Item 5 Fees and Compensation
DWM offers its services on a fee basis, which include fixed fees, as well as fees based upon assets
under management ("AUM") depending on the particular services engagement with each client. All
Darrow Money Management clients will, at a minimum, incur fees based on AUM. For fixed fee
engagements, depending on the expected length of the project and scope, fees may be due in
advance or paid quarterly in advance. If billed in advance of the services provided, we will not require
payment of a fee more than six months in advance that is more than $1,200.
Advisory, Consulting, and Support Service Fees ("ACS")
• Financial Modeling Service: Fees are project based and paid in advance upon executing the
service agreement. Fees range from $5,000 - $10,000.
• Divorce Consulting Service: Fees are project based and may be paid in advance upon
executing the service agreement or be paid in quarterly installments, depending on the fee and
scope of the services provided. Fees range from $10,000 - $50,000.
• Estate Settlement Service: Fees are project based and may be paid in advance upon
executing the service agreement or be paid in quarterly installments, depending on the fee and
scope of the services provided. Fees range from $10,000 - $50,000.
• Discovery Support Service: Fees are project based and may be paid in advance upon
executing the service agreement or be paid in quarterly installments, depending on the fee and
scope of services provided. Fees range from $5,000 - $50,000.
DWM may, at its discretion, provide a range of ACS services. These services are generally only
offered to its clients. The project-based fees for such services will vary depending on the service
selected, expected length of the project, scope of the services engaged, the professional rendering the
services, client relationship and the firm's capacity to take on such projects. These fees may be
reduced or waived at the firm's discretion. Prior to engaging DWM to provide ACS services, the client
is required to enter into a written agreement with DWM setting forth the terms and conditions of the
engagement.
Retirement Plan and Pension Consulting Services
DWM's advisory fees for these customized services will be negotiated with the plan sponsor or named
fiduciary on a case-by-case basis. In general, DWM will charge a negotiated fee, billed in arrears, and
based on the value of the plan in its entirety as of the end of the previous quarter.
You may terminate the pension consulting services agreement upon Written notice to our firm. You will
incur a pro rata charge for services rendered prior to the termination of the agreement, which means
you will incur advisory fees only in proportion to the number of days in the quarter for which you are a
client. If you have pre-paid advisory fees that we have not yet earned, you will receive a prorated
refund of those fees.
Investment Management Fee
Each quarter, you will be billed in advance for that quarter's services: the greater of your asset-based
fee (typically between .70% and 1.00% for portfolios containing equity securities or .50% for portfolios
containing only fixed income securities) or a prorated portion of our minimum annual fee of $15,000.
Your asset-based annual fee will depend upon the market value of the assets under management and
the type of investment management services to be rendered. As discussed in Item 7 (below), DWM
generally imposes an annual account minimum fee of $15,000, billed quarterly for starting and
maintaining an investment management relationship with the Firm. Such fees may be reduced or
waived by DWM in its sole and absolute discretion. In limited circumstances, DWM may alter its billing
arrangement for clients (i.e., bill in arrears instead of advance). This is agreed upon directly with the
client.
DWM generally recommends Charles Schwab to custody its clients assets, however, not all clients
maintain assets at this custodian. Due to client portfolios consisting of multiple accounts from
sometimes multiple custodians (e.g. 401K plan participant accounts or outside managed assets), the
client's portfolio value may be determined by more than one independent third-party custodian and/or
vendor. For example, should DWM affect a trade in the same fixed income security through more than
one custodian the pricing services of those custodians may not match, therefore, DWM defaults to the
pricing services from a third-party vendor for fee calculation. This can create a difference in your billed
account value. Additionally, the custodian generally does not include accrued interest on the clients
custodial statement, while we consider accrued interest as part of the securities value, since liquidation
would include the value of accrued interest. As such, we bill on the accrued interest which can cause
the billable value of the account to differ from the client's custodial statement impacting both the
performance and fee calculations on the account. Clients are encouraged to review their custodian's
account statement on a regular basis for comparison to our account valuations.
DWM, in its sole discretion, may negotiate to charge a lesser management fee based upon certain
criteria (i.e., anticipated future earning capacity, anticipated future additional assets, dollar amount of
assets to be managed, related accounts, account composition, pre-existing client, account retention,
etc.)
To enable clients to benefit from the lowest possible fee rate, at DWM's discretion, immediate family
member accounts and/or business related accounts may be aggregated for the purpose of determining
fees (e.g., profit sharing account and immediate family members and/or pension or personal trusts
associated with those individuals whose designated fee schedules are the same (e.g., equity or fixed
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