Item 5: Fees and Compensation
Clients are charged for Olympic Wealth Management’s investment advisory services based on an annualized percentage of the aggregate market value of related-party (household) investment assets placed under Olympic’s supervision.
Following is Olympic’s current fee schedule for Investment Advisory Services. A client’s specific annual fee arrangement will be described in a written Statement of Investment Selection (‘SIS’) entered into between Adviser and the client.
| Aggregate Household Asset Value |
Advisor Fee (annualized) |
| First $500,000 |
1.00% |
| Next $500,000 |
0.95% |
| Next $1 million |
0.85% |
| Next $3 million |
0.70% |
| Amounts above $5 million |
0.50% |
Clients should note that similar services may be available from other investment advisory firms for fees which are lower than, equal to, or higher than the fees charged by Olympic. Adviser may revise its fee schedule upon providing clients 30 days written notice and receiving written approval by the client.
The annual fee for Adviser’s services shall be paid quarterly in advance, based upon the market value of all allocated assets including cash held in the account at the end of the previous calendar quarter. If the Advisory Agreement does not span the entire quarterly billing period, the fee will be pro-rated based on the number of days the account is open and funded during the partial billing period.
Fees are deducted directly from the client’s account by the platform manager, Envestnet; direct billing to the client is not offered. Schwab, the account custodian, sends statements to clients at least quarterly, showing all disbursements from the account(s) including the amount of the Advisory fee deducted from the account(s).
If the Advisory agreement is terminated prior to the end of a calendar quarter, or if funds are withdrawn on which fees have been paid in advance, any unearned portion of those fees will be refunded to the client on a pro-rata basis. The dollar amount of unearned fees to be refunded is determined as follows:
| Number of days remaining in the current quarter |
|
| _______________________________________________________________ |
multiplied by amount of fees paid in advance = $ refund |
| Total number of days in the current quarter |
|
As referenced in Item 3 on page 5, Envestnet calculates the fees which are paid by Olympics’ clients each quarter. Envestnet then directs portions of the fees to itself, the portfolio manager(s), and Olympic Wealth Management for services rendered by each.
In its role as custodian, Schwab may separately charge various account related fees including, but not limited to, commissions, transaction fees, or asset-based fees for effecting certain transactions. For example, commissions may be charged for individual equity and fixed income securities transactions, and transaction fees may be charged to buy or sell mutual funds. Olympic Wealth Management does not receive commission or mutual fund service fees (12-b1 fees) as forms of compensation for its investment advisory services.
As Platform Manager, Envestnet will charge fees that are separate from and in addition to the fees charged by Olympic. For example, Envestnet charges a Sponsor Fee which can range from 0.10% up to 0.90%, depending on the types of investments owned in the client’s accounts. Olympic’s advisory fee is disclosed on the previous page. Please refer to Schwab’s and Envestnet’s disclosure and account documents for information about their respective charges.
Notice regarding mutual fund and ETF fees
As stated previously, third-party portfolio managers offering mutual funds and exchange-traded funds (ETFs) pass their internal transaction and execution costs on to the shareholders of their funds. Such investment companies also pass the cost of compensating their management/research personnel, as well as the cost of other internal administrative services, on to the shareholder (collectively known as an ‘expense ratio.’) Mutual fund and ETF expense ratios can range from as low as 0.10% to as much as 1.00% or more, depending in part on the asset class of the fund and whether it’s a passive or an active strategy. (Expense ratios on passive strategies tend to be lower than expenses on actively managed strategies.)
In addition, some third-party portfolio managers pay 12b-1 service fees, distribution fees, recordkeeping fees, and/or shareholder accounting fees to custodians and broker-dealers which offer such funds to their clients. These fees reduce the net asset value of mutual fund/ETF shares and are thus indirectly borne by fund shareholders, including clients of Olympic who may own such investments. Olympic does not receive 12b-1 service fees, distribution fees, recordkeeping fees, or shareholder accounting fees as compensation for its investment advisory services.
Olympic Wealth Management will deliver all materials required by this section to an advisory client or prospective advisory client (i) not less than forty-eight hours prior to entering into any investment advisory agreement with such client or prospective client, or (ii) at the time of entering into any such agreement if the advisory client has a right to terminate the contract without penalty within five business days after entering into the agreement. (This right is provided for in Olympic’s Investment Advisory Agreement.)
