ITEM 5: FEES AND COMPENSATION
A. Fees for Advisory Services
Piedmont’s fees are generally negotiable and are paid pursuant to investment advisory
agreements. Piedmont’s investment advisory fees are generally based on a percentage of assets
under management (“investment advisory fees”).
The annual fee schedule for investment advisory services is expressed as a percentage of total
assets. In addition to the fee schedule outlined below, different fee schedules may apply for long
standing clients as well as clients with certain investment mandates or special service needs.
Piedmont will quote exact percentages to be charged to each client and will include the fee
schedule within its Investment Advisory Agreement with the client.
Assets under Management Annual Fee %
$0 up to $250,000 1.50%
$250,000 – $500,000 1.25%
$500,000 – $1,000,000 1.15%
$1,000,000 – $5,000,000 1.00%
Amounts over $5,000,000 0.90%
Investment advisory fees may be directly debited from Piedmont’s clients’ accounts when the
following conditions are met:
• A qualified custodian as defined by Rule 206(4)-2 of the Investment Advisers Act of 1940
maintains the clients’ funds and securities.
• The qualified custodian agrees to send to each client a statement, at least quarterly, for which
it maintains funds or securities, identifying the amount of the funds and each security in the
account at the end of the period and setting forth all transactions in the account during that
period.
A client may also choose to be billed directly.
B. Fee Billing
Investment advisory fees are payable to Piedmont one quarter in advance at the rates indicated
in the schedule above based on the net value of the client’s assets under management (including
the client’s cash position) as of the last business day of the preceding quarter, unless otherwise
agreed to and stated in the Investment Advisory Agreement. An exception to this exists with
respect to unaffiliated private offering assets that are not held in a custodial account at Schwab,
Millennium Trust, etc. or are not Militello Capital, LLC sponsored assets that Piedmont can
directly observe. Effective April 1, 2017, Piedmont will no longer bill investment advisory fees
on these assets. Specifically, Piedmont will no longer bill investment advisory fees on assets
invested in Sanford Capital, LLC investments. Piedmont shall determine the net value of the
client’s assets under management, including cash or its equivalent and accrued income held for
investment, at the end of each calendar quarter, applying the same valuation procedures and
methods that it uniformly uses in its quarterly appraisals of client accounts.
Piedmont does not attempt to value a private fund, private limited liability company, or private
investment after the initial investment has been made. Because there is no secondary market for
the private investments, it is extremely difficult to place a valuation on them.
At the outset of the relationship, the client will direct the client’s custodian via written
authorization to pay from the client’s account to Piedmont, investment advisory fees for
investment advisory services rendered by Piedmont to the client. Piedmont, in turn, will request
that the custodian debit Piedmont’s fees directly from the client’s account and remit theses fees
to Piedmont. Each billing will be for one-quarter of the annual fee. If there is a period where
investment advisory services are provided for less than a full calendar quarter, the investment
advisory fee for this period will be prorated on a daily basis and refundable to the client for the
portion of the period that Piedmont has not served as investment adviser. All investment
advisory fees paid directly to Piedmont will be clearly reflected on the client’s brokerage
statements that are prepared by and sent to the client by the custodian.
C. Other Fees and Expenses Clients May Pay
Investment Company Fees. All fees paid to Piedmont for investment advisory services are
separate and distinct from fees charged by investment companies (mutual funds and exchange
traded funds) to their shareholders. Fees and expenses paid by fund shareholders are described
in each fund’s prospectus and statement of additional information. These fees will generally
include an investment advisory fee, administrative service fee, custodial fees, other fund
expenses and a possible distribution fee. In addition, funds incur brokerage and other transaction
costs.
A client could invest in an investment company directly, without the services of Piedmont. In
that case, the client would not receive the services provided by Piedmont which are designed,
among other things, to assist the client in determining which funds or other investments are most
appropriate to each client’s financial condition and objectives. Accordingly, a client investing
in a mutual fund or other funds should review both the fees charged by the funds and the fees
charged by Piedmont to fully understand the total amount of fees to be paid by the client and to
thereby evaluate the advisory services provided.
Piedmont may also recommend that a portion of the assets in an account be managed in an
individual account by an external investment manager. There are additional fees associated with
these investments and the client will pay those fees directly to the external investment manager.
Third Party Service Provider and Brokerage Fees. Clients may incur certain fees or charges
imposed by third-parties in connection with investments made by Piedmont on behalf of clients.
Such third parties would include the custodian at which the client maintains an account. These
fees and charges are separate and distinct from the fees paid to Piedmont and may include, but
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