Item 5 - Fees and Compensation
Advisory Services
The Adviser typically offers investment management services for an annual fee based on the
amount of assets under management. This fee generally varies between 10-95 basis points
(0.10% - 0.95%) depending on the scope and complexity of the advisory services.
Advisory fees set forth above exclude brokerage commissions, account closing/transfer fees,
custodial fees, taxes, separate account investment management fees charged by SMA Managers
and other costs incidental to the purchase and sale of investments. For more information on
these types of fees, see Item 12, “Brokerage Practices,” below. Clients should review the terms
of their agreement with any SMA Manager and the SMA Manager’s Form ADV firm brochure
for information regarding fees payable by the client to the SMA Manager for services provided
to the client.
Operose Advisors LLC
Form ADV, Part 2A
The Adviser negotiates fees with clients depending on various factors, including, but not limited
to, client investment objectives, client investment restrictions, the nature and extent of the
relationship with the client and other business factors. Fees are waived or reduced for accounts
of persons affiliated with the Adviser and may be waived or reduced for other reasons at the
Adviser’s discretion.
The Adviser’s fees are generally payable quarterly in arrears, based on the market value of the
average daily balance of the client’s account during the period, as valued by the client’s
custodian, alternative investment vehicle sponsor, third party recordkeeper, or the client, and in
accordance with the client’s advisory services agreement. Because fees are generally based on
the average daily basis, the value of the account typically includes cash and is adjusted based on
the contributions and withdrawals to the account. When reporting the value of alternative
investments, the Adviser will generally rely on the most recent valuations provided by the
private investment sponsor, or the client. These valuations are typically delayed. As a result, the
Adviser will increase or decrease the value of the alternative investment based on
contributions/withdrawals received during the quarter.
In the instance where the Adviser determines a price is not reflective of the market value, the
investment will be valued in such manner as shall be determined in good faith by the Adviser to
reflect its fair market value, the price we believe clients could reasonably receive upon sale of
the asset. Certain clients utilize margin in the management of their account(s). For these
account(s) the fee is assessed on the net asset balance in the account. In addition, other clients
utilize a pledged asset line, the fee for those accounts is assessed on the gross balance in the
account.
Fees are prorated for a partial calendar quarter at the beginning of a client relationship. Assets of
related client accounts are typically aggregated to determine if a lower fee rate applies. When
calculating fees, assets under management typically include cash or cash equivalents. Since the
fee is asset-based, if assets are deposited or withdrawn in the account during the quarter, the fee
is adjusted accordingly. The Adviser typically does not allow clients to prepay fees. Clients may
select to either authorize the Adviser to deduct advisory fees directly from the client’s custodial
account or to have the Adviser bill the client directly for advisory fees incurred. It is the client’s
responsibility to review the advisory fees included in the account statements provided by the
client’s custodian.
At its discretion, the Adviser charges flat fees in lieu of a fee based on a percentage of assets
under management for providing advisory services. These fees are negotiated with clients on a
case-by-case basis and vary depending on the scope and complexity of the advisory services.
Advisory services agreements will continue until terminated by either the Adviser or the client,
generally on prior written notice of at least 30 days. In the event of termination, any fees
outstanding are typically billed on a pro rata basis based on the number of days that the account
was open during the applicable period. Termination of an advisory services agreement will not
affect transactions that the Adviser has initiated on the client’s behalf prior to the effective date
of such termination.
Operose Advisors LLC
Form ADV, Part 2A
Operose Capital Funds
The Adviser will receive an investment management fee for the services it provides to each Operose
Capital Fund, as described in the fund’s offering documents. The Funds may have multiples classes of
shares sold to investors based on their eligibility requirements. Clients of the Adviser are eligible for
various share classes based on their assets under advisement with the Adviser at the time of investment.
To the extent an investor in the Operose Capital Fund is a client of the Adviser, the investor will either
pay the investment management fee for the Fund, or an investment advisory fee to the Adviser, but in
no instance will an investor pay a fee for both. In addition, an affiliate of the Adviser acting as the
general partner to the Funds may receive performance-based compensation for achieving certain
investment performance metrics as described in Item 6 below.
Retirement Plan Services
Fees for retirement plan services are typically paid quarterly in arrears based upon: (1) the total
market value of the average daily balance of assets in the plan; or (2) the market value as of
either each month or quarter-end. Fees are typically calculated by the third-party administrator
and are pro-rated for partial periods at the inception or termination of the relationship. Fees for
these services vary between 10-95 basis points (0.10% - 0.95%) depending on the scope and
complexity of the advisory services.
Retirement plan fees charged by the Adviser exclude fees paid to third-party administrators and
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