Item 5: Fees and Compensation
A. Advisory Fees and Compensation for Research Services
We generally receive negotiated fees (“Fees”) for our Research Services. There is no basic fee schedule
for the Research Services. The Fee may or may not be established under a written agreement. In lieu
of Fees, some clients may pay for the Research Services by directing brokerage trades to Instinet, LLC
(“Instinet”). Some clients may pay for Research Reports through a combination of agreed upon Fee
payments and commission payments to WRS.
At the client’s discretion, compensation for our Research Services can be determined by using
a ‘broker vote’ process or by analyzing data comprised of the research-related products and
services provided by WRA. WRA does not manage client assets in connection with the
provision of Research Services and, therefore, does not deduct fees from clients’ assets. Clients
are provided with an invoice when requested or deemed necessary.
For Research Services, no other fees or expenses are charged to clients unless we are required
to collect or pay any sales, gross receipts, excise or use taxes that are levied on us for providing
Research Services. If this is the case, then the client will be obligated to pay or reimburse us
for such taxes.
In accordance with contractual terms, if a client terminates their contract prior to the end of the
billing period, any prepaid fees will be refunded on a pro rata basis after the termination.
B. Fees Charged to Private Funds
WRA receives compensation for advisory, and management services provided to Private Funds.
Such compensation may include a management fee based on committed capital, invested capital,
net asset value or another agreed-upon metric, as well as reimbursement of expenses incurred in
connection with the organization, operation and investment activities of the Private Fund. In
certain cases, WRA or its affiliates may also receive performance-based compensation, such as
carried interest or incentive allocations, subject to applicable law.
Fees for Private Fund Services are deducted from the assets of the applicable Private Fund.
Fees and expenses charged to a Private Fund are borne by the fund and indirectly by its investors
and may be payable regardless of the investment performance of the fund. The specific fees and
expenses applicable to a Private Fund are described in that fund’s governing and offering
documents.
Wolfe Research Advisors, LLC Form ADV Part 2A
C. Additional Compensation and Conflicts of Interest
The trading ideas in our Research Reports along with Research Analyst communications can prompt
or contribute to trading decisions by our clients, who maintain total and complete control over their
investment processes and decisions. WR Securities LLC (“WRS”), our affiliated broker-dealer, does not
provide trading, trade execution or brokerage services to WRS or WRA clients receiving Research
Services. The advisory relationship WRA has with its clients receiving Research Services is strictly
limited to the provision of Research Services. Any trades, transactions or orders that may be
executed, routed, or otherwise processed on behalf of our clients will be handled by other
broker dealers at the discretion of the client.
Both WRA and WRS refer clients to other broker dealers for trade execution. WRS has revenue
sharing agreements in place with several broker dealers.
WRS and Instinet have a revenue sharing agreement in place regarding WRS referrals of its
institutional customers. When WRS refers a Client to Instinet for trading purposes, WRS
receives a revenue share from Instinet.
WRS provides baskets comprised of equity securities that can be structured as various financial
products to be entered into or sold to Clients (each a “WRS Basket Strategy”), including equity
swap transactions which may be based upon or otherwise utilize a WRS Basket Strategy (“Swap
Transactions”). With respect to any WRS Basket Strategy, WRS will from time to time refer Clients
that are interested in entering into Swap Transaction(s) to select third party broker-dealers or
security-based swap dealers (“Select Third Party Dealers”) with the capacity and authority to enter
into such Swap Transactions with the Client.
Select Third Party Dealers Include:
Bank of America, N.A. and Merrill Lynch International (collectively BofA Entities);
BNP Paribas Securities Corp. (BNPPSC) or its parent company BNP Paribas (BNPP);
Goldman Sachs & Co. LLC (GS);
Instinet, LLC;
J.P. Morgan Securities LLC (J.P. Morgan) or its affiliates JPMorgan Chase Bank, N.A. and
J.P. Morgan Securities plc (collectively J.P. Morgan Entities);
Morgan Stanley & Co. LLC (MS);
Nomura Securities International, Inc., or Nomura Global Financial Products Inc., (NGFP)
or to any of NGFP’s foreign affiliates for whom NGFP acts as a service provider;
Wolfe Research Advisors, LLC Form ADV Part 2A
StoneX Financial Inc.
Upon referral, the Select Third Party Dealers, in their sole discretion, will decide whether or not to
offer, negotiate and execute the respective Swap Transaction with the Client. Select Third Party
Dealers shall charge each client brokerage or execution commissions within standard industry
dealings. In consideration for any Swap Transaction entered into between the Client and the
Select Broker Dealer, the Select Third Party Dealer pays WRS a percentage of the amount for the
execution of the Swap Transaction charged by the Select Third Party Dealer to the client and a
portion of the financing revenue received. The fee will vary based on the Swap Transaction, the
Client, and the Select Third Party Dealer. Moreover, the fee WRS collects will vary based on fee
and revenue share.
Any conflicts of interest arising from broker dealer referrals are strongly mitigated by our Client’s
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