The Dispatch

Minimum Monthly Platform Fee FAQs

Why did you send the announcement of the minimum monthly Platform Fee to my clients for whom it does not apply?
SEC regulations are strict on this – when a fee schedule changes, clients must be informed even if at the present time the change does not impact them. The rationale is that it may impact them in the future and so we have an obligation to inform them of the change.

How exactly does this minimum fee work?
Each month we calculate our Platform Fee for an account, which is simply the average daily “Platform Billable Value” for the month multiplied by the Platform Fee Rate for that account. If that fee is less than $12.50, then the account will be billed $12.50.

What is “Platform Billable Value?”
The Freedom Advisors platform does not charge the Platform Fee on all account assets. The fee is not charged on cash outside managed models and does not charge on non-managed securities (in “Discretionary” portfolios). As advisors and clients contemplate the impact of the new minimum monthly fee, remember that upon transition to the Freedom Advisors platform last year nearly every account had its Platform Fee rate lowered and we automatically stopped billing on certain assets. The result was that, for nearly every account, fees declined, some by hundreds of dollars a month.

Is this an additional fee?
It is not an additional fee type, it is in limited cases an increase in an existing fee. In cases where an account’s monthly Platform Fee as calculated would otherwise be less than $12.50, it is increased to $12.50. For example, if the fee is calculated as $9.50, there would be $3.00 added to make the monthly fee $12.50.

Why introduce this minimum monthly Platform Fee now?
We understand there would never be a good time for this change. There is administrative expense that we incur for every account and this minimum monthly fee seeks to recoup at least part of our expense. We are still shouldering a portion of the expense of administering these accounts because we want to support your business.

How come I was not notified prior to the client communication?
We did send multiple advisor notices. Rest assured we will NEVER communicate with the client without informing you in advance. In this case, we included it as the headline notice in the weekly Dispatch and then sent a direct communication to you two days before the client mailing to make sure you knew before the clients got sent the communication. The email to you included a link right to the client communication. The change was communicated with advisors in The Dispatch on 9/25 and in a direct email on 9/27. A direct email to clients was sent on 9/29.

Some accounts are small because they hold illiquid restricted securities we could not transfer out when the account left. Will you apply this minimum fee to those accounts?
We will not charge this fee on an account that holds only residual restricted securities.

Where can I find precisely what fees a client is paying?
Each household has in its Documents vault the Monthly Performance & Billing Report, at the end of which is a billing page that details precisely what fees were charged for the month. There are 3 distinct fees applied: Advisory Fee, Platform Fee, and Money Manager Fee. This minimum monthly fee only applies to the Platform Fee. We collect your Advisory Fee and the Money Manager Fee and we pass them on 100% to you and to the money managers.

When and how will this minimum $12.50 monthly Platform Fee apply?
An account’s monthly Platform Fee is only increased to $12.50 if the fee calculated would otherwise be less than $12.50.

Is this fee assessed at the account level or the household level?
The minimum monthly Platform Fee is assessed at the account level.

Is this a permanent fee change or just for one month?
It is a permanent change, and it is to our Platform Fee only.