ITEM 5 - FEES AND COMPENSATION
Fee Schedules
A. The standard tiered wealth management services fees are as follows (per annum):
1.25% on first $1 million
1.00% on next $2 million
0.80% on next $2 million
0.60% on next $5 million
0.50% on assets over $10 million
B. NAM reserves the right to negotiate wealth management fee arrangements with
prospective and existing clients.
C. Institutional/charitable clients. The standard tiered investment management fees
are as follows (per annum):
0.85% on first $5 million
0.60% on next $5 million
Firm Brochure – Part 2A of Form ADV Page 7 of 28
North American Management Form ADV
0.50% on next $10 million
0.25% on assets over $20 million
D. The institutional/charitable investment management fee schedule is subject to a
minimum annual fee of $25,500. NAM reserves the right to negotiate fee
arrangements with prospective and existing institutional/charitable clients and
can, at its discretion, make exceptions to its fee schedule, including minimum
annual fees.
E. Management fees are payable in advance on a calendar quarter basis and are
calculated based on the market value of account assets on the last day of the
previous quarter. For accounts that hold margin, fees will be assessed on the
investments but not on any margin cash held on the last day of the quarter. To
take advantage of fees at a lower fee tier, in certain situations, NAM allows clients
to group related accounts together. Typically, these accounts are grouped for a
spouse and/or dependent children at the same address; however, exceptions can
be made where clients are not living at the same address. Exclusion of designated
holdings in the calculation of management fees is acceptable if agreed to by both
NAM and the client. Management fees are deducted directly from a client’s
investment account(s) held at his/her custodian, with the exception of a few
existing clients who pay fees by check or other agreed method. Clients can direct
NAM to deduct management fees for multiple accounts from a single account.
F. Please note that some existing NAM clients have a different fee schedule. Some
NAM clients are part of a customized family grouping which can also result in
lower fees (“family group”). In addition, NAM employees, their families, and
current directors are offered a discounted fee schedule. There are situations in
which NAM also offers this schedule to former NAM employees, families, and
directors.
G. NAM provides trustee services primarily to select clients with whom there is also
an existing wealth management relationship (see Item 10 for additional
information). These fees are in addition to NAM’s customary tiered fee schedule
and, in certain cases, can be negotiated. The fee schedule for trustee services is
based on the type of trust and the services provided, as follows (per annum):
Insurance trust trustee $500 Flat Fee
Revocable trust trustee $500 Flat Fee or 0.15% Asset-based Fee
Irrevocable trust trustee 0.15% Asset-based Fee
Trust protector 0.10% Asset-based Fee
Agent for trustee 0.15% Asset-based Fee
Successor trustee No fee
H. Fees for trustee services are payable in advance on a calendar quarter basis. For
example, when NAM serves as an insurance trust trustee, clients are charged
$125 each quarter. For those services that do not charge a flat fee, as noted above,
fees are calculated based on the market value of the trust account(s) on the last
day of the previous quarter. Trustee fees are deducted directly by NAM from a
client’s trust account(s) unless otherwise agreed.
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North American Management Form ADV
I. All agreements can be terminated upon written notice by either party. For clients
who terminate their relationship with NAM, the unearned balance of the fee, if
any, is refunded based on the terms of the contract, or the earned, but unpaid
balance of the fee, if any, is payable based on the terms of the contract. Unless the
contract states otherwise, refunds are calculated as of the date of written
notification of termination by either party, or other date agreed upon in writing.
NAM does not provide refunds to clients who close an account(s) or sub-account(s)
with NAM, but remain advisory clients with the Firm with one or more open
accounts, absent an exception. Similarly, NAM does not offer refunds if a client is
part of a family group, where a client’s assets are being aggregated within a family
group in order to receive a lower management fee, and such client which is part of
the family group terminates its relationship with NAM.
Other Fees or Expenses
A. NAM invests in mutual funds, exchange traded funds and other outside
investment managers. These assets are included in determining the value of the
account when calculating NAM’s management fees. These same assets are also
subject to additional advisory and other fees and expenses charged by the funds,
as set forth in the prospectuses of those funds. Thus, clients pay fees to both NAM
and the fund/outside manager.
B. Regarding clients invested in hedge funds, in addition to the management fees
paid to NAM, they will pay management and performance based fees directly to
the hedge fund managers.
C. When NAM uses separate account managers to provide clients specialized asset
allocation strategies, the separate account manager will deduct the fees directly
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