Item 5. Fees and Compensation
As an investment advisor, Mitchell, Vaught and Taylor, Inc. provides investment
supervisory services on a discretionary basis. Over the years, as the needs of our
clients have changed, we have provided additional services at no charge for active
clients (or those who routinely add to their accounts). These services include tax
documents and IRS responses, preparation of account information for annual
audits of municipal accounts, and review of other related accounts that our firm
does not manage.
Management fees are based upon the market value of the account on the last day
of the previous billing period. Our accounting system uses trade date values and
may differ from the client’s custody statement due to pending trades. Client
accounts with a market value in excess of $100,000 are billed and payable
quarterly in advance. Individual accounts with a market value of less than
$100,000 are billed at the beginning of the calendar year based on the market
value of the account on December 31st of the prior year. Fees are based upon asset
type and value of assets under management as shown below.
When a new client opens an account in the middle of a billing period, a fee will
not be charged for that period. Our current practice is to not bill for the first
billing period.
All new actively managed Individual Accounts (including, but not limited to,
retirement, brokerage or college savings) will be charged the following fee
schedule:*
1.0% on the first $500,000
0.5% thereafter.
For actively managed Individual Client Accounts opened before January 1, 2018,
the following fee schedule applies:
1.0% on the first $250,000
0.5% thereafter.
We offer Robo accounts to clients (see Item 13 - Review of Accounts). These
Robo accounts hold securities in one of several model portfolios, created by
Mitchell, Vaught and Taylor and selected by the client. Securities in a Robo
account are held by an independent custodian and the custodian will periodically
re-balance the securities in the account to the model portfolio. Robo accounts
opened after April 1, 2020 will be charged the same fee schedule as all other
assets. Robo accounts opened before April 1, 2020 are charged a fee of 1% for all
assets in the Robo account.
MVT staff members typically manage their own personal accounts and those are
not charged a management fee. We also do not charge management fees for
accounts for the spouse or dependent child of staff members, directors and
shareholders’ accounts, employee 401(k) accounts, trust accounts where a staff
member acts as trustee/fiduciary for a family member, nor education accounts for
children or grandchildren of staff members.
Actively managed Municipal Accounts (includes both fixed income and equity):*
0.5% on the first $2 million in assets under management
0.4% on the next $3 million
0.35% on the next $5 million
0.25% on the next $10 million
0.15% on all assets over $20 million
In the case of municipal accounts, when we manage both the firefighter and police
pension funds within the same city, we will combine the assets under
management and give both pension funds the lower fee.*
For Illinois pension funds requiring data downloads for the annual report to the
Department of Insurance, we may charge $750.00 for this service beginning in
2018. The data will include all transactions and holdings for the current fiscal
year, income, cost basis, bond coupon rates and other information requested for
the data schedules. While we cannot replicate the format for the Department of
Insurance schedules, our portfolio software can provide almost all of the required
information.*
*These fees are negotiable dependent upon special circumstances.
Non-discretionary municipal accounts (consulting on manager selection, asset
allocation, performance review, investment policy) will be assessed a fee based
on assets under management and that fee is negotiable.
Please note: Clients who invest in mutual funds or separately managed accounts
pay both a direct management fee to Mitchell, Vaught and Taylor, as specified
above, and an indirect management fee through the mutual fund or separate
account manager, whose fees are disclosed in each mutual fund prospectus or in
the separate account manager’s ADV.
Please note: The aggregation or blocking of client transactions allows Mitchell,
Vaught and Taylor, Inc. to execute transactions in a more timely, equitable, and
efficient manner and seeks to reduce overall transaction charges to clients. Our
firm’s policy is to aggregate client transactions where possible and when
advantageous to clients. In these instances clients participating in any aggregated
transactions will receive an average share price and transaction costs will be
shared equally and on a pro-rata basis.
For small businesses, the firm offers consulting and investment management
services in establishing 401(k) and other pension plans. Advisory fees consistent
with the above individual schedule plus flat set-up fees based on the size of the
employee base are charged on these accounts.
For individual investors, the firm also offers to provide full and limited service
asset management advisory services, including advice on matters not involving
securities. These financial planning or other services are offered on a fee-only
basis. Financial planning fees to individual clients are offered on both (1) an
hourly basis with hourly fees of up to $175 per hour based on the nature of the
service; and (2) for non-discretionary investment advice on an on-going basis
under the advisory fee schedule above.
The firm’s services include advice on non-securities matters. Generally, this is in
connection with providing financial planning services related to the tendering of
advice on estate planning, tax planning, and business continuation planning.
We provide municipal government consulting services regarding management,
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