Investment Management Fees

Assets under management (AUM) fee schedule

Investment management fees are based on the total value of assets managed by Elements 5. We do not take custody of client accounts and account balances for fee billing are determined by the custodian.

Elements 5 calculates fees by totaling the average daily balance of the accounts and applying the following tiered pricing structure:

• $5,000 flat fee for management of up to $500,000 in assets
• 0.85% for the next $500,000 (up to $1,000,000)
• 0.70% for the next $4,000,000 (up to $5,000,000)
• See the Elements 5 Brochure (Form ADV Part 2) for management of total assets over $5,000,000

Elements 5 charges a minimum annual fee of $5,000 for Investment Management services. Using a fee minimum allows Elements 5 to provide investment management services to smaller Portfolios. This fee covers the cost of preparing the Investment Policy Statement and access to certain modules of our financial planning platform.

Project-Based Hourly Fee

• $360 per hour

Elements 5 may accept projects requested by clients for an hourly fee rate. All projects will require an engagement letter setting forth a description of the services requested by the client and a good-faith estimate of the total cost. Projects do not include implementation or monitoring services typically provided as part of Financial Planning and Investment Management services.

The E5 Approach to Investment Management

Elements 5 is a full-time fiduciary to all its clients pursuant to the firm’s oath to adhere to Best Practices published by the Institute for the Fiduciary Standard, and as required by law, the Certified Financial Planner Board of Standards, and the Investments & Wealth Institute™ (formerly IMCA^®). We appreciate the importance of integrity and the value of trust to our clients, and we earn these qualities by getting to know our clients so we can provide them with the highest level of service. These qualities are also necessary to provide fiduciary-level advice and services. Elements 5 understands that unless the firm provides substantial value to its clients for the fees we charge, clients may choose cheaper alternatives.

Elements 5 gives customized advice and investment management solutions because we know that each client’s financial situation, values and objectives differ—two clients having similar financial positions but holding different values will rarely want the same advice. For this reason, we do not consider ourselves a competitor of Robo Advisors.

Most investors appreciate that there are costs associated with investing, like trade commissions, investment fund expenses, taxes and management fees. We try to minimize these costs for our clients. Other costs that clients might not appreciate include effects of inflation, time horizon and their behavioral biases. Managing these costs are equally important. An Investment Policy Statement is an important client document that helps Elements 5 manage these costs to a minimum.

All investment management clients have an Investment Policy Statement (IPS) that creates a framework protocol for Elements 5 to manage their investments. The IPS describes the long term goals, financial objectives and purpose for the client’s investment account(s) being managed, the permitted asset classes, asset allocation mix, any risk metrics, constraints on the portfolio, and special considerations and rebalancing strategy and rules. It also includes parameters for client risk tolerance, investment time horizon, tax considerations and liquidity requirements, and income needs and distribution requirements.

Elements 5 adheres to the Standards of Practice promulgated by the Investments & Wealth Institute™ (formerly IMCA^®). There are 5 basic components:

1. Due diligence/discovery process to determine the client’s current financial position, risk tolerance, goals and financial objectives, time horizon and tax status
2. Prepare an Investment Policy Statement (IPS) on behalf of the client to serve as a guidance document for managing the portfolio
3. Construct the investment portfolio and select investments in accordance with the IPS
4. Monitor and manage the portfolio, including rebalancing, tax management, and income distribution, in accordance with the IPS
5. Review the portfolio with the client at least annually and update client discovery and the IPS as necessary

What Clients Can Expect

Elements 5 strongly believes in use of the IPS to guide the management of the investment portfolio. Each client must complete an investment management profile and risk tolerance assessment to create the IPS. Once completed, the IPS is signed by the client to acknowledge that the policy contains the relevant information and guidance necessary for Elements 5 to manage the client’s assets. The IPS is not a legal document and therefore Elements 5 does not sign it. The following services are provided to investment management clients:

• Client education—investing and the investment process
• Assessment of net worth, cash flow, liquidity needs, debt load and risk capacity (financial ability to assume risk)
• Exploration of life goals and investment objectives
• Determination of risk tolerance (investment time frame and psychological ability to handle risk)
• Risk analysis of current portfolio
• Preparation of the Investment Policy Statement and sign-off by client
• Construction of the investment portfolio, monitoring the portfolio and rebalancing the portfolio in accordance with the IPS
• Periodic review with client

Clients will receive access to our online investment reporting software, which allows tracking of an entire investment portfolio including assets that might not be managed by Elements 5.