Item 5 Fees and Compensation
A.
INVESTMENT ADVISORY SERVICES
The Registrant provides discretionary and/or non-discretionary investment advisory
services on a fee basis. The Registrant’s annual investment advisory fee is based upon a
percentage (%) of the market value of the assets placed under the Registrant’s
management and is negotiable but generally does not exceed 1.5%.
The Registrant does not generally require an annual minimum fee or asset level for
investment advisory services although it reserves the right to accept or reject any
prospective client.
Registrant, in its discretion, may charge a lesser investment advisory fee, charge a flat
fee, waive its fee entirely, or charge fee on a different interval, based upon certain criteria
(i.e. anticipated future earning capacity, anticipated future additional assets, dollar
amount of assets to be managed, related accounts, account composition, complexity of
the engagement, anticipated services to be rendered, grandfathered fee schedules,
employees and family members, courtesy accounts, competition, negotiations with client,
etc.). As a result of these factors, similarly situated clients could pay different fees, the
services to be provided by the Registrant to any particular client could be available from
other advisers at lower fees, and certain clients may have fees different than those
specifically set forth above.
B. Clients may elect to have the Registrant’s advisory fees deducted from their custodial
account. Both Registrant’s Investment Advisory Agreement and the custodial/clearing
agreement authorize the custodian to debit the account for the Registrant’s investment
advisory fee and to remit that management fee to the Registrant in compliance with
regulatory procedures. In the limited event that the Registrant bills the client directly,
payment is due upon receipt of the Registrant’s invoice. The Registrant shall deduct fees
and/or bill clients quarterly in advance, based upon the market value of the assets on the
last business day of the previous quarter.
4828-0180-5026, v. 1
As discussed below, unless the client directs otherwise or an individual client’s
circumstances require, the Registrant shall generally recommend that Fidelity Brokerage
Services (“Fidelity”) serve as the broker-dealer/custodian for client investment
management assets. Custodians such as Fidelity charge brokerage commissions and/or
transaction fees for executing certain securities transactions. In addition, client accounts
may invest in open-end mutual funds (including money market funds) and ETFs that
have various internal fees and expenses (i.e. management fees), which are paid by these
funds but ultimately borne by clients as a fund shareholder. These internal fees and
expenses are in addition to the fees charged by the Registrant.
C. Registrant’s annual investment advisory fee shall be prorated and paid quarterly, in
advance, based upon the market value of the assets on the last business day of the
previous quarter.
The Investment Advisory Agreement between the Registrant and the client will continue
in effect until terminated by either party by written notice in accordance with the terms of
the Investment Advisory Agreement. Upon termination, the Registrant shall refund the
pro-rated portion of the advanced advisory fee paid based upon the number of days
remaining in the billing quarter.
E. Securities Commission Transactions. In the event that the client desires, the client can
engage Registrant’s Principals, Richard Simkus and Robert Savino, in their individual
capacities, as registered representatives of Purshe Kaplan Sterling Investments (“PKS”), a
FINRA member broker-dealer, to implement investment recommendations on a
commission basis. In the event the client chooses to purchase investment products
through PKS, PKS will charge brokerage commissions to execute securities transactions,
a portion of which commissions PKS will pay to Registrant’s representatives, as
applicable. The brokerage commissions charged by PKS may be higher or lower than
those charged by other broker-dealers. If clients purchase mutual funds on a
commission-basis in a brokerage account, PKS, as well as Registrant’s Representatives,
will also receive Rule 12b-1 fees during the period that the client maintains the
investment.
1. Conflict of Interest: The recommendation that a client purchase a commission
product from PKS presents a conflict of interest, as the receipt of commissions
may provide an incentive to recommend investment products based on
commissions to be received, rather than on a particular client’s need. .
Additionally, the Registrant generally addresses commissionable sales conflicts
that arise when explaining to clients these sales create an incentive to recommend
based on the compensation to be earned and/or when recommending
commissionable mutual funds, explaining that “no-load” funds are also available.
No client is under any obligation to purchase any commission products from
Messrs. Simkus or Savino The Registrant’s Chief Compliance Officer,
Richard Simkus, remains available to address any questions that a client or
prospective client may have regarding the above conflict of interest.
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