Item 5 | Fees and Compensation
This section of the Brochure details the typical fee structures and compensation methodologies for
services provided by Pennington Partners. However, fees are generally negotiable and vary from client
to client based on a number of factors including, but not limited to, the aggregate assets under
advisement, the complexity, scope, and types of services to be provided, and the scope of the overall
relationship with such client. Clients should review their investment advisory agreement or other
relevant agreement for detailed information related to fees and compensation.
INVESTMENT ADVISORY SERVICES FEES
Pennington Partners charges an annual investment advisory fee for discretionary and non-discretionary
investment advisory services that is generally a fixed annual fee of a minimum of $100,000, subject to
negotiation. Alternatively, Pennington Partners may charge an investment advisory fee based upon a
percentage (%) of the market value and type of assets placed under Pennington Partners’ management.
Annualized rates for such services generally range up to 1.5% and are billed in accordance with the
terms set forth in the applicable investment advisory agreement. These terms may include, i) monthly,
quarterly, or annual billing, ii) billing based on the values of billable assets as of the last business day of
the preceding period, iii) billing based on the average daily balance of billable assets during the
preceding period, iv) billing in arrears or in advance, or v) another methodology specified in a client’s
investment advisory agreement or other relevant agreement.
To the extent advisory services begin after the start of a billing period, the investment advisory fee in
the first billing period is generally prorated. For fixed fee investment advisory services engagements, and
as set forth in the investment advisory agreement, the investment advisory fee generally increases
automatically as of the anniversary date of the investment advisory agreement. Automatic increases
generally range between 0% and 5%, as disclosed in the investment advisory agreement and agreed to
by the client. In the event of the termination of an investment advisory agreement prior to the end of a
billing period, the prorata portion of any fee paid in advance generally will be promptly refunded.
Securities held in accounts managed by Pennington Partners that are listed on a national securities
exchange shall generally be independently valued by the account custodians. Investments that do not
have readily available market prices provided by third parties are generally valued in good faith by
Pennington Partners using relevant information available.
Pennington Partners may deduct its investment advisory fees from clients’ assets or bill clients for fees
incurred, as agreed to with each client. When permitted pursuant to written client authorization,
Pennington Partners’ investment advisory fees are deducted directly from a managed account held by a
custodian. Clients paying fees to Pennington Partners via direct deduction will be provided with a
statement, at least quarterly, from the custodian reflecting the deduction of the advisory fees. We urge
all Clients to carefully review the advisory fees shown in the custodial statements. If the client account
does not contain sufficient cash or cash equivalents to pay the advisory fees due, Pennington Partners
has limited authority to sell or redeem securities in sufficient amounts to cover those fees. In the event
Pennington Partners bills a client for the investment advisory fee, payment is due upon receipt of
Pennington Partners’ invoice.
Pennington Partners’ annual investment advisory fee includes investment advisory services, and, to the
extent specifically requested by the client, financial planning services. In the event that the client
requires extraordinary planning services, Pennington Partners may determine to charge for such
additional services, the amount of which shall be negotiable and set forth in a separate written notice to
the client.
In the event Pennington Partners engages a sub-advisor to assist with the discretionary management of
a client account, such client will typically incur additional fees payable to the sub-advisor for its
investment sub-advisory services. All fees and expenses of sub-advisors are exclusive of, and in addition
to, Pennington Partners’ fees. Clients can access certain sub-advisors directly and, in such cases, may be
able to access the services of such sub-advisors at lower cost than available through Pennington
Partners. Access to certain sub-advisors could be limited to certain types of accounts and could be
subject to account minimums as determined by the sub-advisor.
FAMILY OFFICE SERVICES AND BUSINESS STRATEGY CONSULTING FEES
Periodic consulting services, such as projects involving governance, structure, strategy, operations,
succession planning, global benchmarking, and best practices, are customized to the unique needs of
each family and are generally priced on a fixed fee basis according to the project and scope of work or
on an hourly basis, depending upon the level and scope of the service(s) required and the professional(s)
rendering the service(s).
With the exception of bookkeeping and bill payment services, ongoing family office services, such as tax
analysis, estate planning, household concierge, and healthcare concierge services, are generally included
in Pennington Partners’ fixed annual investment advisory fee. To the extent an investment advisory
client whose annual fee is based upon a percentage (%) of the market value and type of assets placed
under Pennington Partners’ management wishes to receive ongoing family office services, Pennington
Partners typically requires such a client to move to a fixed annual fee arrangement. In the event that the
client requires extraordinary ongoing family office services, Pennington Partners may determine to
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