Item 5 Fees and Compensation
In addition to the information provided in Item 4 – Advisory Business, this section provides additional
details regarding our firm’s services along with descriptions of each service’s fees and compensation
arrangements. Although fees for our services may be negotiated under certain circumstances, our
standard fees are set forth below.
Financial Planning and Consulting Services Fees
We charge a fixed fee for financial planning services, which ranges between $500 - $25,000. The fee
is negotiable, at our sole discretion.
Fees are due upon completion of services rendered. We do not require prepayment of fees.
You may terminate the financial planning agreement by providing written notice to our firm. You will
incur a pro rata charge for services rendered prior to the termination of the agreement.
Wealth Management & Investment Advisory Services Fees
If engaged, we will either charge an annual fee based upon a percentage of the market value of the
assets being managed by us or a fixed periodic fee of $500-$100,000 per year, and the specific fee will
depend on the range of services provided to the particular client. Our annual fee shall be prorated and
charged quarterly, in arrears, based upon the market value of the assets on the last day of the
previous quarter. In the instance where clients have elected fixed periodic fees, they will be charged
quarterly in arrears. The annual fee based on percentage of assets shall vary (between 0.20% and
1.00% as stated in the advisory agreement) depending upon the market value of the assets under
management and the type of investment management services to be rendered. These fees are
negotiated with the client and may vary among clients depending on each client's specific
circumstances. At the Firm’s discretion, we may also waive the first quarter's fees for new clients.
While we do not have a minimum account size that we accept, we generally impose a minimum
annual fee of $500 as a condition for starting and maintaining an advisory relationship. In our sole
discretion, we may negotiate a lesser management fee 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, pre-existing client, account retention, pro bono activities, etc.).
At our discretion, we may combine the account values of family members living in the same household
to determine the applicable advisory fee. For example, we may combine account values for you and
your minor children, joint accounts with your spouse, and other types of related accounts. Combining
account values may increase the asset total, which may result in you paying a reduced advisory fee.
You may make additions to and withdrawals from the account at any time, subject to our right to
terminate an account. If assets are withdrawn or deposited into an account after the beginning of a
quarter that exceed $25,000 per day, the fee payable with respect to such assets will be prorated and
either added or deducted from the next quarterly bill. Clients may withdraw account assets upon notice
to us, subject to the usual and customary securities settlement procedures.
If the advisory agreement is executed at any time other than the first day of a calendar quarter, our
fees will apply on a pro rata basis, which means that the advisory fee is payable in proportion to the
number of days in the quarter for which you are a client.
We will deduct our fee directly from your account through the qualified custodian holding your funds
and securities. We will deduct our advisory fee only when you have given our firm written authorization
permitting the fees to be paid directly from your account. Further, the qualified custodian will deliver an
account statement to you at least quarterly. These account statements will show all disbursements
from your account. You should review all statements for accuracy.
You may terminate the advisory agreement upon written notice to our firm. You will incur a pro rata
charge for services rendered prior to the termination of the advisory agreement, which means you will
incur advisory fees only in proportion to the number of days in the quarter for which you are a client.
PORTFOLIO VALUE ANNUAL MAXIMUM FEE
Up to $5,000,000 1.00%
$5,000,000 - $10,000,000 0.90%
Over $10,000,000 0.80%
We do not reasonably expect to receive any other compensation, direct or indirect, for the services we
provide to the Plan or Participants. If we receive any other compensation for such services, we will (i)
offset the compensation against our stated fees, and (ii) we will promptly disclose the amount of such
compensation, the services rendered for such compensation and the payer of such compensation to
you.
Private Investment Fund
Lehman does not charge management fees or performance fees to the Private Investment Fund.
However, Private Investment Fund investors bear their proportionate share of the General Partner
Administration fee charged to the Private Investment Fund.
Details about the Private Investment Fund’s specific fee structure can be found in the Private
Investment Fund’s offering documents.
Additional Fees and Expenses
As part of our investment advisory services to you, we may invest, or recommend that you invest, in
mutual funds, exchange traded funds, structured products, life insurance contracts, and private
placements. The fees that you pay to our firm for investment advisory services are separate and
distinct from the fees and expenses associated with reverse convertible notes and private placements,
and charged by mutual funds or exchange traded funds (described in each fund's prospectus) to their
shareholders. These fees will generally include a management fee and other fund expenses. You will
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