Item 5 – Fees and Compensation
Our fees are subject to negotiation and all fee arrangements will comply with Section 205 of the
Advisers Act.
The specific manner in which our fees are charged is established in the Agreement. We will
generally bill our fees in advance on a quarterly basis based upon the value of assets under
management and/or advisement on the last day of the previous quarter, as valued by Custodian or
another independent third-party or as set forth on the most recent statement made available to us.
The Agreement and/or the separate agreement with any financial institution(s) authorizes us to
invoice the custodian for the advisory fee. The Agreement further authorizes the custodian to
deduct the amount stated in the fee statement from one or more of the client’s accounts in
accordance with applicable custody rules. The financial institution(s) recommended by us have
agreed to send a statement to the client, at least quarterly, indicating all amounts disbursed from
the account including the amount of management fees paid directly to us.
A client may make additions to and withdrawals from the account at any time, subject to our right
to terminate an account. If assets are deposited into an account after the inception of a quarter that
exceed $100,000, the fee payable with respect to such assets will be prorated based on the number
of days remaining in the quarter. A client may withdraw account assets, subject to the usual and
customary securities settlement procedures. For partial withdrawals in excess of $100,000 within
a billing period, we shall credit our unearned fee towards the next quarter’s fee. Clients should
note that we design our portfolios as long-term investments and asset withdrawals may impair the
achievement of a client’s investment objectives.
For the initial quarter of investment management services, the first quarter’s fees shall be
calculated on a pro rata basis. The Agreement between us and a client will continue in effect until
terminated by either party pursuant to the terms of the Agreement. Our annual fee shall be prorated
through the date of termination and any remaining balance shall be charged or refunded to the
client, as appropriate, in a timely manner.
Additions may be in cash or securities provided that we reserve the right to liquidate any
transferred securities, or decline to accept particular securities into a client’s account. We may
consult with our clients about the options and ramifications of transferring securities. However,
clients are advised that when transferred securities are liquidated, they are subject to transaction
fees, fees assessed at the mutual fund level (i.e. contingent deferred sales charge) and/or tax
ramifications.
Our fees are exclusive of brokerage commissions, transaction fees, and other related costs and
expenses which shall be incurred by a client. Clients incur certain charges imposed by custodians,
brokers, third party investment managers 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, exchange traded funds (“ETFs”) and private funds also charge internal management
fees, which are disclosed in a fund’s prospectus or offering documents. Such charges, fees and
commissions are exclusive of and in addition to our fee. Advisory clients should note that they
have the option to purchase investment products recommended by us through other brokers or
agents that are not affiliated with us. Should an advisory client choose to open or maintain a non-
discretionary brokerage account to purchase investment products (i.e. 529s and variable annuities)
through Montage Securities, both Montage Securities and certain advisors who are registered
representatives of Montage Securities will receive certain commissions, fees and costs outlined
above in lieu of being charged an investment advisory fee on the brokerage product.
The recommendation to purchase commission products from Montage Securities presents a
conflict of interest, as the receipt of commissions provides an incentive to recommend investment
products based on commissions to be received. No client is under any obligation to purchase any
commission products from Montage Securities. In addition, clients have the option to purchase
investment products recommended by MWA through other non-affiliated broker-dealers.
Item 12 further describes the factors that we consider in selecting or recommending broker-dealers
for client transactions and determining the reasonableness of their compensation (e.g.,
commissions) and compensation received by MWA.
Due to common ownership through Mariner Holdings, a conflict of interest exists to the extent that
we recommend that clients utilize the separately managed account services of and invest in
products, including publicly traded funds and private funds, managed by affiliates. These managers
and products charge fees in addition to the fees charged by MWA. MWA has an indirect financial
incentive to recommend products managed and services provided by affiliates as revenues earned
by the affiliated adviser from such products and services ultimately flow to MWA’s parent
company.
Retirement Assets in Proprietary Mutual Funds and ETFs
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) and the applicable “ERISA-mirror provisions” of Section 4975 of the Internal Revenue
Code of 1986, as amended; “Fiduciary” shall be defined as that term is defined under ERISA; and
“Qualified Accounts” shall mean accounts that constitute a retirement plan (including a 401(k)
plan) or other employee benefit plan subject to ERISA, an account for a tax-qualified retirement
plan (including a Keogh plan), or an individual retirement account under the Internal Revenue
Code.
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