a client account, a client will incur fees and/or
expenses separate from and in addition to GCMG’s advisory fee. The additional fees may
include transaction charges and the fees/expenses charged by any custodian, subadvisor,
mutual fund, ETF, separate account manager (and the manager’s platform manager, if
any), limited partnership, or other advisor, transfer taxes, odd lot differentials, exchange
fees, interest charges, ADR processing fees, and any charges, taxes or other fees
mandated by any federal, state or other applicable law, retirement plan account fees
(where applicable), margin interest, brokerage commissions, mark-ups or mark-downs and
other transaction-related costs, electronic fund and wire fees, and any other fees that
reasonably may be borne by a brokerage account. The client is responsible for all such
fees and expenses. Please also refer to the "Brokerage Practices" section (Item 12) of this
Form ADV for additional information.
Fee Payment Schedule and Termination
Management fees are billed on a quarterly basis in advance. When an account is opened,
the management fee is billed for the remainder of the quarter and is based on the month
end value of the account in the month it is funded. Thereafter, the quarterly fee is based
on the market value of the account on the last business day at the end of the previous
quarter and becomes due the first day of the new quarter. Unless otherwise agreed to by
GCMG and the client, an Investment Advisory Agreement will provide that the Company’s
management fee be deducted directly from the client’s account.
Either party may terminate the Investment Advisory Agreement at any time without
penalty. Upon termination, the client will receive a refund for a pro-rated portion of the
prepaid management fee. If a client chooses to terminate the agreement within 5 business
days of signing, the client will be entitled to a full refund.
Separately Managed Accounts
GCMG charges an investment manager fee of 75 bps for Separately Managed Accounts
unless negotiated differently with the platform manager or specific client. Investment
manager fees are paid to GCMG when it acts as sub-advisor or Separate Account
Manager to an adviser.
Under these programs, an adviser has a contract with its client to perform services as an
investment manager and possibly custodian services. The adviser, in turn, establishes a
contract with GCMG to provide advisory to the adviser’s client. GCMG establishes a
contract with the adviser on the client’s behalf. GCMG does from time-to-time establish
other such relationships. The advisers that have contracted with GCMG include:
• Mount Yale Investment Advisors, LLC, separate account program & model
manager program
• Brinker Capital Inc., separate account program
• Schwab Managed Account Marketplace separate account program
• Envestnet Asset Management, Inc, separate account program,
• Janney Montgomery Scott, LLC, sub-advisory agreement & dual contract program
• Global Financial Private Capital, LLC, sub-advisory agreement
• Moors & Cabot, Inc, sub-advisory agreement
• Sawtooth Solutions, LLC, a model manager
• Kayne Anderson, sub-advisory agreement
• SmartX Advisory Services, model manager program
• LPL Financial Advisors, dual contract program
• RBC Wealth Management, dual contract program
• Congress Wealth Management, dual contract program (billed in arrears)
• Capital Wealth Advisors, dual contract & sub-advisory agreement
• IA Network, LLC, sub-advisory agreement
• Vestmark Advisory Solutions, Inc., a model manager
For the Portfolio Strategies, and Covered Call Strategy, GCMG shall receive, on a
quarterly basis in advance, an amount equal to a percentage of the fair market value as
determined by the adviser. GCMG charges an investment manager fee of 75 bps for
Separately Managed Accounts unless negotiated differently with the platform manager
or specific client.
For the Optimized Listed Option strategy, GCMG shall receive, on a quarterly basis in
advance, an amount equal to a percentage of the sum of the fair market value (as
determined by the adviser) of the assets in the Managed Accounts managed by GCMG,
...