Item 5 – Fees and Compensation
We require a minimum dollar value of your assets entering into an advisory relationship.
Typically, our clients need $10,000,000 of investable assets for investment advisory and
financial planning services. Our typical full service family office offering is reserved for clients
with investable assets in excess of $50,000,000. Exceptions to this general rule may be granted
on a case-by-case basis for reasons such as the potential for the client to meet the required
minimum within a reasonable time period.
RCA’s fees for all services are based upon a percentage of the assets under advisement (“AUA”)
and are negotiated on a case-by-case basis with each client.
The starting point for fees charged to each client is the following schedule:
Market Value of AUA Annual Rate
$ 10 million - $ 50 million 1.50%
$ 51 million - $100 million 1.00%
$101 million - $200 million 0.75%
$201 million + 0.50%
Adjustments to this fee schedule are then made based on the types of securities under
management and the services received by the client.
Fees are customarily billed in advance on a quarterly basis, based on the average market value of
the assets expected to be under advisement for that period. Related accounts are aggregated for
fee calculation. Fees are calculated by multiplying the appropriate rate by a simple average of
the sum of the market values of the account assets for the last day of each month for the previous
quarter. If the actual average market value of the assets in the current billing period differs from
the estimated quarterly average, a fee adjustment will be made to the fee calculation for the next
quarterly billing cycle.
In addition, a client may negotiate to be billed in arrears, instead of in advance, but such an
exception would depend upon special circumstances involving such factors as the size and
complexity of the assets under advisement.
Fixed fees are determined on a case-by-case basis and consideration is given to and weighted by
such factors as the amount of work involved, level of staff experience required, and degree of
complexity of the assignment.
Occasionally, we may enter into a performance fee or performance based allocation arrangement
with clients for managing specific investments, as described in more detail in Item 6 below.
Such arrangements are only charged consistent with SEC rules and regulations.
RCA may also enter into consulting arrangements with clients for which we are paid a fixed
monthly or annual fee for such services.
As indicated in our advisory agreement with you, we will issue you quarterly invoices for our
services, and you agree to pay us by check or wire transfer within 30 days of the date of the
invoice. Payment must be received within 60 days. Interest of 1.0% per month will be charged
on unpaid invoices after 60 days.
Alternatively, clients may agree to have RCA deduct fees from their accounts directly.
Additional Fees and Expenses
Advisory fees payable to us do not include all the fees you will pay when we purchase or sell
securities for your account(s). The following list of fees or expenses are what you may pay
directly to third parties when a security is being purchased, sold or held in your account(s) under
our advisement. Fees charged are charged by the broker dealer / custodian.
We do not receive, directly or indirectly any of these fees charged to you. These fees include:
• Brokerage commissions;
• Transaction fees;
• Exchange fees;
• SEC fees;
• Advisory fees and administrative fees charged by Mutual Funds (“MFs”) and Exchange
Traded Funds (“ETFs”);
• Advisory fees charged by sub-advisers (if any are used for your account);
• Custodial fees;
• Deferred sales charges (on MFs or annuities);
• Odd-Lot differentials;
• Transfer taxes;
• Wire transfer and electronic fund processing fees;
• Commissions or mark-ups/mark-downs on security transactions; and
• Among others that may be incurred.
In addition, we do not have or employ any employee who receives (directly or indirectly) any
compensation from the sale of securities or investments that are purchased or sold for your
account or to which we provide consulting expertise/services. As a result, we are a “fee only”
investment adviser. We do not have any potential conflicts of interest at present that relate to
any additional (and undisclosed) compensation from you or your assets that we manage.
Termination of the Contract and Refund Policy
Clients may cancel their investment advisory agreement with RCA within five business days of
execution of the agreement without penalty.
Thereafter, you must give us at least 30 days advance written notice before terminating your
investment advisory agreement. Contracts terminated within the current billing period will have
the fees pro-rated to the termination date. Earned fees would be calculated based upon the
number of days since the last billing quarter through the termination date. Any unearned fees
would be refunded to the client within 14 business days of the termination date.