Mercury was founded in October 2019. Additional information about Mercury is available on the SEC’s
website at
https://adviserinfo.sec.gov/firm/summary/308960. The SEC’s website also provides information
about any persons affiliated with Mercury who are registered, or are required to be registered, as investment
adviser representatives of Mercury.
Mercury is a registered investment adviser (“RIA”) that offers a wrap fee program to its advisory clients (each
a “Client,” and collectively, “Clients”) through an online web-based platform.
Mercury is a privately held company headquartered in San Francisco, California. Mercury Advisory is a
wholly owned subsidiary of Mercury Technologies Inc, a financial technology company. Further information
is provided on Part 1 of Mercury’s Form ADV, which is available online at
http://www.adviserinfo.sec.gov.
Wrap Fee Program
Mercury provides web-based advisory services through a wrap fee program that bundles or “wraps” services
together and charges a single fee based on the value of assets under management (the “Program”). The
Program is provided, primarily, through Mercury’s website,
https://mercury.com/ (the “Website”). The
services included in the Program are the management of portfolio allocations and certain advisory functions
with respect to the portfolios. Additional information about Mercury’s products and services is provided in
Mercury’s Form ADV Part 1 available at
https://adviserinfo.sec.gov/firm/summary/308960. Mercury
encourages visiting the Website for additional information.
Mercury’s Clients consist solely of small business entities, typically venture-backed start-ups.
Clients utilize the Website, which allows a Client to allocate its financial resources into an investment portfolio
designed to meet a Client’s financial goals within their respective investment risk tolerance, financial
parameters, and liquidity needs. Clients with a minimum balance greater than $250,000 and less than
$25,000,000 may choose investments offered through the “Mercury Treasury” (“Treasury”) product, a
Program that includes a combination of mutual funds (“MFs”). Generally, the underlying assets of the MFs
available through the Program shall consist of money market funds or fixed income (debt) securities, although
MF choices with other underlying assets may be offered based upon the discretion of Mercury’s Investment
Committee. Mercury provides investment advice only with respect to limited types of investments.
Clients with a minimum balance greater than $25,000,000 may choose MFs offered through Mercury Treasury
as noted above or may also qualify for the “Mercury Treasury Solutions” (“Treasury Solutions”) product
which is advised by Morgan Stanley Professional Alliance Group (“Morgan Stanley”). Morgan Stanley
provides custom portfolio management and a wider selection of fixed-income securities, primarily U.S.
Treasury debt securities, to Treasury Solutions clients.
During Mercury Treasury Client onboarding, each Client provides its investment objectives, risk tolerance,
and the monetary amount it wishes to allocate via an interactive questionnaire within the Program. After
completion of the interactive questionnaire, the Program will recommend a non-discretionary investment
portfolio for the Client. Clients should understand the investment portfolios rely upon the information provided
by the Client during the onboarding process and Mercury does not capture any additional information not
covered in the onboarding process in providing its investment advice.
Mercury does not allocate assets or directly manage accounts for Clients. The Program provides
recommendations to each Client, and each Client is solely responsible for implementing such
recommendations. Clients are responsible for directing purchases and sales of specific investments. Clients
are not required to implement Mercury’s investment advice and should carefully review all of the information
provided by the Website and in the relevant MF prospectus before investing.
Mercury Treasury Solutions Clients will be introduced by a Mercury Representative to investment
representatives from Morgan Stanley, who will recommend a non-discretionary investment portfolio for the
Client. Clients should understand the investment representatives rely upon the information provided by the
Client and information not captured is not considered in providing investment advice.
Clients are obligated to update their information through the Website or via conversation with their
Relationship Manager promptly if there are changes to their financial situation, liquidity needs, risk tolerance
or if other relevant information changes or becomes available.
The investments in each Client’s account are held in a separate account in the name of the Client at an
independent custodian, and not with Mercury. All accounts managed through the Treasury program and
directly through the Website are required to use Apex Clearing Corporation (“Apex”) as the custodian.
Mercury does not have the authority to manage Client accounts on a discretionary basis and does not trade in
any Client’s account except at the Client’s direction. All Treasury Solutions accounts are required to use
Morgan Stanley as custodian. Mercury is independent of Morgan Stanley and Apex and all investments are
held in the name of the Client.
Mercury does not allow the purchase of fractional shares.
Clients will receive Mercury’s Advisory Agreement, which further details the services Clients will receive,
fees charged to Clients, and the conditions of the Mercury-Client relationship. Importantly, Mercury does not
provide overall financial planning services, nor does it provide tax advice.
Fees and Compensation
The Program charges an annual “wrap” fee, which allows Clients to pay a single fee for investment advisory
services (the “Fee”). The Fee is not based upon transactions in a Client account, but rather is a bundled fee,
which includes the costs for advisory services, execution, clearance, custody and account reporting.
The Mercury Treasury product charges a Fee that is billed as the lesser of the following: (1) the amount due
under the Fee Schedule set forth below (the “Fee Cap”); or (2) twenty percent of the effective federal funds
rate (“EFFR”). Notwithstanding the foregoing, the Mercury Fee will never be less than five basis points
(0.05%).
TIERED FEE
Investing Account and Deposit Account Balance Mercury Fee
Less than $2,000,000 60 basis points (0.60%)
$2,000,000 - $4,999,999.99 45 basis points (0.45%)
$5,000,000 - $9,999,999.99
35 basis points (0.35%)
$10,000,000-19,999,999.99 25 basis points (0.25%)
$20,000,000 or more 15 basis points (0.15%)
The Mercury Fee is charged monthly, in arrears based on the daily balance in the Client account and the
Client’s deposit accounts opened and accessed through our affiliate, Mercury Technologies, Inc. (together,
“Deposit Account”) each day during the previous month. Where the fee is based on EFFR, the Fee for each
month is calculated based on the daily EFFR during the previous month. The Fee percentage is applied to
invested balance in the Treasury account.
Mercury’s Treasury Solutions product charges a fee of 8 basis points (0.08%) charged monthly, in arrears and
based upon the daily balance in the Client account at Morgan Stanley. This fee compensates both Mercury
and Morgan Stanley and includes all costs for advisory services, execution, clearance, custody and account
reporting. Fees are charged to clients directly by Morgan Stanley.
The Mercury Treasury Fee is negotiable, and Mercury reserves the right to waive the Fee or any part thereof
for any period for any Client in Mercury’s sole discretion. The fee for Mercury Treasury Solutions is set by
Morgan Stanley. For example, Mercury may, from time to time, elect to launch programs or initiatives
whereby the Fee may be waived, in whole or in part, for certain categories of Clients. Any such program or
initiative (i) is entirely discretionary to Mercury and may be expanded, narrowed, suspended, canceled or
modified at any time by Mercury, and (ii) will be subject to any rules, guidelines and/or terms and conditions
created by Mercury in connection therewith (which rules, guidelines and/or terms may be included on the
Website and/or elsewhere). To the extent any such program or initiative is canceled or terminated, Clients will
once again be charged the then-current Fee on a going-forward basis. Mercury shall have sole discretion in
determining whether or not any existing Client or potential Client meets the requirements to participate in
and/or benefit from any such program or initiative, and Mercury shall not be liable to the Client or any other
party in connection with any such decision and/or in connection with the administration of any such program
or initiative generally. Any program, initiative, waiver, modification or other change to the Fee noted above
is only applicable to the Mercury Fee charged by Mercury. Clients may still be subject to any fees charged
separately by the custodian, funds company or other third parties.
Mercury will deduct the Fee from the Client’s account on a monthly basis. This Fee will be paid from funds
in the account or from funds resulting from the sale of investments from the Client’s account. Mercury may
initiate a sale of investments from the Client’s account to pay the fee. Each time a Client uses Mercury’s
advisory services, they reaffirm their agreement that Mercury may charge the accounts, as applicable. In the
event Mercury cannot charge the applicable accounts, it reserves the right to terminate a Client’s access to its
advisory services. Mercury may terminate the account at its sole discretion. Each Client may also terminate
its account at any time. Upon termination of a Client’s account, assets are liquidated as soon as practicable,
and money is returned to the Client, if applicable. Once the account termination process is initiated, Mercury
will no longer accrue any fees from the Client with respect to the Client’s account, although fees not yet
deducted for partial months prior to the account termination process may still be deducted. In the circumstance
where a Client’s account is opened mid-month or terminated mid-month the Fee may be applied to the account
on a prorated basis.
Mercury believes its wrap fee is reasonable considering the quality and scope of the services it provides and
the fees charged by other investment advisers offering similar services/programs. For example, Mercury is
able to give Clients access to mutual funds at a lower minimum initial investment than Clients may be able to
access through other sources. However, by participating in a wrap fee program, Clients may end up paying
more or less than they would through a non-wrap fee program where a lower advisory fee is charged, but trade
execution costs are passed directly through to the Client by the executing broker. In that scenario, Clients
would be responsible for any other fees charged by other parties, including the respective custodian, Apex or
Morgan Stanley. Clients could also invest in MFs and other assets directly without Mercury’s services. In that
case, Clients would not receive the services provided by Mercury, which are designed, among other things, to
assist in determining which investments are appropriate for the Client’s account.
There exists a conflict of interest for Mercury and Mercury Technologies to recommend to Client the service
or account that produces the most revenue for Mercury and Mercury Technologies and not the service or
account that is the most suitable for a Client. This conflict is heightened where the Fee is calculated based on
the combined balance of Client accounts of Mercury and Deposit Accounts opened and accessed through
Mercury Technologies because in certain cases, Mercury has an incentive to recommend Clients open and
access additional Deposit Accounts and for them to maintain and deposit additional funds into such Deposit
Accounts. However, Client participation in the services provided by Mercury and Mercury Technologies, Inc.
is strictly voluntary, and fees and related expenses are fully disclosed to a Client; therefore, this conflict is
minimized.
Other Account Fees
The Program includes all trade charges applicable to an account. At the current time the custodians do not
charge any additional fees however, Mercury’s fees do not include other related costs and expenses that
custodians or other third parties may levy. Clients may incur certain charges imposed by custodians and other
third parties. These include transfer fees, administrative fees and other fees and taxes on brokerage accounts
and securities/asset transactions. The issuer of some of the securities or products purchased for Clients, such
as MFs or other financial products, may charge product fees that affect Clients. Mercury does not charge these
fees to Clients and does not benefit directly or indirectly from any such fees. A MF typically includes
embedded expenses that may reduce the fund’s net asset value, and therefore directly affect the fund’s
performance and indirectly affect a Client’s portfolio performance or an index benchmark comparison. These
fees are in addition to the Fee Clients pay to Mercury. Clients should review all fees charged to fully
understand the total amount of fees they will pay.
Performance-Based Fees and Side-by-Side Management
Mercury does not charge any performance-based fees. These are fees based on a share of capital gains on or
capital appreciation of the assets of a Client. Mercury does not engage in side-by-side management. Mercury
maintains only one general type of fee structure (a Wrap Fee).