Services
Alera Investment Advisors, LLC (“AIA” or the “Advisor”) provides customized investment management and
related advisory services to high net worth individuals, families, trusts, estates, businesses, institutions, and
retirement plans (each referred to as a “Client”). This Wrap Fee Program Brochure is provided as a
supplement to the Form ADV Part 2A (“Disclosure Brochure”). This Wrap Fee Program Brochure is provided
along with the complete Disclosure Brochure to provide full details of the business practices and fees when
selecting AIA as an investment advisor.
As part of the investment advisory fee noted in Item 5 – Fees and Compensation of the Disclosure Brochure,
AIA includes normal securities transaction fees as part of the overall investment advisory fee. Securities
regulations often refer to this combined fee structure as a “Wrap Fee Program”.
The sole purpose of this Wrap Fee Program Brochure is to provide additional disclosure relating the
combination of securities transaction fees into the single “bundled” investment advisory fee. This Wrap Fee
Program Brochure references back to the AIA Disclosure Brochure in which this Wrap Fee Program
Brochure serves as an Appendix. Please see Item 4 – Advisory Services of the Disclosure Brochure for
details on AIA’s investment philosophy and related services.
Program Costs
Advisory services provided by AIA are offered in a wrap fee structure whereby applicable securities
transaction fees for certain mutual funds, custody fees, and administrative fees, including custody fees and
transaction-based fees and expenses (herein “Covered Costs”) are typically included in the overall
investment advisory fee paid to AIA. As the level of trading in a Client’s account(s) may vary from year to
year, the annual cost to the Client may be more or less than engaging for advisory services where the
transactions costs are borne separately by the Client. The cost of the Wrap Fee Program varies depending
on services to be provided be to each Client, however, the Client is not charged more if there is higher
trading activity in the Client’s account(s). A Wrap Fee structure presents a conflict of interest as AIA has an
incentive to limit the number of trades placed in the Client’s account(s) or to utilize securities that do not
have transaction fees. To mitigate this conflict, the Advisor has entered into an asset-based pricing
arrangement with the Custodian whereby all custody and brokerage fees are a flat-basis point based on
level of assets at the Custodian, and not a per transaction fee. Please see Item 5 – Fees and Compensation
of the Disclosure Brochure for complete details on fees.
Fees
Investment advisory fees are paid quarterly, in advance of each calendar quarter, pursuant to the terms of
the investment advisory agreement. Investment advisory fees are based on the market value of assets
under management at the end of the prior calendar quarter. Investment advisory fees range from 0.25% to
1.50% annually depending on the level of assets to be managed, the investment strategy to be employed,
and/or the complexity of services to be provided.
The investment advisory fee in the first quarter of service is prorated from the inception date of the
account(s) to the end of the first quarter. Fees may be negotiable at the sole discretion of AIA. Certain
Clients may have a fixed annual fee or fixed rate fee or a fee schedule that differs from above. The Client’s
fees will take into consideration the aggregate assets under management with AIA. All securities held in
accounts managed by AIA will be independently valued by the Custodian. AIA will not have the authority or
responsibility to value portfolio securities.
Investment advisory
fees will be calculated by AIA or its delegate and deducted from the Client’s account(s)
at the Custodian. AIA or its delegate shall send an invoice to the Custodian indicating the amount of the
fees to be deducted from the Client’s account(s) at the respective quarter-end date.
Fees are calculated utilizing the number of trading days in a year and billed quarterly in advance. The stated
annual fee is divided into four quarterly payments based on the pro rata number of trading days in each
quarter (e.g., 64 in Q1, 61 in Q2, etc.). The amount due in each quarter is calculated by taking the pro rata
fee for the coming quarter (in advance) and multiplying it by the balance on the last business day from the
prior quarter.
Clients will be provided with a statement, at least quarterly, from the Custodian reflecting deduction of the
investment advisory fee. It is the responsibility of the Client to verify the accuracy of these fees as listed on
the Custodian’s brokerage statement as the Custodian does not assume this responsibility. Clients provide
written authorization permitting advisory fees to be deducted by AIA directly from their accounts held by the
Custodian as part of the investment advisory agreement and separate account forms provided by the
Custodian.
Clients who have selected to use independent managers, unaffiliated money managers, or investment
platforms (collectively “Independent Managers”) will have a portion, or all of their assets directed to the
Independent Manager(s). To eliminate any conflict of interest, the Advisor does not earn any compensation
from an Independent Manager. The Advisor will only earn its investment advisory fee as described above.
Independent Managers typically do not offer any fee discounts but may have a breakpoint schedule which
will reduce the fee with an increased level of assets placed under management with an Independent
Manager. The terms of such fee arrangements are included in the Independent Manager’s disclosure
brochure and applicable contract(s) with the Independent Manager. The total blended fee will be based on
AIA’s Fee applicable to all Account(s) assets, and the Independent Manager Fee applicable to all assets
subject to the Independent Manager(s)’s management.
Clients may incur certain fees or charges imposed by third parties in connection with investments made on
behalf of the Client’s account(s) which are not included in this Wrap Fee Program. All fees paid to AIA for
investment advisory services or part of the Wrap Fee Program are separate and distinct from the expenses
charged by mutual funds and exchange-traded funds to their shareholders, if applicable. These fees and
expenses are described in each fund’s prospectus. These fees and expenses will generally be used to pay
management fees for the funds, other fund expenses, account administration (e.g., custody, brokerage and
account reporting), and a possible distribution fee. Additionally, account activity fees, such as electronic
funds and wire transfers fees, certificate delivery fees, markups and markdowns, bid-ask spreads, selling
concessions, and other miscellaneous fees and expenses as outlined in the account opening paperwork
executed with the Custodian, are generally charged to the Client.
AIA does not control nor share in these fees. Clients are encouraged to review all fees charged the
Custodian, by the fund(s) and AIA to fully understand the total fees to be paid. Please see Item 5.C. – Other
Fees and Expenses of the Disclosure Brochure.
Compensation
AIA is the sponsor and portfolio manager of this Wrap Fee Program. AIA receives investment advisory fees
paid by Clients for investment advisory services covered under this Wrap Fee Program.