Item 5: Fees and Compensation
Compensation
Ledgewood bases its fees on a percentage of assets under management, hourly charges,
and fixed fees. Ledgewood’s fee schedules are described below.
Compensation – Investment Advisory Services
For Investment Advisory Services, Ledgewood’s fees vary with the size of the client’s
Account. Generally, this fee is equal to a percentage of the assets under management
calculated using the following tiered schedule. Fees are billed quarterly in advance
based on the value of assets under management on the last business day of the
previous quarter.
On an Annual Basis
(Minimum Account Size $500,000)
First $500,000 1.50%
Next $500,000 0.70%
Next $2 Million 0.60%
6 Ledgewood Wealth Advisors, LLC
Next $2 Million 0.50%
Balance 0.40%
If client uses Pershing Advisor Solutions, LLC (Pershing), transaction and other
miscellaneous service fees are charge directly to the client by Pershing.
Compensation – Financial Planning
For providing financial planning services on a standalone basis, Ledgewood charges
either and hourly or fixed fee. Hourly fees range from $100 to $250 per hour. Fixed
fees range from $3,000 to $15,000. Fee charged will be determined based upon the
complexity of the client’s financial situation, and time estimated to be spent on the in-
depth analysis and plan. Fees are billed to client upon completion of work.
Calculation and Payment
The specific manner in which fees are charged by Ledgewood is established in a
client’s written agreement with Ledgewood. Ledgewood will generally calculate fees in
advance based on the value of assets under management on the last business day of
the previous quarter. Fees are negotiable under certain circumstances. Clients may
elect to be invoiced directly for fees or to authorize Ledgewood to directly debit fees
from client accounts.
Accounts initiated or terminated during a calendar quarter will be charged a prorated
fee. Upon termination of any account, any prepaid, unearned fees will be promptly
refunded, and any earned, unpaid fees will be due and payable.
Agreement Terms
A client may terminate the client agreement at any time by notifying Ledgewood in
writing and paying the rate for the time spent on the investment advisory engagement
prior to notification of termination. If the client made an advance payment, Ledgewood
will refund any unearned portion of the advance payment.
The client or Ledgewood may terminate the investment advisory agreement without
payment of any penalty, by either party giving the other thirty (30) days’ prior written
notice.
Upon notice of termination, Ledgewood will await further instruction from the client as to
what steps the client requests to liquidate and/or transfer the portfolio and remit the
proceeds. Ledgewood, upon instructions from the client, will instruct brokers, dealers,
mutual fund sponsors, and others to liquidate and/or transfer the portfolio and remit the
proceeds to the client. If an investment advisory agreement is terminated, a final fee will
be charged which will be prorated according to the number of days for which
Ledgewood provided its management services during the relevant quarter.
Other Compensation
7 Ledgewood Wealth Advisors, LLC
Neither Ledgewood nor any of its supervised persons (employees) accept
compensation for the sale of securities or other investment products.
General Information on Compensation and Other Fees
In certain circumstances, fees, account minimums and payment terms are negotiable
depending on client’s unique situation – such as the size of the aggregate related party
portfolio size, family holdings, low cost basis securities, or certain passively advised
investments and pre-existing relationships with clients. Certain clients may pay more or
less than others depending on the amount of assets, type of portfolio, or the time
involved, the degree of responsibility assumed, complexity of the engagement, special
skills needed to solve problems, the application of experience and knowledge of the
client’s situation. Lower fees for comparable services may be available from other
sources.
Ledgewood’s fees are exclusive of brokerage commissions, transaction fees, and other
related costs and expenses which shall be incurred by the client. Clients may 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 transfer and electronic fund fees, and other fees and
taxes on brokerage accounts and securities transactions. Mutual funds and exchange
traded funds also charge internal management fees, which are disclosed in a fund’s
prospectus.
Such charges, fees and commissions are exclusive of and in addition to Ledgewood’s
fee, and Ledgewood shall not receive any portion of these commissions, fees, and
costs.
All fees paid to Ledgewood for investment advisory services are separate and distinct
from the fees and expenses charged by mutual funds and variable annuity sub-
accounts to their shareholders. These fees and expenses are described in each fund’s
or sub account’s prospectus. These fees will generally include a management fee,
other expenses, and a possible distribution fee. If the fund also imposes sales charges,
a client may pay an initial or deferred sales charge.
A client could invest in a mutual fund or sub-account directly, without the services of
Ledgewood. In that case, the client would not receive the services provided by
Ledgewood which are designed, among other things, to assist the client in determining
which mutual funds or sub-accounts are most appropriate to each client’s financial
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