Item 5 – Fees and Compensation
General Fee Information
Clients enter into one of two fee arrangements. For certain discretionary portfolio management
services, clients participate in a Wrap Fee Program sponsored by UBS or Wells Fargo (each, a “Wrap
Program”). The Wrap Program fee structure includes the brokerage expenses (e.g., commissions,
ticket charges, etc.) of the account, charges for custody services and the management fee paid to the
Adviser. Under the all-inclusive billing alternative, the client is charged a single fee that captures the
management, brokerage, custody and administrative portions collectively. There is not a minimum
portfolio asset value size requirement for participation in a Wrap Program.
For most non-discretionary portfolio management services and certain discretionary portfolio
management services, clients will pay management fees to the Adviser separately from the brokerage
expenses, transaction costs and custody fees of the account. The brokerage expenses may take the
form of asset-based pricing, meaning that the broker/dealer charges the account a flat-rate
percentage to cover all brokerage expenses, or these expenses may be assessed on a per-trade basis.
Please see Item 12 for additional information.
In either of these arrangements, the fees noted above are separate and distinct from the internal fees
and expenses charged by mutual funds, exchange traded funds (“ETFs”) or other investment pools to
their shareholders (generally including a management fee and fund expenses, as described in each
fund’s prospectus or offering materials), mark-ups and mark-downs, spreads paid to market makers,
fees for trades executed away from the custodian, deferred sales charges, odd-lot differentials,
transfer taxes, wire transfer fees, electronic fund fees and other fees and taxes on brokerage accounts
and securities transactions. Each client should review all fees charged by funds, brokers, the Adviser
and others to fully understand the total amount of fees paid by the client for investment and financial-
related services.
Portfolio Management Fees
Piedmont will generally charge fees based upon assets under management and fee structures are
tiered based upon the amount of assets under management for each mandate. Fees are charged to
clients on a quarterly basis. On occasion, Piedmont will agree to perform investment advisory
services for a client in exchange for a performance-based fee pursuant to Rule 205-3 of the
Investment Advisers Act of 1940.
Minimum Institutional
Product First Next Over Account Size
$50M $50M $100M
Market Plus 35 BP 30 BP 25 BP $10 million
Core Value 45 BP 40 BP 30 BP $5 million
Optimized SMID Core 60 BP 50 BP 40 BP $5 million
Optimized Small Cap Core 65 BP 55 BP 45 BP $5 million
Strategic Smart Beta 15 BP 12 BP 10 BP $5 million
Product For Up For Over Minimum Institutional
To $250M $500M Account Size
$250M to
$500M
Russell 1000 Value Index Strategy 5BP 3BP 2BP $50 Million
Russell 1000 Growth Index Strategy 5BP 3BP 2BP $50 Million
Russell 2000 Index Strategy 8BP 4BP 3BP $10 Million
S&P 500 Index Strategy 5BP 3BP 2BP $50 Million
S&P 400 Index Strategy 6BP 4BP 2BP $50 Million
Product First Next Next Over Minimum Institutional
$50M $25M $25M $100M Account Size
Yield Advantage (Y.A.) Opportunistic
Core 30BP 28BP 25BP 20BP $20 Million
Y.A. Intermediate Govt./Credit 25BP 22BP 20BP $20 Million
Y.A. Limited Duration 15BP 13BP 10BP $20 Million
Y.A. Differentiated Income 40BP 30BP 25BP 20BP $20 Million
Y.A. Govt./Credit 30BP 28BP 25BP 20BP $20 Million
The minimum annual fee for all strategies is $25,000. Fees and institutional account minimums are
negotiable. The specific manner in which fees are charged by Piedmont is established in a client’s
Investment Management Agreement (“IMA”) with Piedmont. No compensation will be due prior to
the rendering of service. After the end of each quarter, clients will be invoiced in arrears for services
rendered during the previous quarter. Clients may either remit compensation directly to Piedmont,
or alternatively, clients may instruct their custodian to compensate Piedmont for its services from
the assets contained in the account. If the client has given permission to Piedmont to authorize their
(the client’s) custodian to deduct the fee directly from the client’s account, the client must provide
written authorization for such withdrawals as provided in their IMA or by a separate written
agreement that permits the fee to be paid directly from the client’s account.
Management fees shall be prorated for each capital contribution and withdrawal made during the
applicable calendar quarter (except for de minimis contributions and withdrawals). Accounts
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