Item 5: Fees and Compensation
Our fees for investment advisory services are based on a percentage of assets under
management, and are calculated according to the schedule shown below:
ANNUAL PAYMENT
FROM TO FEE PERIOD
0.00 250,000.00 0.9500% Monthly
250,000.00 500,000.00 0.6000% Monthly
500,000.00 1,500,000.00 0.5750% Monthly
999,999,999.00
1,500,000.00 0.3500% Monthly
Fees are deducted from each client’s assets on a monthly basis; the amount is calculated
by utilizing the schedule shown above and dividing the result by 12 (to derive a monthly
payment). Except under very specific circumstances, these fees are not negotiable. We
may, under certain circumstances, allow clients to make payments by means other than
deduction from assets. These arrangements will be negotiated separately with each client
as necessary, and will be in writing. Clients will be provided a monthly bill showing how
their fees were calculated by the custodian according to their fee schedule.
For other services we may provide, fees charged to clients will be based on either hourly
rates or a fixed fee depending on the service to be provided. These fees will generally be
calculated on the basis of $125/hr. for professional services and $40/hr. for secretarial
time. These fees may be negotiable, and fees to be charged for these other services will
be in writing.
Clients will also be charged transaction fees for trading securities through a brokerage
that is independent of Mike Parke Investment Management, LLC. We generally buy and
sell securities in blocks to minimize cost per share to our clients, and then allocate shares
to client accounts as appropriate. Brokerage costs are currently $0.08 per share for trades
involving less than 5000 shares, $0.06 for share amounts from 5000 to 9,999, $0.04 for
share amounts from 10,000 to 29,999, and $0.03 for share amounts from 30,000 and
more. Minimal “ticket charges” may be added to the above fees by the broker. These
fees are not negotiable.
We do not accept custody for any client funds, so clients will be charged a monthly fee
by an independent custodian for providing this service. Clients will execute a separate
written agreement with the current custodian, which will provide a current fee schedule.
We may agree to allow a client to use a different broker or custodian, but we generally try
to discourage this because of the cost advantages to the client for the block trading as
described above and administrative difficulties for us. If we do agree to allow a client to
use a different broker or custodian, this agreement will be in writing and all fees, billing
methods, and payment methods will be negotiated and disclosed in such document.
Although our primary focus is individual stocks and bonds, we may at times use mutual
funds in client portfolios. Mutual funds may charge their own fees above and beyond our
management fees and the custodial and brokerage fees mentioned above. These fees may
include front- or back-end loads; we will not use funds with either of these loads unless
there is a very specific reason. This fee information is public and widely available, and
we can provide individual clients with this information if desired.
ETFs (exchange traded funds) may also have fees above and beyond our management
fees and the custodial and brokerage fees mentioned above. This fee information is
public and widely available, and we can provide individual clients with this information
if desired.
Please refer to the Brokerage Practices and Custody sections of this brochure for further
information.
We do not receive any compensation other than the fees mentioned above, and do not
accept or charge any pre-paid or advance fees.