Item 5 Fees and Compensation
A. The client can determine to engage Karpas Strategies to provide discretionary investment
advisory services on a fee only basis.
INVESTMENT ADVISORY SERVICES
If a client determines to engage Karpas Strategies to provide discretionary investment advisory
services on a fee only basis, Karpas Strategies’ annual investment advisory fee shall be based
upon a percentage (%) of the market value and type of assets placed under Karpas Strategies’
management (from negotiable to 1.00%) as follows:
Market Value of Portfolio % of Assets
First $5 million 1.00%
Next $10 million 0.75%
Over $15 million 0.50% for additional funds
B. Clients may elect to have Karpas Strategies’ advisory fees deducted from their custodial account,
or be billed for same. Both Karpas Strategies’ Investment Advisory Agreement and the
custodial/clearing agreement may authorize the custodian to debit the account for the amount of
Karpas Strategies’ investment advisory fee and to directly remit that management fee to Karpas
Strategies in compliance with regulatory procedures. In the limited event that Karpas Strategies
bills the client directly, payment is due upon receipt of Karpas Strategies’ invoice. Karpas
Strategies may deduct fees and/or bill clients quarterly in advance or arrears, as appropriate, based
upon the market value of the assets at the beginning or on the last business day of the previous
quarter as appropriate.
C. As discussed above at Item 4 and below at Item 12, unless the client directs otherwise or an
individual client’s circumstances require, Karpas Strategies shall generally recommend that
Charles Schwab and Co., Inc. (“Schwab”) serve as the broker-dealer/custodian for client
investment management assets. Broker-dealers such as Schwab charge brokerage commissions
and/or transaction fees for effecting certain securities transactions (i.e., including transaction fees
for certain mutual funds, and mark-ups and mark-downs charged for fixed income transactions,
etc.). In addition to Karpas Strategies’ investment management fee, brokerage commissions and/or
transaction fees, clients will also incur, relative to all mutual fund and exchange traded fund
purchases, charges imposed at the fund level (i.e., management fees and other fund expenses).
D. Karpas Strategies’ annual investment advisory fee shall be prorated and paid quarterly, in
advance or in arrears as agreed by Karpas Strategies and the client, based upon the market value
of the assets either at the beginning or on the last business day of the previous quarter as
appropriate. Karpas Strategies generally requires a minimum account value of $1,000,000 for
investment advisory services. Karpas Strategies, in its sole discretion, may charge a lesser
investment management fee and/or reduce or waive its minimum asset requirement based upon
certain criteria (i.e., anticipated future earning capacity, anticipated future additional assets,
dollar amount of assets to be managed, related accounts, account composition, negotiations with
client, etc.).
Karpas Strategies, LLC 9
If an account is established on any day other than the first day of a calendar quarter, the initial
quarterly fee will be based upon the value of the account at the date of opening, adjusted pro rata
based upon a 90-day quarter. If assets are added to an account during a calendar quarter, no
advisory fee is payable with respect to the added assets until the start of the next quarter. If assets
are withdrawn from an account during a calendar quarter, no refund is made with respect to any
advisory fees paid in advance for that quarter.
The Investment Advisory Agreement between Karpas Strategies and the client will continue in
effect until terminated by either party by written notice in accordance with the terms of the
Investment Advisory Agreement. In the event that the agreement is terminated for any reason
prior to the end of any quarter, the client will be charged/reimbursed for fees earned/paid through
the date of termination, on a pro rata basis. No termination of the agreement shall affect or
preclude the consummation of any securities transaction initiated by Karpas Strategies prior to
the termination of the agreement.
E. Neither Karpas Strategies, nor its representatives accept compensation from the sale of securities
or other investment products.
F. Fee Dispersion
Karpas Strategies, in its discretion, may charge a lesser investment advisory fee, charge a flat fee,
or waive its fee entirely, or charge a fee on a different interval, based upon certain criteria (i.e.,
anticipated future earning capacity, anticipated future additional assets, dollar amount of assets
to be managed, related accounts, account composition, complexity of the engagement, anticipated
services to be rendered, grandfathered fee schedules, employees and family members, courtesy
accounts, competition, negotiations with client, etc.). Please Note: As a result of the above,
similarly situated clients could pay different fees. In addition, similar advisory services may be
available from other investment advisers for similar or lower fees. ANY QUESTIONS: Karpas
Strategies’ Chief Compliance Officer, Matthew Karpas, remains available to address any
questions that a client or prospective client may have regarding advisory fees.
G. Margin Accounts Risks
Karpas Strategies does not recommend the use of margin for investment purposes. A margin
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