Item 5 Fees and Compensation
A. The client can determine to engage us to provide discretionary or non-
discretionary investment advisory services on a fee-only basis.
Investment Advisory Services
Our investment advisory fee generally is based upon a percentage of
the market value and type of assets placed under our management,
including cash and cash equivalents. Our annual investment advisory
fee rate is no higher than 1% of the market value of the assets placed
under our management, including cash and cash equivalents. For tax
exempt municipal bond assets, our annual investment advisory fee rate
is generally no higher than .50% of the market value of the municipal
bond assets placed under our management. Varying our fee rates by
asset class presents a potential conflict of interest and incentive for us
to allocate more assets to other asset classes, where our advisory fee
rates are higher, than to municipal bonds, where our advisory fee rates
are lower. However, we remain mindful that we have a fiduciary duty
to invest client assets in a manner consistent with the client’s best
interest.
Our fees are negotiable from the maximum rates set forth above. Our
fees will vary depending upon various objective and subjective factors,
including, but not limited to: the amount of assets to be managed;
account composition; the scope and complexity of the engagement; the
anticipated number of meetings and servicing needs; related accounts;
future earning capacity; anticipated future additional assets; the
professional(s) rendering the service(s); and the outcome of
negotiations with the client. As a result of these factors, similarly-
situated clients could pay different fees.
Private Investment Funds
The Series Funds that certain of our clients invest in do not pay
management fees to us; we instead charge our investment advisory fee
to our advisory clients based on the total amount of assets invested with
the Firm, including assets invested in the Series Funds. Please note that
we rely on valuations provided by the underlying investment managers
to value these investments, which values typically are provided on a
delayed basis and so could differ from actual current values. In
addition to our investment advisory fee, the Series Funds bear the fees
and expenses, including management and performance fees charged by
the third-party manager, of the underlying fund in which they are
invested.
The WJA Housing Bond Fund, LLC pays us a quarterly management
fee, payable in advance, of approximately 0.125%, totaling .50% per
year. We do not charge our advisory clients an additional fee for assets
invested in the WJA Housing Bond Fund.
The WJA Value Equity Fund, LLC pays us a quarterly management
fee, payable in advance, of approximately 0.25%, totaling 1% per year.
We do not charge our advisory clients an additional advisory fee for
assets invested in the WJA Value Equity Fund.
B. With regard to the payment of advisory fees, in most cases, we deduct
our advisory fees directly from the client’s custodial account in
accordance with the authorization the client has provided. In the
circumstance where we bill the client directly, payment is due upon
receipt of our invoice.
We generally deduct fees and bill clients quarterly in advance, based
upon the market value of the assets on the last business day of the
previous quarter.
C. In addition to our investment advisory fees, clients are responsible for
the fees and expenses associated with their investments. The
custodians who hold client assets and broker-dealers who execute
securities transactions charge fees and expenses, such as brokerage
commissions, transaction fees and custodial fees. Fees and expenses
also may include account opening, maintenance, transfer, termination,
wire transfer, retirement plan, trust fees, and all such applicable third
party fees, deferred sales charges, odd lot differentials, transfer taxes,
wire transfer and electronic fund fees, and other fees and taxes on
brokerage accounts and securities transactions. Certain custodian
broker-dealers charge “trade away” fees for securities transactions
executed at broker-dealers other than the custodian.
Third-party fees and expenses that clients are responsible for include
the fees and expenses of third-party investment managers. Clients will
incur, relative to any mutual fund and exchange-traded fund purchases,
charges imposed at the fund level, such as management fees and other
fund expenses, that are described in the prospectus for the relevant
fund. Clients are encouraged to read each such brochure and
prospectus.
D. Our annual investment advisory fee shall be prorated and paid quarterly
based upon the market value of the assets on the last business day of
the previous quarter. We generally require an aggregate minimum
account asset level of $1,000,000 for investment management services.
We, in our sole discretion, may reduce or waive its minimum account
asset level requirement or charge a different investment management
fee based upon certain criteria, such as anticipated future earning
capacity, anticipated future additional assets, dollar amount of assets to
be managed, related accounts, account composition, or negotiations
with the client.
The Investment Management Agreement between us and the client will
continue in effect until terminated by either party by written notice in
accordance with the terms of the Investment Management Agreement.
Upon termination, we shall refund the pro-rated portion of any
advanced advisory fee paid based upon the number of days remaining
...