Item 5 - Fees and Compensation
McCutchen Group offers its services on a fee basis, which include fixed fees and/or fees based upon assets
under advisement.
Fixed Fees
McCutchen Group may charge a fixed fee and/or hourly fee for services. These fees are negotiable, but
generally range up to $500,000 or more on a fixed fee basis, depending upon the level and scope of the
services and the professionals providing the financial planning and/or the consulting services.
Upon engaging McCutchen Group to provide services, the client generally enters into a written Agreement
with McCutchen Group setting forth the terms and conditions of the engagement. McCutchen Group’s
fixed fees are generally charged quarterly in advance. Either party may terminate the Agreement by
written notice to the other. If the Agreement is terminated during a quarter, the fee will be prorated based
on the number of days from the beginning of the quarter to the agreed upon termination date and any
excess fees paid in advance will be promptly refunded to the client. In the unusual case where a client
engages McCutchen Group to perform a one-time project, McCutchen Group may require one-half of the
fixed fee payable upon entering the written Agreement. The balance is generally due upon delivery of the
plan or completion of the agreed upon services.
Assets Under Advisement Based Fees
McCutchen Group typically charges a fee based on the assets under advisement for services. The fee is
based upon a percentage of the market value of the assets being advised by McCutchen Group (including
any assets placed with Independent Managers), as agreed with the client. McCutchen Group’s fee is
exclusive of, and in addition to, fees charged by Independent Managers, brokerage commissions,
transaction fees, and other related costs and expenses which are incurred by the client. McCutchen Group
does not receive any portion of these third-party commissions, fees, and costs.
Asset-based advisory fees are prorated and charged quarterly in arrears, based upon the market value of
the assets, agreed upon with the client, as reported on the last day of the previous quarter on the
McCutchen Group quarterly performance report. The annual asset-based fee generally varies between
0.10% and 1.00%, depending upon a number of factors, including the market value of the assets under
management and the type of investment advisory and financial services to be rendered. McCutchen Group
does not currently charge any performance-based advisement fees.
McCutchen Group Private Fund Fees
Investors in the Private Funds pay their standard fee (as described above) to McCutchen Group for their
investments in the Private Funds. The Private Funds do not charge a separate fund management fee or
performance-based fee to investors. However, the Private Funds do pay their own expenses (including,
but not limited to, legal, accounting, fund administration, postage, travel related expenses to meet with the
underlying managers, etc.), as well as any management and performance fees, and expenses charged by
underlying managers in which each Private Fund invests. Expenses shared by more than one Private Fund
are allocated equitably between the impacted funds, usually evenly, according to the expense. Additional
information about the expenses paid by the Private Funds are set forth in the Offering Documents.
Fees Charged by Financial Institutions and Independent Managers
As further discussed in response to Item 12 (below), McCutchen Group generally recommends that clients
utilize the brokerage and clearing services of Charles Schwab & Co., Inc. (“Schwab”) for investment
management accounts.
McCutchen Group may only implement its investment advisory recommendations after the client has
arranged for and furnished McCutchen Group with all information and authorization regarding accounts
with appropriate financial institutions. Financial institutions include, but are not limited to, Schwab, any
other broker-dealer recommended by McCutchen Group, broker-dealers directed by the client, trust
companies, banks etc. (collectively referred to herein as the “Financial Institutions”).
Clients incur certain charges imposed by the Financial Institutions and other third parties such as fees
charged by Independent Managers, custodial fees, charges imposed directly by a mutual fund or ETF in
the account, which are disclosed in the fund’s prospectus (e.g., fund management fees and other fund
expenses), 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. Such charges, fees and
commissions are exclusive of and in addition to McCutchen Group’s fee, and McCutchen Group does not
receive any portion of such expenses that are incurred.
To the extent McCutchen Group recommends that clients invest in private funds managed by Independent
Managers, such clients will pay advisory and performance-based fees to each Independent Manager in
addition to the assets under advisement fee paid to McCutchen Group. Typically, the fees paid to
Independent Managers for investments in private funds are based on the value of the private fund as of
the end of the prior quarter. Additionally, these private funds will typically bear certain expenses of such
funds. Additional information about the fees and expenses of such private funds managed by Independent
Managers is available in the private placement memorandum or other offering documents for such fund.
McCutchen Group’s Agreement and the separate agreement with any Financial Institutions may authorize
McCutchen Group to debit the client’s account for the amount of McCutchen Group’s fee and to directly
remit that fee to McCutchen Group. Likewise, the agreement between the client and any Independent
Manager may authorize the Independent Manager to debit the client’s account for the amount of the
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