Item 5 - Fees and Compensation
Account Management Fees: Marble Harbor’s compensation for its investment advisory services is
primarily based on an annual percentage of the fair market value of each client account’s assets under
management (a “management fee”). Typically, such management fees are payable quarterly in arrears,
and calculated based on the fair market value of the managed assets as of the last business day of the
preceding calendar quarter. For new clients, the initial quarterly fee is pro-rated based on the date Marble
Harbor began managing the account.
We do not ask or require our clients to pay fees in advance.
Unless otherwise specified in the client Advisory Agreement, Marble Harbor’s fees for investment
advisory services are based on the following standard annual fee schedule:
Assets Under Management Annual Fee Rate
$0 - $5,000,000 1.00 %
$5,000,001 - $15,000,000 0.75%
$15,000,001 - $25,000,000 0.60%
$25,000,001 - $50,000,000 0.50%
Over $50,000,000 0.40%
On a case-by-case basis, Marble Harbor determines an appropriate fee structure based on the size,
complexity, and investment objectives of the client’s account. We may also charge a “flat” dollar fee.
The terms and conditions of the fee structure are mutually agreed upon prior to entering into an Advisory
Agreement. However, clients that invest in one or more of the Private Funds pay a performance-based
fee (“an incentive fee”) on the assets invested in the Private Fund.
Although we do not impose a minimum dollar value of assets under management for investment advisory
accounts, we generally charge an annual minimum investment management fee of $10,000 for each
account (or group of related accounts).
Payment of Management Fees: Marble Harbor charges its management fees in accordance with each
client’s Advisory Agreement. A client may elect to be billed directly via written invoice, or may
authorize Marble Harbor to directly debit fees from the client’s qualified custodial account.
If a client authorizes Marble Harbor to directly debit management fees from that client’s custodial
account, it is the client’s responsibility, not the qualified custodian, to verify that our fees were calculated
correctly. Fee deductions will be reflected in the account statement sent by the qualified custodian directly
to the client.
Marble Harbor relies on the custodians that hold client securities and/or a reliable third-party quotation
service when determining the value of account assets. If the custodians and the pricing services can’t
provide a price, we will obtain a price on a best-efforts basis.
Limited Negotiability of Management Fees: Although Marble Harbor has established the above fee
schedule and minimum annual fees, it retains the discretion to negotiate alternative fees on a client-by-
client basis. Client facts, circumstances and needs will be considered in determining the fee schedule.
These include the complexity of the client’s account, assets to be placed under management, anticipated
future additional assets, related accounts, portfolio style, account composition, reports, and among other
factors. The specific annual fee schedule will be identified in each client’s Advisory Agreement.
We may group certain related client accounts for the purposes of achieving the minimum account size
requirements and determining the annualized fee.
Discounts are not generally available to our advisory clients but may be offered to family members and
friends of associated persons of Marble Harbor.
Limited Prepayment of Management Fees: Marble Harbor does not require or solicit prepayment of
more than $1,200 in fees per client in advance of services rendered.
Termination of the Advisory Relationship: Either a client or Marble Harbor may terminate an
Advisory Agreement at any time for any reason upon receipt of sixty (60) days written notice or in
accordance with other mutually agreed upon written terms. If Marble Harbor’s services are terminated on
a day other than the last day of the calendar quarter, the client will be charged a pro-rated fee to cover the
period from the beginning of the calendar quarter through the date of termination.
Compensation is generally not payable in advance. However, if a client terminates its relationship with
Marble Harbor, any prepaid, unearned compensation will be pro-rated to the date of the termination and
promptly reimbursed. Marble Harbor does not impose any termination fees.
Additional Fees and Expenses
Mutual Fund Fees: As part of its investment advisory services to clients, Marble Harbor may invest or
recommend that their clients invest in mutual funds and/or exchange-traded funds. Clients are advised
that all fees paid to Marble Harbor for investment advisory services are separate and distinct from the fees
and expenses charged by mutual funds, exchange-traded funds, money market funds, or closed-end funds
(“Other Funds”) to their respective shareholders; such fees and expenses are described in each Other
Fund’s prospectus. These fees will generally include a management fee, other fund expenses, and a
possible distribution fee. If an Other Fund also imposes sales charges, a client may be required to pay an
initial or deferred sales charge. Marble Harbor does not share in any portion of these fees or charges.
A client can invest in an Other Fund directly without Marble Harbor’s services. In such case, Marble
Harbor would not assist the client in determining the most appropriate investment. Accordingly, the
client should review both the fees charged by an Other Fund and Marble Harbor’s fees to fully understand
the total amount of fees to be paid by the client.
Brokerage and Custodial Fees: Marble Harbor’s management fees do not include brokerage
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