ITEM 5 – FEES AND COMPENSATION
The specific manner in which fees are charged is established in a client’s written
agreement. However, SSPC’s general fee structures are outlined below:
When a client chooses to engage SSPC for investment advisory services, they do so on a
fee-only basis. SSPC’s investment management fees are assessed in the following ways:
• Strategic Portfolio Management Services and Customized Investment
Management Services are provided as Investment Advisory Services, and we charge a
percentage-based fee calculated as a percentage of the market value of the assets in
your account.
• For Financial Planning and Consulting Services, we charge a fee depending on
the scope of the planning services required.
Depending on the scope of the services provided, additional documents will be required
from the client in order to facilitate our financial planning and consulting guidance.
SSPC’s fees for Strategic Portfolio Management and Customized Investment
Management Services are negotiable but generally are between 0.75% and 1.25% based
on assets under management placed in the firm’s Investment Advisory Services as
follows:
Standard Management Fee Schedule
Investment Advisory Total Assets Under Annual Advisory Fee
Services Management as % of Total Assets
On the first $2,000,000 1.25%
On the next $3,000,000 1.00%
On the next $10,000,000 0.75%
Household minimum is typically $1,000,000 however, accounts established with less
than $1,000,000 are at the sole discretion of SlateStone.
SSPC enters into a written Investment Management Agreement “IMA” with each client
prior to providing services. The IMA describes the scope of SSPC’s services and how we
calculate and charge our fees.
Investment Advisory Fees - Automatic Fee Deduction/Billing
The percentage-based annual management fee is prorated and paid quarterly, in
advance, and is based on the total market value of portfolio assets on the last business
day of the previous quarter as valued by the custodian.
All investment management fees are charged to and deducted from the appropriate
brokerage account or another custodial account as directed by the client, unless
otherwise specifically arranged with the client. Account statements provided by the
custodian will show all transactions and positions in the account, including the amount
deducted for our fees. It is the responsibility of the client, not the custodian, to verify
that the advisory or other fee is applied to a client’s correctly.
If a client chooses not to have fees deducted directly from the custodial account or
desires to pay fees from another account or by invoice, management has sole discretion
to bill fees separately. Regardless of payment method, if the client is ever more than 60
days delinquent on paying any portion of fees due, the client authorizes SlateStone to
take such fees directly from the account (even in the case of a retirement account).
In certain unique relationships, the terms for fees and billing periods may differ from
those described herewith, typically for those clients who joined SSPC as part of a
corporate merger or acquisition. When a client joins us as a result of a combination
with another firm, we typically do not change the fee arrangement previously
established. In its sole discretion, SSPC may charge a lower investment management
fee based upon certain criteria (anticipated future additional assets, dollar amount of
assets to be managed, related client relationship, composition of assets to be managed,
future earning capacity of client, etc.)
Unless otherwise stated, SSPC’s investment management fees do not cover or include
brokerage commissions, transaction costs, custody fees or other related expenses (see
Additional Fees and Expenses not paid to SSPC below).
SSPC does not accept compensation from the sales of securities, share in commissions
or transaction costs.
Cancellation Process, Accrued Fees & Refunds
A client can terminate an account or the full relationship at any time or can change an
account objective upon notification to SSPC. Clients shall have five (5) business days
from the date of execution of the Investment Management Agreement to terminate
services for a full refund.
SSPC requires a written notice of termination of any of its services. Upon such notice,
SSPC will cease making investment decisions under the Investment Management
Agreement and/or providing financial advice incidental to the Letter of Engagement
for Financial Planning Services and will implement any reasonable written
instructions that are provided. The investment account(s) can be closed, and funds
withdrawn only after any open trades have been settled. Upon termination of an
investment account, SSPC will refund any pre-paid management fees, pro-rated to the
date of termination. The client refund amount will be either credited to the account or
paid by check to the account holder.
Additional Fees and Expenses
Mutual Fund and ETF Management Fees. Accounts invested in mutual funds and
exchange-traded funds generally also pay, indirectly, investment advisory fees to the
managers of those funds. As such, client accounts with investments in those types of
securities will be subject to two layers of management fees. An explanation of the fees
and expenses paid by each mutual fund is contained in that mutual fund’s prospectus.
Mutual Fund transaction fees. Depending on the custodian and availability, SSPC will
purchase and sell mutual funds with no transaction fees. Note that clients who do not
trade through specific custodians may not be eligible for these waived transaction fees.
Fees may be imposed upon early redemption, if the fund was owned prior to our
...