Item 5: Fees and Compensation
A. Fee Schedule
Portfolio Management Fees
Total Assets Under Management Annual Fees
$0 - $500,000 2.00%
$500,001 - $1,000,000 1.80%
$1,000,001 - $3,000,000 1.50%
$3,000,001 - $5,000,000 1.20%
$5,000,001 – And Up 1.00%
The advisory fee is calculated using the value of the assets in the Account on the last
business day of the prior billing period.
These fees are generally negotiable and the final fee schedule is attached as Exhibit II of
the Investment Advisory Contract. Clients may terminate the agreement without penalty
for a full refund of VGL's fees within five business days of signing the Investment
Advisory Contract. Thereafter, clients may terminate the Investment Advisory Contract
generally with 30 days' written notice.
Performance-Based Fees for Portfolio Management
Accredited clients will pay an annual fee of 2.00% of assets under management along with
a 20.00% performance fee based on capital appreciation. If the client's portfolio rises in
value, the client will pay 20.00% on that increase in value, but if the portfolio drops in
value, the client will not incur a new performance fee until the portfolio reaches the last
highest value, adjusted for withdrawals and deposits, which is generally known as a “high
water mark.”
The high water mark will be the highest value of the client’s account on the last day of any
previous quarter, after accounting for the client’s deposits or withdrawals for each billing
period.
These fees are generally negotiable and the final fee schedule is attached as Exhibit II of
the Investment Advisory Contract. This service may be canceled with 30 days’ notice.
Clients must pay the prorated performance-based fees for the billing period in which they
terminate the Investment Advisory Contract up to and including the day of termination.
B. Payment of Fees
Payment of Portfolio Management Fees
Asset-based portfolio management fees are withdrawn directly from the client's accounts
with client's written authorization on a monthly basis. Fees are paid in advance.
Payment of Performance-Based Portfolio Management Fees
Performance-based portfolio management fees are withdrawn directly from the client's
accounts with client's written authorization on a monthly basis. Fees are paid in arrears.
C. Client Responsibility For Third Party Fees
Clients are responsible for the payment of all third party fees (i.e. custodian fees,
brokerage fees, mutual fund fees, transaction fees, etc.). Those fees are separate and
distinct from the fees and expenses charged by VGL. Please see Item 12 of this brochure
regarding broker-dealer/custodian.
D. Prepayment of Fees
VGL collects certain fees in advance and certain fees in arrears, as indicated above.
Refunds for fees paid in advance will be returned within fourteen days to the client via
check, or return deposit back into the client’s account.
For all asset-based fees paid in advance, the fee refunded will be equal to the balance of
the fees collected in advance minus the daily rate* times the number of days elapsed in
the billing period up to and including the day of termination. (*The daily rate is calculated
by dividing the annual asset-based fee rate by 365.)
E. Outside Compensation For the Sale of Securities to Clients
Olivier Robert Gillier is a registered representative of a broker-dealer and in this role,
accepts compensation for the sale of investment products to VGL clients.
1. This is a Conflict of Interest
Supervised persons may accept compensation for the sale of investment products,
including asset based sales charges or service fees from the sale of mutual funds to
VGL's clients. This presents a conflict of interest and gives the supervised person an
incentive to recommend products based on the compensation received rather than on
the client’s needs. When recommending the sale of investment products for which the
supervised persons receives compensation, VGL will document the conflict of interest
in the client file and inform the client of the conflict of interest.
2. Clients Have the Option to Purchase Recommended Products From
Other Brokers
Clients always have the option to purchase VGL recommended products through
other brokers or agents that are not affiliated with VGL.
3. Commissions are not VGL's primary source of compensation for
advisory services
Commissions are not VGL’s primary source of compensation for advisory services.
4. Advisory Fees in Addition to Commissions or Markups
Advisory fees that are charged to clients are reduced to offset the commissions or
markups on investment products recommended to clients.