Item 5 – Fees and Compensation
In certain circumstances, all fees, account minimums and their applications to family
circumstances may be negotiable. Strategic requires a minimum account size of $100,000
for Investment Management Services.
Strategic has contracted with Focus Partners Advisor Solutions for services including trade
processing, collection of management fees, record maintenance, report preparation,
marketing assistance, and research. Strategic has also contracted with Focus Partners
Advisor Solutions for sub-advisory services with respect to clients’ fixed income accounts.
Strategic pays a fee for Focus Partners Advisor Solutions services based on management
fees paid to Strategic on accounts that use Focus Partners Advisor Solutions. The fee paid
by Strategic to Focus Partners Advisor Solutions consists of a portion of the fee paid by
clients to Strategic and varies based on the total client assets participating in Focus
Partners Advisor Solutions through Strategic. These fees are not separately charged to
advisory clients.
The specific manner in which fees are charged by Strategic is established in a client’s
written agreement with Strategic. Investment Management and Employee Benefit Plan
clients will be invoiced in advance at the beginning of each calendar quarter based upon
the value (market value based on independent third party sources or fair market value in
the absence of market value; client account balances on which Strategic calculates fees at
times will vary from account custodial statements based on independent valuations and
other accounting variances, including mechanisms for including accrued interest in account
statements) of the client’s account at the end of the previous quarter. New accounts are
charged a prorated fee for the remainder of the quarter in which the account is incepted
(date of first trade). The fee schedule may be amended from time-to-time by Strategic upon
thirty (30) days advance written notice to clients.
Strategic will request authority from the client to receive quarterly payments directly from
the client's account held by an independent custodian. Clients have the option to provide
written limited authorization to Strategic or its designated service provider, Focus Partners
Advisor Solutions, to withdraw fees from the account. Clients will receive custodial
statements showing the advisory fees debited from their account(s).
A client agreement may be canceled at any time, by either party, for any reason upon
receipt of 30 days written notice. Upon termination of any account, any prepaid, unearned
fees will be promptly refunded. In Illinois, unless a client has received the firm’s disclosure
brochure at least 48 hours prior to signing the investment advisory contract, the
investment advisory contract may be terminated by the client within five (5) business days
of signing the contract without incurring any advisory fees.
Strategic’s fees are exclusive of brokerage commissions, transaction fees, and other related
costs and expenses which shall be incurred by the client. Clients will incur certain charges
imposed by custodians, brokers, third party investment and other third parties such as fees
charged by managers, custodial fees, odd-lot differentials, transfer taxes, wire transfer and
electronic fund fees, and other fees and taxes on brokerage accounts and securities
transactions. Mutual funds and exchange traded funds also charge internal management
fees, which are disclosed in a fund’s prospectus. These fees will generally include a
management fee and other fund expenses. All fees paid to Strategic for investment advisory
services are separate and distinct from the fees and expenses charged by mutual funds and
ETFs to their shareholders.
Such charges, fees and commissions are exclusive of and in addition to Strategic’s fee, and
Strategic shall not receive any portion of these commissions, fees, and costs.
Advisory Fees
Investment Management Services:
The annual fee for investment management services will be charged as a percentage of
assets under management, according to the schedule below:
Assets under management Annual Fee* (%)
Up to $1,000,000 1.00%
$1,000,001 - $2,000,000 0.90%
$2,000,001 - $3,000,000 0.80%
$3,000,001 - $4,000,000 0.70%
$4,000,001 - $5,000,000 0.60%
$5,000,001 - $6,000,000 0.50%
$6,000,001 or greater 0.40%
*Total Fixed Income Accounts (100% fixed income) are billed at 67% of the above fee
schedule rates. Employee Benefit Retirement Plan Services are billed at 75% of the above
fee schedule rates.
In 2017 and prior years, Strategic followed a separate fee schedule, which remains in effect
with clients who signed agreements with Strategic during such period and who have not
agreed to an amended advisory fee schedule.
All accounts for members of the client’s family (husband, wife and dependent children) or
related businesses are assessed fees based on the total balance of all accounts.
Employee Benefit Retirement Plan Services:
The annual fee for plan services will be charged as a percentage of assets within the plan.
Typically, the annual fee will be 75 percent of Strategic’ s stated portfolio management fees
described above. The fee billing will be similarly calculated as well.
The fees for retirement plans engaging both Strategic and Focus Partners Advisor Solutions
are as follows:
Assets Under Focus Partners Strategic Total Fee
Advisement Advisor Solutions Annual Fee
Annual Fee
On the first $1,000,000 0.23% 0.52% 0.75%
On the next 0.20% 0.47% 0.67%
$1,000,001-$2,000,000
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