Item 5 Fees and Compensation Investment Supervisory Services.
We base our fees on a percentage of assets under management, based on the following schedule of
fees:
Asset Value Fee Range as Against Asset Value
0 to $1,000,0001 1.35% to 0.81%
$1,000,001 to $3,000,000 1.10% to 0.66%
$3,000,001 to $5,000,000 0.80% to 0.48%
$5,000,001 and above 0.60% to 0.25%
Your exact fee schedule is set forth in our agreement with you. In determining fees, we consider the
complexity of advisory services to be rendered, assets being managed, frequency and scope of
investment reviews, the complexity of your financial situation, and our relationship with you, among
other considerations.
Fees are calculated on a flat basis and are due and payable in arrears as of each calendar quarter- end
based on the fair market value as of the valuation dates determined by the custodians for the account.
We apply our fee against all assets in your portfolio, including cash balances invested in money
market funds and short-term investment funds. Fees may be negotiable in limited circumstances
based on the size of the account, investment strategies for the account and other considerations, in
our sole and absolute discretion.
We include direct investments in the assets against which we calculate fees based on our agreement
with you. The value of the direct investments is based on values reflected in account statements issued
by the custodians and as agreed upon you. At times, as we consider it prudent and as agreed with you
we will typically assess fees against direct investments at the cost of the original investment, i.e., the
amount originally invested.
We deduct our fees directly from your account held at the custodian based on our investment advisory
agreement that authorizes us to do so and further according to defined procedures unless we agree to
other arrangements for the payment of our fees. Fees are pro-rated for any period less than a full
quarter based on the number of days your assets are under our management. Our agreement with you
may be terminated upon 30 days’ prior written notice by either of us.
Selection and Monitoring.
Our fees for selection and monitoring are negotiated with you depending on the level and nature of
services you require. We consider the complexity of the structure of the entity investing, the level of
assets subject to our selection and monitoring services, and the number of plan participants or
individual accounts. The fee is set forth in our selection and monitoring services agreement.
Financial Planning.
Planning fees may be on a fixed fee basis or an hourly basis. Fixed fees typically range from $750 to
$10,000, depending on the nature and complexity of each client’s circumstances. The fixed fee
may be based on estimated hourly fees and other factors related to the difficulty of services to be
rendered. We complete all financial planning engagements within six months of signing the financial
planning agreement.
Hourly fees are $200 per hour, depending on the nature and complexity of each client’ s
circumstances. An estimate for total hours is determined upon execution of the financial. If the final
fee is to be 20% or more higher than the estimate, we notify you before presentation of the plan.
Payment of the financial planning fee is due one-half upon execution of the financial planning
agreement and one-half upon delivery of the financial plan. If ongoing and substantial services
are required, the fee may be paid in other installments. Fee arrangements are set forth in and agreed
upon in the financial planning agreement.
Seminars and Educational Events.
Persons participating in our seminars are charged between $0 and $100 for the seminar, as set forth
in our agreement to present any such program. Fees are due and payable no later than the completion
of the program.
Additional Fees, Charges and Expenses
In addition to our fees, you pay fees and charges associated with the maintenance of your account by
the custodians, broker-dealers executing transactions, and any other financial institutions, including
without limitation, custodial fees, brokerage commissions, mark-ups and mark-downs on securities
transactions, transaction fees, exchange fees, transfer fees, and other account costs and charges
incurred. Please refer to Item 12 – Brokerage Practices below, for a further discussion of our
brokerage practices. Further reference is also made to the agreements and arrangements entered into
by you with the custodians, broker-dealers and other financial institutions, and associated disclosures
delivered by these entities.
When your assets are placed in mutual funds, ETF’s, and money market funds, the funds pay
management fees to the investment advisors managing the assets of the funds and other fees, expenses
and charges. The management fees and other fees, expenses and charges are paid by the funds to their
service providers and are separate and distinct from the fees paid to us and not received by us. Further
reference is made to the prospectuses delivered upon acquisition of mutual funds, ETF’s and money
market funds for a description of these fees, expenses and charges.
Compensation from the Sale of Products
When advising clients, we may recommend the use of insurance products. Certain of our investment
advisor representatives may recommend and place insurance products with clients and receive a
commission upon the sale of these products.
When we receive a commission from the sale of an insurance product we recommend to you, it
presents a conflict of interest because it may give us an incentive to recommend insurance products
based on the compensation received rather than on your needs. To avoid and to minimize any
potential conflict of interest, we recommend insurance products based on your individual investment
...