Item 5 – Fees and Compensation
5.A. Adviser Compensation
Sage Mountain offers wealth management services generally for a quarterly fee subject to
the terms of each client’s written Advisory Agreement. Fees may be either a fixed annual fee
or based upon assets under the Firm’s management or advisement. Clients may also be
subject to a minimum fee. In addition, the Firm offers standalone financial planning services
for a fixed fee.
Wealth Management Fees
Sage Mountain offers wealth management services for a quarterly fee based on a fixed annual
fee, or the average daily balance of assets managed or advised upon during the billing period.
Fees for the first billing period will be pro-rated beginning when the account is funded, or
the fixed fee takes effect through the last day of the billing period. This management fee
varies from 0.20% to 1.25% per annum depending upon the size and complexity of a client’s
portfolio and the type of services rendered.
Minimum Annual Fee
Account relationships who wish to engage our services may do so by agreeing to a minimum
annual fee of $100,000, billed quarterly and in arrears. Sage Mountain, in its sole discretion,
reserves the right to waive its minimum fee and/or charge a lesser investment advisory fee
based upon certain criteria (e.g., historical relationship, type of assets, anticipated future
earning capacity, anticipated future assets, related accounts, negotiations with clients, etc.).
Clients should note that similar advisory services may (or may not) be available from other
investment advisors for similar or lower fees.
Due to the complexity of certain relationships, Sage Mountain may negotiate a base fee
higher than the minimum fee plus an asset-based fee of 0.05%. Base fees charged in these
complex relationships are negotiable, but generally range from $100,000 to $750,000 per
year, billed quarterly and in arrears.
Financial Planning and Consulting Fees
For consulting services, the Firm provides with respect to certain client holdings that are not
managed on a regular basis (e.g., held-away assets, concentrated positions, accommodation
accounts, alternative investments, etc.), Sage Mountain may negotiate a fee rate that differs
from the wealth management fee set forth above. This will be a fixed fee for financial
planning services, and a fixed or asset-based fee for investment consulting services, under
stand-alone engagements. These fees are negotiable depending upon the scope and
complexity of the services and the professional rendering the financial planning and/or the
consulting services. If the client engages the Firm for additional investment advisory
services, Sage Mountain may offset all or a portion of its fees for those services based upon
the amount paid for the financial planning and/or consulting services. Sage Mountain may
also charge a fee for reporting on non-managed assets. This “reporting only” fee is typically
a quarterly fee of 0.05% billed in arrears.
The terms and conditions of the financial planning and/or consulting engagement are set
forth in the Financial Planning and/or Investment Consulting Agreement and Sage Mountain
requires one-half of the fee payable upon execution of the agreement. The outstanding
balance is due upon delivery of the financial plan or completion of the agreed upon services.
Trustee Services Fees
Sage Mountain supervised persons may serve as trustee for client accounts. When such
services are provided, Sage Mountain will charge a fee for these services in accordance with
the applicable services agreement. Trustee fees are determined based on the complexity and
requirements of the services and are billed quarterly in arrears. Clients are under no
obligation to appoint a Sage Mountain supervised person to serve as a trustee.
Note About Fee Calculation Based on Quarter-End or Month-End Account Values:
Clients who elect to be charged an Asset-Based Fee should note that there may be variations
in the account values used to calculate Sage Mountain’s fees and the account values on the
last day of the previous quarter or other period as reflected on the account statement the
client receives from the custodian. These variations include, but are not limited to, variations
resulting from (1) unsettled trades; (2) accrued income; and (3) dividends earned but not
received. Usually, any differences in account values due to these variations will be relatively
small. Sage Mountain Advisors will not make any adjustments, refunds, or further
assessments of fees based on these differences. Any client who has a question about any
such difference or any other issue relating to calculations of fees is encouraged to contact
Sage Mountain for an explanation.
5.B. Direct Billing of Advisory Fees
Clients provide Sage Mountain and/or certain Independent Managers with the authority to
directly debit their accounts for payment of the investment advisory fees. The Financial
Institutions that act as the qualified custodian for client accounts, from which the Firm
retains the authority to directly deduct fees, have agreed to send statements to clients not
less than quarterly detailing all account transactions, including any amounts paid to Sage
Mountain. Alternatively, clients may elect to have Sage Mountain send a separate invoice for
direct payment.
Account Additions and Withdrawals
Clients can make additions to and withdrawals from their account at any time, subject to
Sage Mountain’s right to terminate an account. Additions can be in cash or securities
provided that the Firm reserves the right to liquidate any transferred securities or declines
to accept particular securities into a client’s account. Clients can withdraw account assets on
notice to Sage Mountain, subject to the usual and customary securities settlement
procedures. However, the Firm designs its portfolios as long-term investments, and the
withdrawal of assets may impair the achievement of a client’s investment objectives.
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