Item 5 Fees and Compensation
INVESTMENT SUPERVISORY SERVICES ("ISS")
INDIVIDUAL PORTFOLIO MANAGEMENT FEES
Our annual fees for Investment Supervisory Services are based upon a percentage of assets under
management and generally range from 0.25% to 2.00%. Portfolio management fees are billed
quarterly in advance based on total assets under management for each calendar quarter, prorated
for any inflows or outflows occurred during the quarter. These fees are generally deducted directly
from client accounts.
A minimum of $500,000 of assets under management is required for this service. This account size may
be negotiable under certain circumstances. HCR may group certain related client accounts for the
purposes of achieving the minimum account size and determining the annualized fee.
Limited Negotiability of Advisory Fees: Although HCR has established the aforementioned fee structure,
we retain the discretion to negotiate alternative fees on a client-by-client basis. Client facts,
circumstances and needs are considered in determining the fee schedule. These include the
complexity of the client, assets to be placed under management, anticipated future additional assets;
related accounts; portfolio style, account composition, reports, among other factors. The specific
annual fee schedule is identified in the contract between the adviser and each client.
Discounts, not generally available to our advisory clients, may be offered to family members and
friends of associated persons of our firm.
FINANCIAL PLANNING AND CONSULTING FEES
HCR' Financial Planning fee is determined based on the nature of the services being provided and the
complexity of each client’s circumstances. All fees are agreed upon prior to entering into a contract
with any client.
Our Financial Planning fees typically range from $500.00 to $10,000, depending on the specific
arrangement reached with the client. More specifically, our clients are assessed up to $750 an hour for
financial consultations or a fixed fee of as much as $10,000 for the development of an entire financial
plan. The balance is due upon completion of the plan.
There is a minimum annual fee of $2,500 for financial planning and consulting services. This minimum
may be waived in certain cases, such as where a client also has assets under management with HCR.
Management personnel and other related persons of our firm are licensed as registered
representatives of a broker-dealer and/or licensed as insurance agents or brokers. In their separate
capacities, these individuals are able to implement investment recommendations for advisory clients
for separate and typical compensation (i.e., commissions, 12b-1 fees or other sales-related forms of
compensation). This presents a conflict of interest to the extent that these individuals recommend that
a client invest in a security which results in a commission being paid to the individuals. Clients are not
under any obligation to engage these individuals when considering implementation of advisory
recommendations. The implementation of any or all recommendations is solely at the discretion of the
client.
GENERAL INFORMATION
Termination of the Advisory Relationship: An advisory client will have a period of five (5) business days
from the date of signing the investment advisory agreement to unconditionally rescind the agreement
and receive a full refund of all fees. A client agreement may be canceled at any time, by either party,
for any reason upon receipt of 30 days written notice. As disclosed above, certain fees are paid in
advance of services provided. Upon termination of any account, any prepaid, unearned fees will be
promptly refunded. In calculating a client’s reimbursement of fees, we will prorate the reimbursement
according to the number of days remaining in the billing period.
Mutual Fund Fees: All fees paid to HCR for investment advisory services are separate and distinct from
the fees and expenses charged by mutual funds and/or ETFs to their shareholders. These fees and
expenses are described in each fund's prospectus. These fees will generally include a management
fee, other fund expenses, and a possible distribution fee. If the fund also imposes sales charges, a client
may pay an initial or deferred sales charge. A client could invest in a mutual fund directly, without our
services. In that case, the client would not receive the services provided by our firm which are
designed, among other things, to assist the client in determining which mutual fund or funds are most
appropriate to each client's financial condition and objectives. Accordingly, the client should review
both the fees charged by the funds and our fees to fully understand the total amount of fees to be
paid by the client and to thereby evaluate the advisory services being provided.
HCR recommends different mutual fund class shares for investment in clients’ portfolios. HCR considers
a number of different factors when determining the appropriate class share including the existence of
sales loads, transaction fees, minimum investment amounts, and operating expense ratios, among
other things. Specifically, HCR will generally recommend either retail shares or institutional shares.
• Retail shares – generally have a sales charge, also called a front-end load, that is paid
immediately before any principal is invested thereby reducing the amount of your initial
investment, although the sales charge may be waived by certain broker-dealers including
those used by HCR. For example, if you invest $1,000 in a retail share with a 5.0% sales charge,
$50 would be deducted from your investment. The remaining $950 of principal would be
invested in the mutual fund. Although the operating expenses may be higher, retail shares tend
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