Item 5 – Fees and Compensation
A. Standard Fee Arrangement and Schedules
JB Investment Management provides investment supervisory services to
various categories of institutional clients and individuals. Our services are
implemented on a discretionary basis, managed by us, through separate
investments in investment grade fixed income securities and index-based equities.
Account supervision is guided by the stated objectives of the client (i.e., income,
maximum capital appreciation, growth, etc.), and all managed accounts are
maintained with an independent custodian.
For investment supervisory services, compensation is derived as fee income based
upon the percentage of assets under management. The compensation method is
explained to and agreed upon by clients in advance before any services are
rendered. Asset based management fees will be charged quarterly, in arrears, based
on the total market value of the client’s assets at the end of each calendar quarter.
The compensation for our services, which include developing and implementing an
investment policy and objectives, formulating a quantitatively driven asset
allocation analysis, recommendations, and monitoring a client’s investment results,
is as follows:
ANNUAL FEE SCHEDULES
Institutional Core Fixed Income:
First $25 million .35%
Next $25 million .25%
Over $50 million .15%
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Tax-Advantaged Fixed Income:
First $25 million .30%
Next $25 million .20%
Over $50 million .10%
TIPS Indexed Fixed Income:
First $25 million .18%
Next $25 million .12%
Over $50 million .08%
Liability- Driven Fixed Income:
First $25 million .20%
Next $25 million .15%
Over $50 million .10%
Passive Index-Based Equity Management:
First $5 million .50%
Next $25 million .35%
Over $30 million .20%
At its discretion, JB Investment Management reserves the right to negotiate the fee
schedule for accounts depending on the size, type of account and the services
required. In some cases, negotiation of fees may result in different fees being
charged for similar services and may be less than the stated fee schedule.
B. Fee Payment Options
Investment advisory services begin with the effective date of the investment
advisory agreement (the “Agreement”), which is the date the client signs the
agreement. For that calendar quarter, fees will be adjusted pro rata based upon the
number of calendar days in the calendar quarter that the Agreement was effective.
Fees will generally be deducted directly from the client’s brokerage account
pursuant to a written agreement. Alternatively, at the client’s request, we will
invoice the client directly for payment of fees. We reserve the right to adjust the fee
schedule for accounts depending on the size and type of account and the services
required. In some cases, negotiation of fees may result in different fees being
charged for similar services and may be less than the stated fee schedule. We will
not be compensated on the basis of a share of capital gains upon or capital
appreciation of the funds or any portion of the funds of the client.
Clients should be aware of their responsibility to verify the accuracy of the fee
calculation submitted to the custodian by us, as the custodian will not determine
whether the fee has been properly calculated. Such fee calculation will be included
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in the account statements prepared by the custodian and sent to clients. Clients are
also urged to compare the account statements received from their custodian with
the portfolio appraisals prepared by us. Either the client or we may terminate the
Agreement at any time. Notice of termination must be given to the other party in
writing. The client is responsible to pay for services rendered until the termination
of the agreement. The client can cancel the Agreement without penalty within
the first five days after the signing of the Agreement.
C. Additional Fees or Expenses
We receive only our quarterly investment management fee as described in Item 5.A.
above for our advisory services. Additionally, the fees charged by us are exclusive of
all custodial and transaction costs paid to custodians, brokers or any other third
parties. Clients should review all fees charged by JB Investment Management,
custodians and brokers and others to fully understand the total amount of fees
incurred. Other fees a client may incur in connection with an account include
custodian fees, brokerage and other transactions costs if applicable. Please refer to