Item 5: Fees and Compensation
Wealthstream offers its services on a fee basis, which may include hourly and/or fixed fees, as
well as fees based upon assets under management.
Financial Planning Fees
Wealthstream charges a fixed fee and/or hourly fee for standalone financial planning services.
These fees are negotiable, but generally range from $12,000 to $25,000 on a fixed fee basis
and/or from $350 to $750 on an hourly rate basis, depending upon the level and scope of the
services and the professional engaged to render the services. If the client engages
Wealthstream for additional investment advisory services, Wealthstream may offset all or a
portion of its fees for those services based upon the amount paid for the financial planning
services.
Generally, Wealthstream requires half of the payment of the estimated hourly or fixed fee upon
execution of the written agreement.
Investment Management and Wealth Management Fee
Wealthstream provides investment and wealth management services for an annual fee based
upon a percentage of the market value of the assets being managed by Wealthstream.
Wealthstream’s annual fee is exclusive of, and in addition to brokerage commissions,
transaction fees, and other related costs and expenses which are incurred by the client.
Wealthstream does not, however, receive any portion of these commissions, fees, and costs.
Wealthstream’s annual fee is prorated and charged quarterly. Fees can be charged in advance
based upon the market value of the assets being managed by Wealthstream on the last day of
the previous quarter or in arrears based upon the average daily market value. The annual fee
varies (between 0.20% and 1.25%) depending upon the market value of the assets under
management and the type of investment or wealth management services to be rendered.
Our standard tiered fee schedule is as follows:
From To Annual Fee
$0 $2,000,000 1.00%
$2,000,001 $5,000,000 0.75%
$5,000,001 $10,000,000 0.50%
Above $10,000,000 --- 0.35%
For example, if a client has $3,000,000 in assets under management, they will pay 1.00% on the
first $2,000,000 and 0.75% on the next million in assets under management resulting in a blended
fee of 0.916% on the total assets under management.
Administrative Fees
Wealthstream provides administrative services to clients who hold security positions that are not
included in model portfolios, such as concentrated stock positions, treasuries and cash
equivalents needed for short term liquidity needs. The fee for these services is 0.10%.
Retirement Plan Fees
Wealthstream provides services to qualified retirement plans and their fiduciaries for an annual
fee based upon either a percentage of the investable assets in the plan or a fixed fee. The
annual fee based on a percentage of investible assets is based on the market value of the
investible assets in the plan at the end of each quarter.
Cash Balances
Some of your assets may be held as cash and remain uninvested. Holding a portion of your
assets in cash and cash alternatives, i.e., money market fund shares, may be based on your
desire to have an allocation to cash as an asset class, to support a phased market entrance
strategy, to facilitate transaction execution, to have available funds for withdrawal needs or to
pay fees or to provide for asset protection during periods of volatile market conditions. Your
cash and cash equivalents will be subject to our investment advisory fees unless otherwise
agreed upon. You may experience negative performance on the cash portion of your portfolio if
the investment advisory fees charged are higher than the returns you receive from your cash.
Retirement Plan Rollover Recommendations
As part of our investment advisory services to our clients, we may recommend that clients roll
assets from their employer’s retirement plan, such as a 401(k), 457, or ERISA 403(b) account
(collectively, a “Plan Account”), to an individual retirement account, such as a SIMPLE IRA, SEP
IRA, Traditional IRA, or Roth IRA (collectively, an “IRA Account”) that we will advise on the
client’s behalf. We may also recommend rollovers from IRA Accounts to Plan Accounts, from
Plan Accounts to Plan Accounts, and from IRA Accounts to IRA Accounts.
If the client elects to roll the assets to an IRA that is subject to our advisement, we will charge
the client an asset-based fee as set forth in the advisory agreement the client executed with our
firm. This creates a conflict of interest because it creates a financial incentive for our firm to
recommend the rollover to the client (i.e., receipt of additional fee-based compensation).
Clients are under no obligation, contractually or otherwise, to complete the rollover. Moreover,
if clients do complete the rollover, clients are under no obligation to have the assets in an IRA
advised on by our firm. Due to the foregoing conflict of interest, when we make rollover
recommendations, we operate under a special rule that requires us to act in our clients’ best
interests and not put our interests ahead of our clients’.
Under this special rule’s provisions, we must:
• meet a professional standard of care when making investment recommendations (give
prudent advice);
• never put our financial interests ahead of our clients’ when making recommendations
(give loyal advice);
• avoid misleading statements about conflicts of interest, fees, and investments;
• follow policies and procedures designed to ensure that we give advice that is in our
clients’ best interests;
• charge no more than a reasonable fee for our services; and
• give clients basic information about conflicts of interest.
...