Item 5 Fees and Compensation
INDIVIDUAL PORTFOLIO MANAGEMENT FEES
Our annual fees for Individual Portfolio Management are based upon a percentage of
assets under management and generally range from .5% to 1.0% per annum.
The annualized fee for Individual Portfolio Management is charged quarterly in arrears
as a percentage of assets under management at the end of the quarter, according to the
following schedule:
Assets Under Management - Annual Fee
Fee Schedule:
Accounts less than $1,000,000
1.00% per annum
Accounts $1,000,001 to $5,000,000
0.75% per annum
Accounts over $5,000,000
0.50% per annum
Accounts over $10,000,000
Per individual agreement
Individual Portfolio Management: Our fees are charged in arrears shortly after the end
of each calendar quarter based upon the market value of the client's account at the end
of that quarter. Fees are debited from the account in accordance with the client
authorization in the Investment Advisory Agreement. Fees in the first quarter of the
Agreement will be prorated from the inception date to the end of the first quarter.
Limited Negotiability of Advisory Fees: Although Prentice Investment Management,
LLC has established the above fee schedule, we retain the discretion to negotiate
alternative fees on a client-by-client basis. Client facts, circumstances and needs are
considered in determining the fee schedule. These include the complexity of the client's
needs, assets to be placed under management, anticipated future additional assets;
related accounts; portfolio style, account composition, reporting requirements, among
other factors. The specific annual fee schedule is identified in the Investment Advisory
Agreement between the adviser and each client.
OTHER SERVICES FEES
When the client wishes Prentice Investment Management, LLC to evaluate and advise
them on the performance of other managers the client may utilize, the charge is set by
negotiation and is usually based on the number of managers to be evaluated, the
frequency of the evaluation, and the size and complexity of the accounts.
GENERAL INFORMATION
Termination of the Advisory Relationship: A client agreement may be canceled at
any time, by either party, for any reason upon receipt of 7 days written notice. Only fees
earned, but unpaid since the last billing period will be assessed on terminated accounts
or services.
Mutual Fund Fees: All fees paid to Prentice Investment Management, LLC for
investment advisory services are separate and distinct from the fees and expenses
charged by mutual funds to their shareholders. These fees and expenses are described
in each fund's prospectus. These fees will generally include a management fee, other
fund expenses, and a possible distribution fee. If the fund also imposes a sales charge,
a client may pay an initial or deferred sales charge. Prentice Investment Management,
LLC only purchases "no load" mutual funds and does not participate in any sales
charges or distribution fees (12b-1 fees). A client could invest in a mutual fund directly,
without our services. In that case, the client would not receive the services provided by
our firm which are designed, among other things, to assist the client in determining
which mutual fund or funds are most appropriate to each client's financial condition and
objectives. Accordingly, the client should review both the fees charged by the funds and
our fees to fully understand the total amount of fees to be paid by the client and thereby
evaluate the advisory services being provided. Prentice Investment Management, LLC
does not offer wrap fee programs.
Additional Fees and Expenses: In addition to our advisory fees, clients are also
responsible for the fees and expenses charged by custodians and imposed by broker
dealers, including, but not limited to, any transaction charges imposed by a broker dealer
with which an independent investment manager effects transactions for the client's
account(s). Please refer to the "Brokerage Practices" section (Item 12) of this Form ADV
for additional information.
ERISA Accounts: Prentice Investment Management, LLC is deemed to be a fiduciary to
advisory clients that are employee benefit plans or individual retirement accounts (IRAs)
pursuant to the Employee Retirement Income and Securities Act ("ERISA"), and
regulations under the Internal Revenue Code of 1986 (the "Code"), respectively. As
such, our firm is subject to specific duties and obligations under ERISA and the Internal
Revenue Code that include among other things, restrictions concerning certain forms of
compensation. To avoid engaging in prohibited transactions, Prentice Investment
Management, LLC may only charge fees for investment advice about products for which
our firm and/or our related persons do not receive any commissions or 12b-1 fees.
Advisory Fees in General: Although Prentice Investment Management, LLC believes
its fees to be very competitive by industry standards, clients should note that similar
advisory services may (or may not) be available from other registered (or unregistered)
investment advisers for similar or lower fees.
Limited Prepayment of Fees: Under no circumstances do we require or solicit payment
of fees in advance of any services rendered.