Item 5: Fees and Compensation
Asset Management
All asset management clients are required to enter into an Investment Management Agreement that
describes the type of management services to be provided and fees, among other items. Newport Capital
Group’s tiered annual investment advisory fee is based upon a percentage (%) of the market value placed
under Newport Capital Group’s management. The schedule for new clients is the greater of $25,000 per
annum, or:
Market Value of Portfolio % of Assets
First $2,000,000 1.5%
Next $3,000,000 1.0%
Next $15,000,000 0.5%
Amounts over $20,000,000 0.4%
Clients with smaller account balances who are charged the minimum annual fee pay a fee that is
significantly higher and that exceeds 1.5%. Clients may receive similar services elsewhere at a higher or
lower rate than that charged by Newport Capital Group. Newport Capital Group may negotiate fees at its
discretion. This can result in similarly situated clients being subject to different advisory fee rates. For
purposes of determining the applicable fee rate and fee breakpoints, the accounts of immediate family
members are typically combined and treated as a single household, with all accounts in the household
charged the same fee rate based on the combined assets.
Clients may elect to have Newport Capital Group’s advisory fees deducted from their custodial account
or to be billed directly. Both Newport Capital Group’s Investment Management Agreement and the
custodial/clearing agreement authorize the custodian to debit the account for Newport Capital Group’s
investment advisory fee and directly remit that advisory fee to Newport Capital Group. In the limited
circumstances in which Newport Capital Group bills the client directly, payment is due upon receipt of
Newport Capital Group’s invoice. Newport Capital Group deducts fees and/or bills clients quarterly in
advance, based upon the market value of the assets (including cash and cash equivalents) on the last business
day of the previous quarter.
Pension Consulting
A negotiated payment schedule is developed for each pension consulting engagement. Pension consulting
fees are on a fixed fee basis ranging from $1,000 to $250,000 or based on a percentage of the assets in the
plan, which generally ranges from 0.10% to 1.00% of the plan’s assets. The fee is dependent upon the precise
nature of the services to be provided, including the scope of the work, the size of the plan (i.e., number of
participants and amount of assets) and the expertise required. Newport Capital bills clients quarterly, in
advance or in arrears, and clients are billed directly.
Financial Planning and Consulting
Newport Capital Group’s financial planning and consulting fees are negotiable and generally range from
$1,000 to $25,000 on a fixed fee basis, and from $200 (minimum) to $2,000 per hour, on an hourly rate
basis, depending upon the level and scope of the services required and the professionals rendering the
services.
Hourly fees are charged as work is performed and are due upon receipt of the invoice. For fixed fee
engagements, ½ of the agreed upon fee is due at the time the agreement is signed and the other ½ is
due upon delivery of the written plan. If the plan is not delivered within six (6) months of the date the
agreement was signed, the client will receive a refund of the partial payment, and the entire payment is
due upon delivery of the completed plan. Clients are billed directly.
Termination
All Investment Management Agreements, whether for asset management, pension consulting, or financial
planning and consulting, may be terminated by written notice by the client, and any unearned fees are
returned to the client. However, clients are advised that a large portion of work related to a pension
consulting or financial planning and consulting engagement is done in the early stages and, accordingly,
the return of unearned fees may not correlate directly to the amount of time during which the engagement
was active. Because asset management services are charged on a per-day basis, fees are pro-rated according
to the number of days in the billing period the client was a client, and unearned fees remitted to the client.
Newport Capital Group will cease to perform services, including processing trades and distributions, upon
termination.
Newport Holdings
Newport Holdings does not pay advisory fees to Newport Capital Group. Rather, clients’ investments in
the Fund are included in the market value of the clients’ account when calculating the advisory fee. In
addition, clients invested in Newport Holdings are charged a performance-based fee (see Item 6 of this
Brochure), which is payable to the General Partner. Further, investors bear their proportionate share of
expenses borne by Newport Holdings, which may include offering costs, sales charges, organizational costs,
transaction costs, due diligence expenses and other fees more specifically described in the Newport
Holdings offering documents. Such performance fees and expenses are in addition to the advisory fees paid
by clients to Newport Capital Group. Any investor in Newport Holdings was provided with the Fund’s
offering documents to carefully review before investing.
Other Fees
Clients incur other fees associated with holding and investing in securities. For example, clients are
responsible for brokerage and other transaction costs associated with the purchase or sale of a security. In
addition, the managers of mutual funds, exchange-trade funds (“ETF”) and private funds charge fees and
expenses that are deducted from the value of the shares and are in addition to the advisory fee paid to
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