Item 5: Fees and Compensation
The specific manner in which fees are charged by TC is established in a written
agreement with the client. TC generally bills its investment management fees
quarterly in advance, based on the average daily balance of the assets under
management during the prior quarter, except for institutional accounts which are
generally billed quarterly in arrears based on the prior quarter-end market value.
401(k) plan accounts are generally billed in this manner. Clients ordinarily
authorize TC to debit fees directly from their account(s). Accounts initiated during
a calendar quarter will be charged a prorated fee based on the remaining
calendar days in the billing period. Upon termination of an account, any earned,
unpaid fees will be due and payable, and any prepaid, unearned fees will be
refunded based on the remaining calendar days in the billing period. Terminating
clients should contact their advisor regarding any refunds due.
TC’s “standard” fee schedule (that is, the schedule used for the majority of its
clients) is set forth below. Other fee schedules will apply under certain
circumstances. TC does not offer a “wrap fee” program; the schedule sets forth
the standard amount for TC’s services.
Market Value of Client Asset Annual Fee Rate (%)
First $1,500,000 1.25%
Next $1,500,001 - $3,000,000 1.00%
Next $3,000,001 - $5,000,000 0.90%
Next $5,000,001 - $10,000,000 0.80%
Next $10,000,001 - $20,000,000 0.70%
Next $20,000,001 - $50,000,000 0.60%
Next $50,000,001 - $100,000,000 0.55%
Over $100,000,001 Negotiable
Additional Account Types Annual Fee Rate (%)
ERISA Accounts (at plan sponsor level only)
Market Value of Plan Assets (AUM
Less than $5,000,000 0.50%
$5,000,000 - $10,000,000 0.35%
$10,000,001 - $20,000,000 0.30%
Over $20,000,000 0.25%
529 Accounts 0.50%
Public Charities/501(c) (3) and Institutional Accounts 0.50%
Client Directed Accounts 0.20%
Managed Individual Municipal Bond Only Accounts 0.35%
Blended Fixed Income Accounts 0.75%
Investment Grade Taxable Fixed Income Only Accounts 0.50%
• $3,750 minimum annual household fee.
• Telemus account management fees do not include, where applicable,
platform fees, sub-advisor fees, custodian fees, and any transaction fees
charged by custodians.
• Fees generally include financial, life and retirement planning services as
needed; however, exceptions may apply at TC’s sole discretion.
Fees are generally charged on cash and cash equivalents held in clients’
accounts. However, exceptions are made subject to negotiation depending on
the level of the client’s cash balances. Fees are not assessed on account margin
balances or on accrued but unpaid interest.
For certain clients, we charge an advisory fee for services provided to the held-
away accounts mentioned above in Item 4, just as we do with client accounts
held at our primary custodian(s). The specific fee schedule charged by us is
provided in the client’s investment advisory agreement with us.
Advisory fees are waived or reduced for TC’s employees and family members.
For the Family Office Services described in Item 4 above, Telemus charges fees
which are based on an agreed upon hourly rate and the scope and complexity of
the services to be provided.
For the Corporate Executive Services described in Item 4 above, Telemus
charges a flat annual consulting fee based on the complexity of the services to
be provided, including the amount of time and travel involved. The fee typically is
billed either quarterly or semi-annually based on its agreement with the client.
All fees charged by TC are subject to negotiation. TC, in its sole discretion and
based on particular client circumstances, will waive its minimum fee and/or
charge a lesser investment advisory fee, including for employees and their family
members. Factors considered include the following: complexity; client investment
policy/guidelines/restrictions; account size including future additional assets;
asset mix; historical relationship; anticipated future earning capacity; meeting and
reporting requirements; travel and related expenses; and sub-advisory
arrangements. The specific manner in which fees are charged is established in a
written agreement with the client.
Envestnet Fees
Envestnet receives fees for its advisory and administrative services. For its UMA
program, clients are charged a tiered platform fee ranging from 11 basis points
(0.11%) to 19 basis points (0.19%) depending on the assets under management.
For its SMA Program, Envestnet charges clients a tiered platform fee ranging
from 8 basis points (0.08%) to 14 basis points (0.14%) depending on the assets
under management. Clients will also pay an additional manager fee for each
manager model used ranging from approximately 35 basis points (0.35%) to 60
basis points (0.60%) per model. These amounts, which clients pay to Envestnet,
are in addition to the fees clients pay to TC.
Brokerage Fees and other Expenses
Pershing PAS Program: For managed accounts custodied at Pershing through
its PAS program, there are no separate brokerage fees. There are also generally
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