Item 5. Fees and Compensation
Description
Roundview bases its fees on a percentage of assets under management and fixed fees.
Investment Advisory Services
If a client determines to engage Roundview to provide discretionary and/or non-
discretionary investment advisory services on a fee basis, Roundview’s annual
investment advisory fees shall vary (up to 1.50% of the total assets placed under
Roundview’s management/advisement) and shall be based upon the level and scope of
the overall investment advisory services to be rendered, which is based upon various
objective and subjective factors, including, but not limited to, the amount of the assets
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placed under Roundview’s management, the level and scope of financial consulting
services to be rendered, and the complexity of the engagement. See Fee Differentials
below.
Each fee is payable in semi-annual installments (up to 0.75% per installment) in arrears,
based upon the value of the assets under management as of the end of the semi-annual
period appropriately weighted to give effect to additions and withdrawals to the account
during the applicable period.
Cash Positions. Roundview continues to treat cash as an asset class. As such, unless
determined to the contrary by Roundview, all cash positions (money markets, etc.) shall
continue to be included as part of assets under management for purposes of calculating
Roundview’s advisory fee. At any specific point in time, depending upon perceived or
anticipated market conditions/events (there being no guarantee that such anticipated
market conditions/events will occur), Roundview may maintain cash positions for
defensive purposes. In addition, while assets are maintained in cash, such amounts could
miss market advances. Depending upon current yields, at any point in time, Roundview’s
advisory fee could exceed the interest paid by the client’s money market fund.
Retirement Plan Services
If a client determines to engage Roundview to provide discretionary and/or non-
discretionary retirement plan services on a fee basis, Roundview’s annual investment
advisory fees shall vary (up to 1.50% of the total assets placed under Roundview’s
management/advisement) and shall be based upon the level and scope of the overall
investment advisory services to be rendered, which is based upon various objective and
subjective factors, including, but not limited to, the amount of retirement plan assets, the
level and scope of total services to be rendered, and the overall complexity of the
engagement. See Fee Differentials below.
Each fee is payable in quarterly installments, in arrears, based upon the value of the plan
assets as of the end of the quarterly period, appropriately weighted to give effect to plan
contributions and withdrawals during the applicable period.
Fee Differentials
As discussed above, Roundview prices its services based upon various objective and
subjective factors. As a result of these factors, similarly situated clients can and will pay
diverse fees, and the services to be provided by Roundview to any particular client could
be available from other advisors at lower fees. All clients and prospective clients should
be guided accordingly.
From time to time, Roundview may serve as the investment advisor for Charitable Donor
Advised Funds. In this case, funds are administered by Schwab Charitable and/or Fidelity
Charitable, both independent nonprofit organizations. Schwab Charitable and Fidelity
Charitable charge administrative fees based on a percentage of assets under
management. At its discretion, Roundview may provide a professional courtesy so that
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the total semi-annual fees do not exceed 0.50% semi-annually of the assets under
management. These fees may be collected either quarterly or semi-annually.
For Charitable Donor Advised Fund accounts where Roundview receives an advisory
fee on the client assets, Roundview has an economic incentive to advise the client to
contribute assets to the fund and keep assets in the fund. By so doing, Roundview would
continue to receive an advisory fee on such assets. This presents a conflict of interest
because Roundview has an incentive to recommend that the client invest in the fund and
keep assets within the fund rather than have the client recommend a grant to the client’s
designated charity. Roundview encourages clients to make grants from these accounts at
the client’s discretion.
Margin Accounts: Risks/Conflict of Interest. Roundview does not recommend the use
of margin for investment purposes. A margin account is a brokerage account that allows
investors to borrow money to buy securities or for other non-investment purposes. The
broker/custodian charges the investor interest for the right to borrow money and uses
the securities as collateral. By using borrowed funds, the customer is employing leverage
that will magnify both account gains and losses. Should a client determine to use margin,
Roundview will include the entire market value of the margined assets when computing
its advisory fee. Accordingly, Roundview’s fee could be based upon a higher margined
account value, resulting in Roundview earning a correspondingly higher advisory fee. As
a result, the potential of conflict of interest arises since Roundview may have an economic
disincentive to recommend that the client terminate the use of margin. Please Note: The
use of margin can cause significant adverse financial consequences in the event of a
market correction.
Fee Billing
Investment management fees are billed on a semi-annual basis, in arrears, meaning that
Roundview will invoice clients after the six-month billing period has ended. Payment in
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