Item 5 Fees and Compensation
Family Office Services Fees
Basic fee schedule:
The specific manner in which fees are charged by Adviser is established in each client’s written
agreement with 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 (including margined
assets). Adviser typically receives an annual management fee, between .25% and 1.00% of the
net asset value of the Account. All fees are negotiable. At times, management fees may be flat
or fixed upon negotiation.
Basic Management Fee Schedule
Account Value Fee Percentage
Over $50,000,000 .25%
$25,000,000 to $49,999,999 .50%
$10,000,000 to $24,999,999 0.75%
Up to $9,999,999 1.00%
Family Wealth Consultation – Our annual fee is based upon a percentage of assets under
management and generally ranges between 0.25% and 1.00%.
A performance-based fee can be negotiated with the client based upon the particular arrangement with
the client. Not all clients will pay a performance-based fee. Our performance-based fee schedule is
based on a percentage of assets under management (ranging from 0.25% - 0.50% annually) plus
10% of net return over 3 month LIBOR.
The fees charged for this service will be determined by the client's individual circumstances and
will never exceed 25% of the account's performance above an appropriate index. The actual
fees are disclosed to the client before entering into this type of arrangement and are detailed in
the client's Investment Advisory Agreement. The percentage of assets under management is
billed quarterly, in arrears.
The client must understand the proposed method of compensation and its risks prior to entering
into the contract. Accordingly, clients paying performance-based fees are directed to the
"Performance-Based Fees" section (Item 6) below for more comprehensive disclosures, including
potential conflicts of interest resulting from this type of compensation.
To qualify for this type of fee schedule, a client must either demonstrate a net worth of at least
$2,200,000 or must have at least $1,100,000 under management.
Clients who elect to terminate their contracts will be charged a performance-based fee based on
the performance of the account for the measuring period going back from the termination date
and pro-rated from the date on which the performance-based fee was previously assessed by
our firm.
In measuring the client's assets for the calculation of performance-based fees, we shall include:
for securities for which market quotations are readily available, the realized capital losses and
unrealized capital losses of securities over the period and, if the unrealized capital appreciation
of the securities over this period is included, the unrealized capital depreciation of securities over
the period.
The performance-based fee can create an incentive for IIS to recommend investments which can
be riskier or more speculative than those which would be recommended under a different fee
arrangement.
PERFORMANCE-BASED FEES WILL ONLY BE CHARGED IN ACCORDANCE WITH THE PROVISIONS
OF REG. 205-3 OF THE INVESTMENT ADVISERS ACT OF 1940 AND/OR APPLICABLE STATE
REGULATIONS. THE FEES WILL NOT BE OFFERED TO ANY CLIENT RESIDING IN A STATE IN WHICH
SUCH FEES ARE PROHIBITED.
Our calculated monthly and billed quarterly, in arrears, at the end of each quarter based upon
the value (market value or fair market value in the absence of market value), of the client's
account at the end of the previous billing period. Fees will be debited from the account in
accordance with the client authorization in the Investment Advisory Agreement.
Investment Management Services
Our annual fee for Investment Supervisory Services will not exceed 10% of net return over 3
month LIBOR. We negotiate fees with our clients individually. Fees paid by clients vary based on
the type of advice provided and other factors, such as the size of the account (including the
aggregate size of multiple accounts for the same client or related clients), the investment
strategy, the relationship with the client and the required level of service. Since fees are
negotiable, clients with similar investment objectives or strategies at times can pay different fees.
The agreed-upon fee will be specified in the Investment Advisory Agreement.
Our fees are billed monthly, in arrears, at the end of each month based upon the value (market
value or fair market value in the absence of market value), of the client's account at the end of
the previous billing period. Fees will be debited from the account in accordance with the client
authorization in the Client Services Agreement.
GENERAL INFORMATION
Limited Negotiability of Advisory Fees: Although we have established the aforementioned fee
schedule, 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.
Termination of the Advisory Relationship: A client agreement can be canceled for any reason
upon receipt of written notice, and the account will terminate at month end of the month the
cancellation request is received from the client.
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