Item 5 – Fees and Compensation
Investment Advisory Fees
RINET’s fees for investment advisory services are charged as a percentage of assets under
management as of a December 31st year end valuation date. The fee schedule ranges from
.35% to 1.00 % depending upon the amount of assets involved and the nature of the
investment advisory services performed. The minimum annual fee required for this service
is $40,000. Clients may be charged a fee that is different from the minimum fee or fee
schedule. RINET will quote an exact percentage to each client based on the complexity and
total dollar value of their account and may group certain related client accounts for the
purpose of determining the fee.
For some private equity investments where, updated valuations are not available within 60
days of the calendar year end, RINET will use the latest valuation date available for purposes
of computing investment advisory fees. Usually this will be September 30th but may be
different depending on the particular investment.
Unless otherwise agreed, RINET’s fees will be directly debited from client accounts quarterly
in arrears at the end of each calendar quarter.
Fees for the initial year of an account opening will be based on the value of investable assets
at the time the account is opened and adjusted on December 31st thereafter. In some
instances, “new client” investable assets will be systematically transitioned over to RINET
Advisory Services. In instances such as these billings can be administered on a pro-rata basis
over the integration period.
RINET and its employees are not compensated for the purchase or sale of any securities.
Financial Planning and Consulting Fees
Financial planning/consulting fees are charged as a fixed fee and are adjusted annually for
inflation. Generally, fees for these services range from $20,000 to $30,000. There is no
minimum fee for this service. These rates may be negotiable under certain circumstances
and may be reduced or waived for clients who use RINET for investment advisory services.
Trust Service Fees
Fees for RINET’s trust services are negotiable depending on the scope and complexity of the
work involved. There is no stated minimum fee and the cost of the service is often
incorporated into RINET’s planning and consulting fees.
Wrap Fees
RINET does not participate in any Wrap fee programs. Such programs are characterized as
a single client relationship wherein the wrap fee program sponsor (”Sponsor”) typically
refers to a full-service broker who has a contract with the client under which portfolio
management, reporting, custody and trading will be provided for a single definable fee
(“Wrap Fee”). The Sponsor simultaneously has a side agreement with an investment advisor
(“Sub-Advisor”), such as RINET, which allows the Sub-Advisor to direct the Sponsor as to
which securities are to be held in the client’s portfolio. The Sub-Advisor is paid a percentage
of the Wrap Fee collected by the Sponsor.
RINET does have dual client relationships wherein the client has entered into separate
contracts with RINET and a brokerage firm. The client is therefore simultaneously a direct
client of both firms. Under such arrangements, RINET charges its fee to the client’s account
separately from the broker’s fee and the client may sometimes direct the brokerage firm to
pay RINET’s fee from the client’s brokerage account. In other cases, the client may pay
RINET’s fee directly. The brokerage firm always charges and collects its fee separately.
RINET is not paid any portion of the fee charged by the brokerage firm.
Other Fees and Expenses
All fees paid to RINET 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 generally include a management fee,
other fund expenses, and a possible distribution fee. If the fund also imposes sales charges,
a client may pay an initial or deferred sales charge.
A client could invest in a mutual fund directly, without the service of RINET which is
designed, among other things, to assist the client in determining which mutual fund or funds
are most appropriate to their financial condition and objectives. Accordingly, clients and
prospective clients should review both the fees charged by the funds and the fees charged
by RINET to fully understand the total amount of fees they will pay for the services provided.
In addition to RINET’s advisory fees, clients are 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).
Item 6 – Performance Fees and Side-by-Side Management