Best Investors
Sign in
Best Investors
Sign in
Item 5E is a checklist of compensation types the firm reports receiving for investment advisory services. The choices are percentage-of-assets fees, hourly charges, subscription fees, fixed fees, commissions, performance-based fees, and other arrangements.
The checklist names fee categories, not prices. It also does not assign each fee category to a service or client type. A firm can mark more than one box because its compensation can differ by service or relationship.
On Best Investors, Item 5E appears in the firm's ADV panel as a set of Yes/No rows. Treat each Yes as a reported compensation category. Do not assume that the category applies to every client.
Open Item 5E and note every Yes. Then use the firm's Form ADV Part 2A fee section and your proposed advisory agreement to answer the questions that Item 5E leaves open:
For percentage-of-assets fees, start with 5E(1). For hourly or fixed charges, compare 5E(2) and 5E(4). A Yes on 5E(5) commissions identifies a reported transaction-based compensation category; the checkbox alone does not identify who receives it, which products or transactions produce it, or how much is paid.
Performance-based and “Other” compensation need the same document-level review. Item 5E does not state eligibility terms, calculation methods, measurement periods, or the exact arrangement.
Item 5E does not provide rates, dollar amounts, breakpoints, minimums, billing dates, refund terms, or negotiability. It does not show which arrangement the firm would offer you.
The checklist also does not measure total cost or fee competitiveness. Two firms can mark the same boxes and charge different amounts for different services.
A compensation checkbox can identify a category that deserves more review, but it does not prove that a conflict affected a recommendation. Read the fee and conflict sections of Form ADV Part 2A and the actual agreement before comparing firms.