The following is a full disclosure of the fees you should expect to pay annually for your investments as a percentage of the portfolio value. Fee rates are not negotiable.
|Annual Advisory Fees1,2||0.91%||0.83%||0.69%|
1 Annual Advisory Fees: QAM is a fee only investment advisor. You pay QAM only a percentage of assets, not per transaction. Your annual fees are calculated according to the following graded schedule, and are charged quarterly:
|Portfolio Value||Annual Management Fee|
|Up to $2,000,000||0.96%|
|$2,000,000 to $10,000,000||0.80%|
|Funds in Excess of $10,000,000||0.60%|
For example, the annual advisory fees of 0.83% for a portfolio with value $10,000,000, are calculated as follows: (0.96% x $2,000,000 + 0.80% x $8,000,000) / $10,000,000 = ($19,200 + $64,000) / $10,000,000 = 0.832%
2 In addition to the advisory fees, you are charged directly by the broker for transactions. QAM focuses on using brokers with competitive transaction costs and minimizes transactions. This results in the transaction costs for rebalancing the portfolios being almost negligible as a percentage of the portfolio. For example, TD Ameritrade charges $9.99 per transaction, making a full annual rebalance cost under $100. Note: these fees can vary depending on market fluctuations, affecting rebalancing needs.
The above is a full summary of costs you will see deducted for your investments. There are a few more costs that are already reflected in the mutual fund price: (1) Annual Mutual Fund Fees: 0.20%-0.57%, are the total effective fees charged by the mutual funds in the various portfolios, calculated as the weighted average expense ratio of each fund. The different values depend on the allocation to the portfolios. There are no other mutual fund fees (no-load, no 12-1b expenses); (2) trading spread: the difference between the buying and selling price of a stock, charged by the person performing the trade, and can affect the fund performance; (3) market impact: the change in the stock price during a large trade, increasing the cost of buying and decreasing the sales proceeds. Quality Asset Management reduces the impact of these fees by choosing mutual funds that trade infrequently in order to maintain the intended asset classes and to handle deposits and withdrawals. A more active reduction is achieved by performing negotiated trades of large blocks of stocks.