BILLING PROCEDURES & CLARIFICATIONS

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  • Accounts are billed monthly in advance.
  • Fees are calculated based on the total annual fee listed on the executed WWA Investment Advisory Agreement and the average daily balance at the custodian. 
  • All assets in the account are billed at the same rate, including managed assets, cash balances, and any blocked positions. Cash holds, full liquidations, and trading blocks are not excluded from the billing calculation.  
  • Fees are deducted at TD anywhere from the 4th-10th of each month. 
  • Advisors are paid anywhere from the 14th-18th of each month, depending on weekends and bank clearing times. 
  • Advisors can view the charges applied to each client and a general overview using the Pay Report tool in Fusion.
  • Direct billing questions to the WWA Operations Team at service@wealthwatchadvisors.com.  
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Assigning Fees to a New Account

  • Fees and rep codes are assigned through the Single Account Wizard in Fusion when writing new business. 
  • The Single Account Wizard will populate the assigned rate on the WWA Investment Advisory Agreement (“IAA”) when generating paperwork. 
  • The IAA must be signed by the Client and Advisor through the new account ticketing system in order to assign a fee to an account.
  • Each account owner only needs to sign the IAA once. Duplicate copies of the IAA are not required for each account.
  • Unique Fee Supplement paperwork is required in addition to the normal IAA when investing in HCM Ultra Aggressive and any of the ZEGA Financial models. See Fee Supplement section for details.

Changing Fees on an Active Account

  • Fees can be changed after the initial account opening process anytime by submitting a Fee Change ticket in Fusion. One Fee Change ticket per account number is required. Changes submitted on the 1st of the month or later cannot be applied intra-month and will be applied to the following month cycle.
  • A Fee Change ticket can be submitted to raise or lower a fee over time without a new signed IAA as long as the fee edits are within the parameters of the rate on the original IAA.
  • Be sure to complete the following steps within the Fee Change ticket process:
  • Select yourself as the writing Advisor
  • Select the Fee Schedule (pick the correct rep code)
  • Either type in or adjust the sliding scale to the fee amount
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Fee ranges are also outlined in our ADV and contractual documents.

Advisors may set the total fee anywhere between the maximum and minimum rate at their discretion.

Advisors are always paid the “rep remainder” (the difference between the total fee and the minimum fee).

WRAP ABP Accounts: (standard account type at TD)

Maximum fee = 195bps.
Minimum fee = 77bps.

For example, a fee set at 77bps will earn the Advisor 0bps. A fee set at 177bps will earn the Advisor 100bps.

The 77bps covers WWA’s minimum costs, including 20bps for the model, TD’s 10bps WRAP fee, and various other expenses handled internally by WWA staff.

HCM Ultra Aggressive: *the additional fee supplement form is required in addition to the normal IAA*

Maximum fee = 252bps.
Minimum fee = 152bps.

HCM Ultra Aggressive manager cost is 95bps instead 20bps. Fees for this model are increased so the Advisor can collect up to 100bps.

For example, a fee set at 152bps will earn the Advisor 0bps. A fee set at 252bps will earn the Advisor 100bps.

ZEGA Financial: *the additional fee supplement form is required in addition to the normal IAA*

Maximum fee = 202bps.
Minimum fee = 102bps.

ZEGA Financial manager cost is 45bps instead 20bps. Fees for this model are increased so the Advisor can collect up to 100bps.

For example, a fee set at 102bps will earn the Advisor 0bps. A fee set at 202bps will earn the Advisor 100bps.

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  • A new account will be billed for the first time once (2) conditions are met:
    1. WWA IAA paperwork has been received in good order.
    2. A balance is in the account at the Custodian.
  • In other words, fees will be due from the first day there is a balance in the account at Schwab as long as the client has signed the IAA. If a client signs the IAA late (after the account is already funded) their first round of charges will still be backdated to the date the account was funded.
  • Fees are due regardless of whether a model is assigned to the account, and regardless of whether the account is in-kind or in cash. Please note that cash holds, blocked securities and account liquidations using the “Full Liquidation – Client Requested” model are included in the billing calculation and charged the same rate.
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  • Billing does not stop until the account balance is fully transferred away. 
  • Placing trades of any kind in an account is always billable, including liquidating an account to hold cash or transfer out.
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Unique fee supplement forms are required in addition to the normal Investment Advisory Agreement in any case where the manager cost is higher than our usual 20 bps. 

The cost of each model can be found on the Available Strategies page in Fusion.

Examples of models with a higher than 20 bps cost are as follows:

  1. WWA – Bluerock Total Income+ Real Estate
  2. All ZEGA Financial models
  3. HCM Ultra Aggressive 

Each unique fee supplement document required to invest in these models can be found on the WWA – Client Contracts page of our website, or within the list of RIA forms for electronic signing in Fusion.

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A monthly overview of each Advisor’s billable AUM, number of accounts, and net fee payment can be found in Fusion under the Pay Report tool. 

Also within the Pay Report tool is a detailed outline of what amounts were billed at TD and how the charges were calculated. This data can be found within the Client Fees, Net Fees, and Advisor Net Fees sections. All of these detailed reports can be downloaded to Excel. 

The date range at the top of the screen must read the previous month period in order to view the details associated with the current month’s payment. This is required because we bill in advance.

The billable AUM and billable number of accounts might not match the total AUM and account count on your Accounts Overview. Not all accounts and balances are always billable for various reasons including whether they are traded into a model, whether there are any restrictions or blocks at TD, whether enough cash is available in the account to charge fees, etc. 

To view accounts that were calculated but unable to be collected, click on the green collected button and toggle the view over to the uncollected view. Any accounts listed in this view will be rolled over to a later month as soon as they are able to be collected from.

The Pay Report tool may not always match exactly to the amount that was distributed in your monthly ACH payment, due to reasons such as any additional third-party manager business payments that do not run through Fusion (SDBA, Private Wealth, 401GO), or if any manual adjustments need to be made to your pay by Wealth Watch Advisors for various reasons.

The Pay Report tool is most helpful to provide the details related to each client account is any questions arise, or you can always contact Wealth Watch Operations with questions.

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Advisor payments will fluctuate month over month perhaps more than some Advisors are accustomed to. This happens because we bill in advance and we use the average daily balance of accounts at the custodian to calculate fees. Our stance is that this billing system the most accurate way to calculate fees, however it does create “high-highs” and “low-lows” compared to other firms.

Because we use average daily balance numbers instead of using month-end values to calculate fees, our fee calculations are highly susceptible to the impact of daily market fluctuation, and are impacted by the number of calendar days in a month.

Months with fewer calendar days may produce less in collected fees as compared to a month with more calendar days.

Months where the market is fluctuating up on most days in a month will produce compounding higher revenue for our Advisors. Months where the market is fluctuating down most days in a month will produce compounding lower revenue for our Advisors. Compare this to a billing system that is looking at month-end values only for a 1 day period only, and you have a more fluctuating fee pattern when comparing monthly payments over time.

Our billing system also incorporates a True-Up calculation, where catch-up credits and/or debits are applied forward from the previous advance month. Since we bill in advance, we need to either refund back to the client or charge the client extra amounts from the previous period depending on the average daily balance, when the account was trading for the first time, and if there were any account additions or distributions. This can also cause our Advisory payments to fluctuate.

The combination of these variables should be considered by Advisors when examining their payments, rather than only focusing on AUM figures on a specific day. All of this data and how it was applied to each account is explained within the Pay Report tool in Fusion.

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Technology fees are charged to client accounts on a quarterly basis (January, April, July, October). The terms of the fees are described in the Investment Advisory Agreement.

The lesser of $10.00 or 50bps is charged to each account per quarter.

The fees are entirely separate from monthly advisory fees. The fees do not produce any revenue for Advisors. The fees are to simply pass along flat technology costs per account directly to clients.