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Form ADV Part 1A Item 5I(2)(c) · Answer type: currency · Item 5 - Wrap Fee Programs
Item 5I(2)(c) reports the dollar amount of the firm's regulatory assets under management attributable to acting as sponsor to and portfolio manager for the same wrap fee program. This represents assets where the firm serves both roles simultaneously - operating the wrap program and providing investment management within that same program.
In the dual sponsor-and-manager role, the firm creates and operates the wrap program structure while also serving as one or more of the investment managers available within their own platform. They maintain client relationships, set program fees, handle operations, and provide investment management services all under one organizational structure.
This integrated model allows the firm to control both the wrap program client experience and the investment management quality, potentially providing more consistent service and streamlined operations compared to programs using only external portfolio managers.
5I(2)(c) assets are reported separately from 5I(2)(a) sponsor-only and 5I(2)(b) portfolio-manager-only regulatory AUM to prevent double-counting when firms play multiple roles. Assets in 5I(2)(c) are not included in the other two categories.
The dual-role model often appeals to investment management firms that want to offer wrap fee convenience to clients while maintaining direct control over investment decisions. It can also provide operational efficiencies by eliminating coordination requirements between separate sponsors and portfolio managers.
Some firms use the dual-role model to offer their proprietary investment strategies through wrap fee structures while supplementing with third-party managers for asset classes or strategies outside their expertise. Others focus exclusively on their own management within their sponsored programs.
Dual-role arrangements can create potential conflicts of interest if the firm favors their own management over third-party options within their wrap programs, or if they structure fees to favor their managed assets over external manager alternatives.
The regulatory AUM in this category represents assets from clients who selected both the firm's wrap program platform and their investment management services, indicating client confidence in both operational and investment capabilities.
5I(2)(c) - Amount of your regulatory assets under management attributable to acting as sponsor to and portfolio manager for the same wrap fee program (currency).
This is one field in Item 5I(2), "Wrap Fee Program Assets." The firm reports dual-role regulatory AUM as of its Form ADV reporting date.
5I(2)(c) shows the scale of the firm's integrated wrap program operations where they control both program structure and investment management. If you want wrap fee convenience with direct access to the firm's investment expertise, substantial dual-role AUM indicates experience with this integrated model.
The integrated approach can provide consistency between program operations and investment management, potentially offering better coordination, communication, and service delivery compared to multi-firm wrap program structures.
However, dual-role arrangements also do not guarantee better investment performance or lower total costs. The firm's success depends on both their operational capabilities as program sponsors and their investment skill as portfolio managers.
Large 5I(2)(c) amounts might indicate potential conflicts of interest if the firm's dual role creates incentives to favor their own investment management over potentially better third-party options within their wrap programs.
The figure does not tell you what portion of the firm's wrap program consists of their own management versus third-party managers, fee structures, investment performance, or whether clients can access the firm's investment management outside the wrap program structure.
The value is a dollar amount representing dual-role regulatory AUM as of the Form ADV reporting date. For example, 60000000 represents $60,000,000 in sponsor-and-portfolio-manager regulatory AUM.
On the firm's Best Investors ADV panel, find Item 5I and look for 5I(2)(c) in the wrap assets section. This figure should not overlap with 5I(2)(a) or 5I(2)(b) to avoid double-counting wrap-related assets.
Compare 5I(2)(c) to 5F(2)(c) total regulatory AUM to see what portion of the firm's advisory business operates through integrated wrap program arrangements versus traditional advisory relationships or other wrap program roles.
Large 5I(2)(c) amounts relative to total regulatory AUM suggest the firm focuses significantly on integrated wrap program delivery rather than traditional advisory services or other business models.
When evaluating integrated wrap programs, ask about the balance between the firm's own investment management and third-party options, fee structures, investment performance of the firm's strategies within the wrap program, and potential conflicts of interest in manager selection.