Item 5 - Fees and Compensation
Fees for Investment Management
Current Fee Schedule – Implemented in 2018
The Firm’s fee structure for investment management clients is based on client assets as follows,
unless the Firm, in its sole discretion, decides to charge less than these stated fees:
1% on the first $3,000,000 annually
3/4 of 1% on amounts between $3,000,001 and $6,000,000
1/2 of 1% on amounts over $6,000,000
For portfolios below $2,000,000, there will be a minimum advisory fee administered equivalent to one
tenth of one percent (.10) in addition to the fee schedule above.
Investment accounts managed through account aggregation software will be billed the above referenced
fee schedule, unless other fee arrangements are mutually agreed upon in the client’s Advisory
Agreement. The management fee for these accounts is dependent upon assets under management, the
number of investment options available in the outside account, the custodian, and other factors.
Fees are billed quarterly at one-quarter (1/4) of the above annual rate, payable at the beginning of each
quarter and based upon the value (market value or fair market value in the absence of market value) of
the client’s account at the end of the previous quarter.
The client’s Advisory Agreement may be cancelled in writing any time and a pro-rata refund will be
made of any unearned or unapplied fees. The Firm has a minimum portfolio size of $1,000,000, but
may make exceptions. For deposits and withdrawals of $50,000 or more received after quarter end,
debits or credits are applied in the subsequent billing period in accordance with the Firm's stated
advisory fee schedule. Advisory agreements contain a five (5) day penalty-free right of rescission.
For clients who are “young professionals”, fees are billed based on the fee schedule above with a
minimum quarterly fee of $1,250. This service includes cash flow analysis, investment analysis,
investment management, and 401(k) recommendations. If the client wishes to engage Altfest in
additional financial planning services beyond the agreed upon scope, they will be billed at the hourly
rate of $250.
We may include mutual funds, exchange traded funds, and private funds in our investment strategies.
These securities charge expense ratios/internal management fees and may charge commissions as well.
These charges are in addition to our fee, and we do not receive any portion of these fees.
The fee for pooled investment vehicles managed by Altfest is described in the Offering Documents.
When a client invests in a private fund where the Firm is the registered investment adviser to the fund,
we bill the client an advisory fee in addition to the investment management fee we receive from the
fund.
The method of compensation generally arises from continuing management of portfolios as opposed to
reviews or investment advice at a fixed point in time or other forms of investment and / or financial
advice that is rendered.
The Firm has utilized the following fee schedules for legacy clients:
For clients 2008 & earlier:
1% on the first $1,000,000 annually
3/4 of 1% on amounts between $1,000,000 and $2,000,000
1/2% of 1% on amounts over $2,000,000
For clients from 2009 to 2017:
1% on the first $2,000,000 annually
3/4 of 1% on amounts between $2,000,001 and $5,000,000
1/2 of 1% on amounts over $5,000,000
In certain circumstances, fees can be and have been negotiated.
For Select Investment Review Clients: The Firm’s fee charged is $600 per hour but may adjust up to
$900 per hour depending on various factors. If the client requests specific investment recommendations,
there is a minimum fee of $5,000. Typically, the client pays 50% of the projected fee before service
commences and 50% when the recommendations are presented. Services may be terminated at any
time and the client billed only for the hours worked to that point.
Fees for Management of Pooled Investment Vehicles
The Firm offers four pooled investment vehicles to its clients: the AAVF Funds; the Arden Woods Real
Estate Fund, the Arden Woods 2 Real Estate Fund, and the Adren Woods 3 Real Estate Fund
(collectively, the “Funds”). Clients may invest in either or all Funds, and investors who are not clients
of the Firm may invest in either or both Funds.
Clients who invest in the AAVF Funds pay a management fee of one percent (1%) of the assets in the
AAVF Funds, and a management fee equivalent to their effective billed rate as outlined in their advisory
agreement. Investors in the AAVF Funds who are not clients of the Firm pay a management fee of two
percent (2%) of the assets in the AAVF Funds.
Clients who invest in the Arden Woods Real Estate, Arden Woods 2 Real Estate, or and the Adren
Woods 3 Real Estate funds do not pay a management fee for the assets in the Fund, however, clients
pay a management fee equivalent to their effective billed rate for the total client assets managed by
Altfest, which includes the client’s assets in the Fund(s). Investors in the A Fund(s) who are not clients
of the Firm pay a management fee of two percent (2%) of the assets in this Fund.
Fees for Financial Planning
The Firm’s Financial Planning fees will be determined based on the nature of the services being
provided, the complexity of each client’s circumstances, the reports to be provided, and negotiations
with the client. All fees are agreed upon prior to entering into a Financial Planning Agreement with any
client.
Our Financial Planning fees are calculated and charged on a fixed fee basis and are dependent upon the
specific arrangement reached with the client.
We typically request a retainer of fifty percent (50%) upon completion of our initial fact-finding session
with a client. In most cases, we deliver the financial plan to the client within a few months, but in no
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