Annual fees for LIMC investment services are based on the market value of assets under management as follows:
1.00% of first $500,000 under management
0.75% of next $500,000
0.50% of assets over $1,000,000
Unless otherwise waived or reduced, the minimum annual fee per client is $5,000. This implies a minimum account size of $500,000 on a standard fee basis. All fees are payable quarterly in advance based on the market value of the managed assets at the beginning of the quarter. Either party may terminate the advisory relationship by providing written notice, which shall be effective upon receipt. Fees will be prorated to the date of termination and an appropriate refund made. Most clients will determine the custodian used and may determine asset type allocation. Cash invested in various short-term interest bearing instruments or money market funds available at the custodian may involve fee charges by the custodian or the funds’ advisors, which may not be disclosed on the custodian’s statement. Any such charges by the custodian or its agents would be in addition to fees paid to the applicant.
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From April 1, 2002 until December 31, 2006 LIMC participated in an agreement with Charles Schwab & Co., Inc., an independent and unaffiliated broker-dealer (“Schwab”), to participate in Schwab Advisor Networkä (the “Service”), an advisor referral service designed to help clients locate an independent investment advisor. Prior to April 2002 LIMC participated in a similar program named the Schwab AdvisorSource program. Under these agreements LIMC agreed to pay Schwab a fee for participation (the "Participation Fee") in the referral service. The fee covers all referrals made to LIMC by Schwab, and could be increased, decreased or waived by Schwab from time to time. LIMC agreed not to charge Schwab referral clients differently than similar non-referral clients. LIMC participation in the Service may raise potential conflicts of interest. Although not required by the Service, LIMC is likely to execute transactions for advisory clients with Schwab.
LIMC pays Schwab a Participation Fee on all referred clients' accounts that are maintained in custody at Schwab and a Non-Schwab Custody Fee on all accounts that are maintained at, or transferred to, another custodian. The Participation Fee paid by LIMC is a percentage of the fees the client owes to LIMC or a percentage of the value of the assets in the client's account, subject to a minimum Participation Fee. LIMC pays Schwab the Participation Fee for so long as the referred client's account remains in custody at Schwab. The Participation Fee is paid by LIMC and not by the client. LIMC has agreed not to charge clients referred through the Service fees or costs greater than the fees or costs LIMC charges clients with similar portfolios who were not referred through the Service.
LIMC may enter into other referral programs where the referring entity is an unaffiliated broker-dealer. LIMC normal fees, when combined with the fees charged by the broker, may be higher or lower than the referral client might pay for the separate services.