Item 5 – Fees and Compensation
Clients pay advisory fees based on a percentage of assets under management, and in some
cases, may also pay performance fees. Advisory fees charged by TAM take into
consideration the following factors: (i) level of servicing, (ii) investment objective and
investment strategy, (iii) account size, (iv) type of investment securities, (v) additional
portfolios under management, (vi) terms of the agreement, and (vii) other factors. Actual
fees, minimum fees and minimum account sizes may be negotiated and may vary among
clients. Fees for special arrangements with specific clients to provide unique services may
be outside the ranges described below.
Registered Investment Company and other Fund Accounts. Fees are payable monthly in
arrears and are based on the average daily value of the net assets of the fund. The fee
arrangements for such funds are generally described in the funds’ prospectuses or other
offering documents. The annual fee for U.S. registered funds advised by TAM are set forth
in their public filings, which is 0.90%. Fees may reflect a commitment to waive fees or
reimburse a fund’s expenses where expenses exceed certain predetermined thresholds.
UCITS (Undertakings for Collective Investment in Transferable Securities). TAM serves
as investment manager to two UCITS funds, authorized in Ireland pursuant to the European
Communities (UCITS) Regulations. TAM may enter into agreements with UCITS
investors whereby investors may be offered terms and conditions that are different than or
more advantageous than terms offered in the funds’ offering documents.
Separate Accounts. Fees for separate accounts are individually negotiated. Fees are
typically payable quarterly in arrears or in advance and are based on account value. Clients
that pay fees in advance and terminate their account will receive a refund equal to the pro
rata portion of the fees paid in advance, based on the actual number of days remaining in
the quarter.
Clients may arrange to have their fees debited directly from their account subject to
applicable regulatory requirements. The annual fee rates for new separate accounts range
between 0.60% and 1.25%, subject to negotiation and depending on the factors described
above. Such fees include certain administrative services.
Wrap Fee Programs. Certain wrap program sponsors have engaged TAM to manage assets
as a program investment option for the sponsor’s wrap clients. With regard to wrap fee
program accounts, the all-inclusive wrap fee assessed by the program sponsor may exceed
the aggregate cost of the services provided if such services were negotiated and purchased
separately, depending on the level of the all-inclusive fee, the amount of trading activity in
a client’s account, the cost of brokerage commissions, and the value of any other services
rendered to the client. The fees paid by clients for investing in a wrap fee account are set
by the sponsor, and are generally disclosed in the sponsor’s contract established with each
client. The wrap account program sponsor then pays TAM a portion of the wrap fee.
For detailed information about the wrap fees charged by a specific wrap program sponsor,
clients can refer to the sponsor’s Form ADV Part 2A or to other materials provided by the
sponsor.
Portfolios. UMA Program Clients are responsible for evaluating whether the fee paid to
the UMA Program Sponsor exceeds the cost for the same services if such services were
provided separately. UMA Program Clients should consider the overall fees and the
services received to determine if the product is appropriate. Due to the structure of most
UMA programs, TAM does not provide the same level of client relationship services to
UMA Program Clients as it does to other clients. Each UMA Program Sponsor has their
own brochure which contains detailed information about its wrap fee program, including
the fee charged. Copies of each brochure are available from the UMA Program Sponsor
upon request. Each UMA Program Sponsor has retained TAM through a separate
investment advisory contract. Each UMA Program Sponsor pays TAM a portion of the
fees paid by its clients on a quarterly basis, generally in advance/arrears. In all cases, the
UMA Program Sponsor deducts the client's all-inclusive fee from the client's account and
then remits to TAM a portion of the sponsor's fee for TAM's investment management
services. Upon termination of TAM as the Program manager, any prepaid unearned fees
previously paid to TAM by the sponsor are refunded on a pro rata basis. Consistent with
the agreement, we provide an update to the model for any material changes in portfolio
holdings.
Additional Costs. In addition to paying an advisory fee, clients may pay brokerage
commissions, mark-ups, mark-downs, dealer spreads and/or other commission equivalents,
foreign currency exchange costs, custodian fees, and regulatory charges and other expenses
related to transactions effected for their accounts, except where such expenses are
specifically covered pursuant to a wrap agreement. TAM’s brokerage practices are
described below under “Item 12 – Brokerage Practices.” TAM clients bear other expenses
as described in their offering documents. To the extent assets in a separate account are
invested in a fund, such investment bears the expenses of the fund (including advisory fees)
in addition to the advisory fees paid to TAM.