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Form ADV Part 1A Item 5E(7) · Answer type: yn · Item 5 - Compensation
Item 5E(7) asks whether the firm is compensated by a method that does not fit the other Item 5E boxes - reported as Other. This catch-all checkbox captures custom fee arrangements beyond the standard categories.
The standard Item 5E boxes cover asset-based percentages, hourly charges, subscription fees, fixed fees, commissions, and performance-based fees. When a firm uses compensation structures outside those categories, it marks 5E(7) and often includes descriptive text explaining the arrangement.
Examples of "other" compensation might include retainer-based models, project fees tied to specific deliverables, consulting arrangements with success bonuses, revenue-sharing from client business ventures, or hybrid structures that combine elements from multiple fee types. Some firms also use 5E(7) for industry-specific arrangements like real estate transaction fees or insurance commission splits that do not fit neatly into the named boxes.
On Form ADV, firms typically provide a brief description when marking 5E(7) Yes. This text appears in the "specify" field and gives a hint about the fee structure, though full details remain in client agreements and the firm's Part 2A Brochure.
Do not confuse 5E(7) with 5E(4) fixed fees for standard flat-fee arrangements, or 5E(6) performance-based fees for results-tied compensation. The "other" category is for structures that genuinely fall outside the named boxes.
Yes
The firm reports using a compensation arrangement that does not fit the other Item 5E categories. Check for descriptive text explaining the structure.
No
The firm does not report any compensation methods beyond the named Item 5E categories.
5E(7) - Other (Yes / No).
This is one checkbox in Item 5E, "Compensation Arrangements." When firms answer Yes, they typically add explanatory text in a "specify" field describing the fee structure that does not fit the other boxes.
5E(7) reveals whether the firm uses fee structures beyond the standard industry categories. If you want transparency about all compensation methods, Yes answers here require extra diligence to understand what the firm means by "other."
A Yes does not tell you the fee amounts, calculation methods, or client eligibility for the custom arrangement. The ADV specify text provides only a brief description. Full fee details live in the firm's client agreements, Part 2A Brochure, and separate fee schedules they provide during engagement.
Some "other" arrangements can create unique conflicts of interest or incentives not present in standard fee models. For example, revenue-sharing from client ventures might encourage advisers to recommend specific investments that benefit their compensation rather than the client's portfolio. Retainer models might reduce incentives for ongoing portfolio attention if the firm gets paid regardless of service level.
Conversely, custom arrangements can align adviser and client interests in ways standard fees do not. Success-based consulting fees might motivate advisers to deliver better outcomes, while project-based structures can provide cost certainty for specific engagements.
The answer also does not indicate fee competitiveness or service quality. Some firms use "other" structures because they offer specialized services requiring custom pricing, while others may complicate simple arrangements unnecessarily.
Yes
The firm reports custom compensation arrangements. On Best Investors, find Item 5E on the firm's ADV panel and look for 5E(7) marked Yes. Read any specify text next to it for clues about the fee structure. Then check which other 5E boxes are also marked - many firms combine "other" arrangements with standard fees for different clients or services.
Ask the firm to explain the other compensation method in plain terms, including how it is calculated, when it applies, and whether it affects your potential engagement.
No
The firm does not report custom fee arrangements on 5E(7). Its compensation methods fit the standard Item 5E categories only. Look at the other marked 5E boxes to see which standard fee types the firm uses.
Compare the firm's total client count in Item 5C for scale context and services in Item 5G to understand what drives its fee structure. The 5E(7) checkbox sits at the bottom of the Item 5E compensation section on the firm's Best Investors ADV form.