Item 5 – Fees and Compensation
Adviser’s Basic Management Fee
The specific manner in which fees are charged by Adviser is established in each client’s
written agreement with the Adviser. Generally, and pursuant to contract, fees for the
management of Accounts will be based upon a percentage of the total assets in the account
(excluding margined assets). Adviser typically receives an annual management fee, between
0.20 to 1.50% of the gross asset value of the Account. All fees are negotiable.
A client may pay more or less fees than similar clients depending on the particular
circumstances of the client, size, additional or differing levels of servicing or as otherwise
agreed with specific clients.
Calculation and Deduction of Advisory Fees
With respect to accounts that Adviser manages on a discretionary basis, including the
specialized discretionary programs, clients are generally required to authorize Adviser to
directly debit management fees from client accounts quarterly. Fees for Family Wealth
Services and other non-discretionary programs are billed to clients, although frequently
clients pre-authorize their custodians to automatically deduct the fees from the client’s
account upon receipt of an invoice, and to make payment to Adviser. Management fees
are deducted or billed, as applicable, (i.e. quarterly).
Other Fees and Expenses
Adviser’s fees are exclusive of brokerage commissions, transaction fees, and other related
costs and expenses which shall be incurred by the client. The impact of mark-ups and mark-
downs shall also be incurred by the client. Clients will also incur certain charges imposed by
custodians, brokers, third party investment and other third parties such as fees charged by
managers, custodial fees, deferred sales charges, odd-lot differentials, transfer taxes, wire
1 Value of non-discretionary assets include $25,943,562 corresponding to assets managed pursuant to the terms of
“Consulting Services Agreement.” Such assets have not been considered in the Adviser’s calculation of regulatory assets
under management included in its Form ADV Part 1.
transfer and electronic fund fees, and other fees and taxes on brokerage accounts and
securities transactions. All such charges, fees, and commissions are in addition to Adviser’s
fee, and Adviser shall not receive any portion of these commissions, fees, and costs. While
IWA does not receive these fees, Adviser’s related persons, including its affiliated broker-
dealer, will receive a portion of these commissions, fees and costs (See items 10 and 12 for
further details on related parties).
More specifically, IWA, consistent with its duties as an Adviser, may send brokerage orders
to its affiliate, Insigneo Securities, which is owned by Insigneo Financial Group, LLC and
indirectly owned and controlled by Raul Henriquez; thus ultimately creating a common
ownership between the entities. Insigneo Securities maintains a trading desk which, among
other things, supports IWA in trading fixed income securities, structured products, amongst
other securities. Upon IWA processing orders through Insigneo Securities and those orders
are executed, your account will be charged a flat service fee reflected as a service charge on
your confirmation. This charge is utilized in part to cover certain operational and execution
costs incurred by the Insigneo Securities trading desk.
Payment of Fees
Depending on the custodian’s capacities to calculate advisory fees, fees for all programs are
paid in advance or in arrears. In the case of Family Wealth Services or pursuant to an
individually negotiated arrangement between the Adviser and a specific client, advisory fees
are billed in arrears. However, no prepaid fees are charged six months or more in advance.
If an advisory contract is terminated before the end of the billing quarter, any pre-paid fees
will be refunded on a pro rata basis based on the number of days in the quarter after
termination. Fees are billed to clients quarterly in arrears for Family Wealth Services with the
exception of flat-fees which are charged in advance.
Compensation for the Sale of Securities
Some of Adviser’s supervised persons accept compensation for the sale of securities or other
investment products, including asset-based sales charges or service fees from the sale
of mutual funds, in their individual capacities as registered representatives of Adviser’s
affiliated broker-dealer Insigneo Securities. Supervised persons of Adviser who are
solely registered/associated with IWA do not receive such compensation with respect to
accounts managed or advised by Adviser.
Rebates and/or Trailer Fees
Domestic Mutual Funds – Rebates/Trailers
A number of the Adviser’s associated persons are also dually associated as registered
Effective April 1, 2019 IWA no longer permits or offers mutual fund A shares to its clients as
they typically carry 12b-1 fees. In the unlikely event that a mutual fund recommendation is
made that allows for the Adviser’s associated person’s receipt of 12b-1 rebate or trailer fees,
such fee will be reimbursed to the client.
The Adviser’s associated persons receipt of 12b-1 rebate or trailer fees in association with
advisory activities is considered a material conflict that would require clear disclosure to you
since your advisory representative may have selected a share class of a mutual fund that
paid a rebate, retrocession or trailer (which is passed in part to your advisory representative
through their registered capacity with Insigneo Securities) when another less costly share
class is available (that does not pay a trailer fee) provided related disclosures are made
available accordingly. Therefore, when there is a lower-cost share class available that does
not charge a 12b-1 fee or similar charge (or charges a lower fee), it is usually in the client's
best interest to invest in the lower-cost share class rather than the 12b-1 fee paying share
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