Item 5. Fees and Compensation
A. Fees and Compensation
Managed Account Clients fees are negotiated on a client-by-client basis and are determined based
upon a number of factors including, but not limited to, the amount and type of work involved, the
size of the relative portfolios and the amount of our resources that we anticipate dedicating to
providing the services.
Advisory fees are generally levied on the value of the total assets in a client’s account, including
assets that are financed with leverage or margin, if any, without any offset for the liability incurred;
some clients pay fees on certain assets or accounts (e.g., securities accounts that we advise on) and
not on others (e.g., cash accounts). A Managed Account Client’s annual advisory fee can range up
to 1.5% of assets under management.
On an individually-negotiated basis, we charge some Managed Account Clients an incentive or
performance fee or allocation, which entitles us to additional compensation based on the increase
in value of those clients’ accounts (or based on other metrics that we agree to with those clients).
Some clients have individually-negotiated flat fee structures that are not based on assets under
management and, in certain circumstances, result in clients paying fees that are higher than those
referenced above.
Managed Account Clients that invest in ICONIQ Private Funds pay fees and compensation
assessed by those funds, which may be higher than those referenced above. In addition, the value
of a Managed Account Client’s investment in an ICONIQ Private Fund generally is included in
the advisory fee calculation for that client, which results in that Managed Account Client paying
multiple layers of fees (also discussed in Item 5.B). In some cases, on an individually-negotiated
basis, we reduce or waive either managed account advisory fees or fees paid as an investor in an
ICONIQ Private Fund.
In some cases, we also charge administration fees.
Advisory and other fees generally may be modified by us upon notice to clients.
Invoices, Assessments. Investment advisory fees are typically deducted from Managed Account
Client accounts on an annualized basis, quarterly in arrears, based on the value of the client account
on the time-weighted daily average of the quarter, but billing matters may be individually
negotiated.
Additional Fees. Managed Account Clients may be charged additional advisory or other related
fees (“Additional Fees”) in connection with the selection and appointment of External Portfolio
Managers. We generally retain the authority to agree on our Managed Account Clients’ behalf to,
and to charge, Additional Fees, provided that (i) such Additional Fees are no more than the fees
such External Portfolio Managers would typically charge their other clients under similar
circumstances, regardless of where such client relationships originated; and (ii) we receive no
portion of such Additional Fees. The fee provisions of the External Portfolio Managers’ advisory
agreement(s) and Form ADVs governing their specific advisory programs and the fee
confirmations that Managed Account Clients receive will control if there are any inconsistencies
between the terms of those documents and a Managed Account Client’s agreement with us. (Fees
for non-advisory services (and related expenses) are discussed in Item 5.B). Note that these
Additional Fees are separate from the administration fees we disclose in the first section of this
Item 5.A.
External Portfolio Manager Fees. As a convenience to clients, we may, but are not required to,
bundle our advisory fee with an External Portfolio Manager’s advisory fees and pay that External
Portfolio Manager directly; in such a case, Managed Account Clients would see one advisory fee
comprised of our and the External Portfolio Manager’s fee on an overall statement. External
Portfolio Manager advisory fees are not set by us and their fees, method of billing (e.g., in advance
or arrears), manner of billing (e.g., quarterly or monthly) and basis for billing (e.g., time-weighted
daily average versus the last day of a calendar quarter or month) will differ from our billing
practices in certain circumstances. Managed Account Clients will receive an explanation of an
External Portfolio Manager’s billing practices from us or from an External Portfolio Manager
through the External Portfolio Manager’s Form ADV, client agreement or other documentation.
Clients have the ability to directly access custodian statements and are sent independent custodial
statements at least quarterly, showing all disbursements from the account, including amounts
deducted or withdrawn to satisfy the advisory fees due to us or any External Portfolio Managers
(if they bill separately).
Termination. Generally, we or a Managed Account Client may terminate a client agreement at any
time by providing 30 days’ notice, in writing, to the other party. After notice of termination has
been received by the other party, we shall continue to charge advisory and other fees up to and
including the actual date of termination (and any performance or incentive fee would be computed
at the date of termination), although these provisions are subject to the terms of a given client
agreement. To the extent a client has invested in a vehicle controlled by, or otherwise has assets
under the control of, an External Portfolio Manager, that External Portfolio Manager’s termination
policies will govern with respect to those assets and may differ from our policies and practices.
Managed Account Clients are encouraged to read each External Portfolio Manager’s Form ADV,
advisory agreement, and other disclosure documents relating to an External Portfolio Manager or
External Fund for further information. Termination of a client agreement generally has no effect
on an investment in an ICONIQ Private Fund or an External Fund (however, any discount on the
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