The final page of any client’s Quarterly Report is the Management Fee Report. This report summarizes the fee our clients pay for the services B&C Financial Advisors provides. We include this in all client reports, so you understand exactly how much you are paying.
The report is organized in two parts:
1. The top section includes detailed account level billing information
2. The fee schedule pertains to the portfolio (or account in some cases)
We will address the bottom section first, as it is relatively simple. This section is a description of the fee schedule we have agreed upon in the B&C Investment Advisory Agreement you sign when you first become a client. We employ a “flat tiered” billing schedule; this means that over a certain amount of assets under management we lower the fee for the ENTIRE account – not just for the amount over the threshold like some firms.
The top section of this report details the specific fees billed for clients’ accounts. The account number and name are listed, followed by the billing account number. Some clients have specified they would like a specific account (often their IRA) used to pay all their management fees – this is listed in the third column under “Billing Acct.”
B&C Financial Advisors bills all clients’ management fees in advance for the quarter ahead. The bill for the current quarter (ending June 30th, 2016) is for the next quarter (July, August, and September). The calculation is done on the total billable assets under management for the specified account. The total market value and billed market value are displayed in the next two columns. The values may differ depending on specific assets being marked as “non-billable.” The fee is calculated for this client by multiplying the billable market value by the appropriate annual fee schedule (from the bottom section) and then dividing it by four. In this sample report, the calculation for the account ending in 761 is:
$36,510 x (1.50 % / 4) = $136.91
There are three additional columns not mentioned above, and those are Cash Flow, Date of Flow, and Adjustments. The first two relate to funds transferred into or out of a specific account in between quarterly bills. If the flow amount is greater than $25,000, then we will bill (or credit) the account for the cash flow. The Adjustments column relates to other miscellaneous adjustments we may make and whose details will be displayed below the “Annual Fee Schedule” section.
B&C Financial Advisors is committed to dealing transparently with all of our clients. The best way we can do this is to provide you with a quarterly bill detailing exactly what you are paying in as much detail as possible. Our fee schedule is posted to our website (https://www.bandcfinancial.com) as well as the Disclosure Brochure we submit to the SEC annually. We urge all of our clients to review their bills and, if they have any questions or concerns, give us a call at the office at 904-273-9850 or e-mail us at email@example.com.