Item 5 Fees and Compensation
A.
HUDSON VALUE PARTNERS WRAP PROGRAM
The Registrant provides investment management services on a wrap fee basis in accordance
with the Registrant’s Program, the services offered under, and the corresponding terms and
conditions pertaining to, the Program are discussed in the Wrap Fee Program Brochure, a
copy of which is presented to all prospective Program participants. Under the Program, the
Registrant is able to offer participants discretionary investment management services, for
a single specified annual Program fee, inclusive of trade execution, custody, reporting, and
investment management fees. The current annual Program fee ranges from negotiable to
1.25%, depending upon the amount and type of the Program assets.
Fee Differentials. The Registrant shall receive an investment advisory fee based upon a
percentage (%) of the market value of the assets placed under management (between
negotiable and 1.25%). However, fees shall vary depending upon various objective and
subjective factors, including but not limited to: the representative assigned to the account,
the amount of assets to be invested, the complexity of the engagement, the anticipated
number of meetings and servicing needs, related accounts, future earning capacity,
anticipated future additional assets, and negotiations with the client. As a result, similar
clients could pay different fees, which will correspondingly impact a client’s net account
performance. Moreover, the services to be provided by the Registrant to any particular
client could be available from other advisers at lower fees. All clients and prospective
clients should be guided accordingly.
Before engaging Registrant to provide investment advisory services, clients are required to
enter into an Investment Advisory Agreement, setting forth the terms and conditions of the
engagement (including termination), which describes the fees and services to be provided.
FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
The Registrant may determine to provide financial planning and/or consulting services
(including investment and non-investment related matters, including estate planning,
insurance planning, etc.) on a stand-alone fee basis. Registrant’s planning and consulting
fees are negotiable, but generally range from $1,500 to $15,000 on a fixed fee basis, and
from $250 to $450 on an hourly rate basis, depending upon the level and scope of the
service(s) required and the professional(s) rendering the service(s).
RETIREMENT PLAN CONSULTING SERVICES
The terms and conditions of the Registrant’s retirement plan consulting services shall
generally be set forth in a Retirement Plan Consulting Agreement between the Registrant
and the plan sponsor. Registrant’s retirement plan consulting fees are calculated as a
percentage of the value of plan assets, generally between negotiable and 1.00%.
B. Clients may elect to have the Registrant’s advisory fees deducted from their custodial
account. Both Registrant's Investment Advisory Agreement and the custodial/clearing
agreement may authorize the custodian to debit the account for the amount of the
Registrant's investment advisory fee and to directly remit that management fee to the
Registrant in compliance with regulatory procedures. In the limited event that the
Registrant bills the client directly, payment is due upon receipt of the Registrant’s invoice.
C. As discussed below, unless the client directs otherwise or an individual client’s
circumstances require, the Registrant shall generally recommend that Pershing serve as the
broker-dealer/custodian for client investment management assets. Broker-dealers such as
Pershing charge brokerage commissions and/or transaction fees for effecting certain
securities transactions. Clients who choose to engage the Registrant on a wrap fee basis
will not incur brokerage commissions and/or transaction fees in addition to the Registrant’s
advisory fee.
Relative to all mutual fund and exchange traded fund purchases, all clients will incur
additional expenses with regard to charges imposed at the fund level (e.g., management
fees and other fund expenses).
Furthermore, clients who elect to receive trade confirmations and account statements by
regular mail (paper statements) rather than electronically may also incur additional fees by
their custodian.
Asset-Based Pricing Arrangements and Limitations. The Registrant generally requires
clients to enter into an “Asset-Based” pricing agreement with the account broker-
dealer/custodian. Under an “Asset-Based” pricing arrangement, the broker-
dealer/custodian charges the client a fixed percentage fee for all account
commissions/transactions based on the amount of assets placed in custody and/or on the
broker-dealer/custodian’s platform, and not based upon the number of transactions
executed. Generally, in an Asset-Based pricing arrangement, the applicable fixed
percentage fee decreases as the account value increases. In the alternative, the broker-
dealer/custodian could charge a separate commission/transaction fee upon the execution of
an account transaction. This is referred to as a “Transaction-Based” pricing arrangement.
Under a Transaction-Based pricing arrangement, the amount of fees charged by the broker-
dealer/custodian to the client will vary depending upon the number of and type of
transactions that are placed for the account. Under either scenario, the Registrant shall be
responsible for the fees charged by the respective broker-dealer/custodian.
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