Item 5. Fees and Compensation
Investment Supervisory Services
SWM is a strictly fee-based advisor working only to represent our clients. We do
not accept referral fees, commissions, kickbacks, trailing or trailer fees or any
other kind of compensation in exchange for purchasing, selling or recommending
investments in client accounts.
The annual fee for these services will be charged as a percentage of assets
under our management (AUM), according to the following schedule:
Assets Under Management ($) Annual Fee (%)
First $1 million 1.00%
Next $1 million 0.90%
Next $1 million 0.80%
Next $1 million 0.70%
$5 million to $10 million 0.60%
Above $10 million 0.50%
Above $50 million Negotiable
Occasionally, these services, or special services can be billed based on a
mutually-agreed fixed fees or pre-determined hourly fees.
Depending on the services provided each client, we will either invoice clients for
specialized services or directly debit their custodial accounts for portfolio
management fees in arrears at the end of each calendar month based upon the
value of the client's account at the end of that month.
Asset Valuation for Billing Purposes: Most client assets are publicly traded and are
easily priced within the custodian(s) and Advisor’s pricing systems. Private Equity
Investments may not have regular daily or monthly pricing. SWM does not
independently value these investments. SWM will carry the investment at the last
valuation provided to the client by the Manager or Administrator for the Private
Investment. Some development projects will be carried at cost until completion,
occupancy permit and appraisal or sale. For private investments, valuations will only
be changed, for billing purposes, at the end of the month in which a change in value
(up or down) is received.
SWM Smart Strategies
The fee for SWM Smart Strategies separately managed account service is not
included in consulting fees and will be charged as additional fees as a
percentage of each client’s assets under our separate account management in
the SWM Smart Strategies according to the following schedule:
Assets Under Management ($) SWM Smart Strategies Annual Fee (%)
First 20 million 1.00%
Next 20 million .90%
Next 20 million .80%
Next 20 million .60%
Next 20 million .50%
Over $100 million Negotiable
Some charter clients in the SWM SMART Strategies may have a different fee
structure.
We will directly debit clients’ SWM Smart Strategies custodial accounts for
account management fees, in arrears, at the end of each calendar month based
upon the value of the client’s SWM Smart Strategies separately managed
account at the end of that month. Any and all sub-advisor fees for SWM Smart
Strategies accounts will be contracted and paid by SWM.
Consulting Services
Depending on Assets Under Management, clients participating in our full fee
Investment Supervisory services will normally receive most regular consulting
services as needed, at no extra charge. However, special projects with a certain
level of complexity and/or significant extra time, expenses or travel commitment
may be subject to additional flat or hourly fees. In such cases, clients will be
advised in advance of any additional charges that will be incurred and must
consent to such charges in writing prior to the commencement of any such work.
For any ad-hoc consulting or special projects, clients who do not select our full-
service Investment Supervisory services, will be charged an hourly rate ranging
from $99.50 per hour for clerical support to $425.00 per hour for senior
consultants, plus expenses.
The length of time it will take us to complete a consulting project will depend on
the nature and complexity of the individual client's circumstances and the details
and objectives of the project. An estimate for total hours and anticipated
expenses will be determined at the start of the special project consulting
relationship and approved in advance by the client in writing.
Fees are due and payable upon completion of the consulting service or, on
longer projects, upon interim billings in arrears as agreed in advance, by client in
writing. If there are significant up-front expenses, we may request an expense
retainer to continue work beyond completion of our fact-finding session and fee
and expense estimates.
Fees in General
Fees and account minimums for all services may be negotiable based upon
certain criteria (i.e. anticipated future earning/ investing capacity, anticipated
future additional assets, dollar amount of assets to be managed, related
accounts, account composition, nature of services desired, ease or complexity of
account management, etc.).
We may agree to group certain related client accounts for the purposes of
determining the total account billing size and/or annualized fee structure.
Certain legacy client agreements may be governed by fee schedules different
from those listed above.
Under no circumstances will we accept fees or expense advances in excess of
$1,200 more than six months in advance of services or investment advisory
services being provided
Other Costs
SWM consulting fees or consulting expenses do not include a client’s trust
company account fees, brokerage account fees or commissions, mutual fund,
ETF, MLP or REIT fees or expenses or separate account manager fees or
expenses, any other fees expressly incurred from custody, banking, brokerage,
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