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Patton Wealth Management, Inc.- Fee schedule

Form CRS
  Reports

Fee Schedule

We offer two fee options for managing your total portfolio

We are confident that our Super-Diversification investment strategy will continue to produce long-term excess returns demonstrated by our offer of a purely performance-based fee schedule. Simply put, we only get paid if we deliver to you performance better than our competitors. We believe this best aligns our interest with our clients'.

To be eligible for this fee option, an investor must legally qualify per SEC regulations with one of the following:

  • Have a net worth of $2.2 million or more OR
  • Place $1.1 million or more under management with Patton (excluding ERISA and Corporate accounts)

Performance-Based Fee: 1/2 of the excess gain above the performance of an index of our competitors.

  • What is the "index of competitors"?

    An index created by and maintained by the ARC Group consisting of more than 350,000+ investor portfolios managed by 138 investment managers (as of April 2024) including some of the largest in the world. Alternative benchmarks, including consideration of a single investment manager, may be negotiated. More Details

  • It's customized.

    Our clients have different risk tolerances resulting in different Super-Diversified portfolios. The ARC Group has 4 indexes of our competitors' performance each with a different risk profile. We select the index that is the most appropriate, with the most similar risk profile, for each of our client portfolios.

  • How much is our fee?

    There is no management fee / asset-based fee but only a performance-based fee. When we deliver performance that is better than our competitor's, you pay us a fee equal to half of the excess gains above the competitor's return. View Example

  • What happens if we underperform our competition in a given year?

    If we deliver to you performance that is below our competitor's, you do not pay us anything. View Example

  • It's cumulative!

    If your Super-Diversified portfolio underperformers the competition one year (and you pay no fee), it must outperform the competition the next year PLUS make up the underperformance from year one. In legal language this is called a loss carryforward and is very much to the benefit of the investor. View Example

  • Alternative fee schedule available:

    You can instead pay a typical management fee / asset-based fee (and no performance fee). See fee option tab "Option #2 - Asset-Based Fee".

  • How much would the performance-based fee have been since the launch of Super-Diversification in 2010?

    The Performance-Based Fee would have been greater than the Asset-Based Fee option (with no performance fee). View Simulated Historic Fees

  • When is the fee charged?

    Our Performance-Based Fee is charged as of December 31st of each year. If you cancel our services prior to December 31st the calculation is done as of the most recent prior month-end and charged if applicable.

  • Cancel at any time and simply pay the fee up to that point if applicable.

  • How is risk controlled?

    Performance-based fees can encourage managers to take excess risks with clients money. We implement a strict investment strategy avoiding the possibility of taking added risks to hopefully increase returns.

  • Types of money that can be invested:

    you can invest nearly any type of money including taxable accounts, joint accounts, trust, IRAs, etc. We can manage multiple accounts (keeping them separate) as one total portfolio as well.

  • Other expenses:

    there are other expenses such as brokerage commissions ($0.005 per share), exchange traded fund expense ratios, and any other common custodian and brokerage expenses. None of these are paid to Patton. These costs tend to be relatively minimal. Our performance is calcuated NET of all such other expenses.

  • Minimum investment:

    $500,000.

Our Super-Diversification investment strategy has proven performance and we're confident it will persist or we won't get paid.

Pros and Cons

  • Fees are only paid to Patton in years when your Super-Diversified Portfolio exceeds the return of our compeition.
  • You could pay higher fees than our alternative fee option (Option #2 - Asset-Based Fee) BUT ONLY IF you get performance well in excess of our competition.
  • Only available to investors who legally qualify

1.50% annual management fee on the entire portfolio with no performance fee.

Pros and Cons

  • Allows investors with less than a $2.2 million net worth to have a portfolio unlike they can generally get elsewhere
  • During years when your Super-Diversified Portfolio produces a return far in excess of our compeition, your fees are lower than they would be with Option #1
  • During years when your Super-Diversified Portfolio produces a return less than or equal to our compeition, you still pay the same 1.5% management fee

Our annual management fee decreases for larger portfolios as follows:

Assets Managed Fee (Annual % of Assets)
up to $5,000,000 1.50%
$5,000,001 - $10,000,000 1.00%
$10,000,001 and up 0.75%
- These two fee options are only available to clients with a Super-Diversified Portfolio entirely in separately managed accounts
- Fee can be negotiated.
- Some clients’ fees are different than described above if they have been negotiated, are not invested as generally described here, or have a legacy fee schedule.
- See our Form ADV Part 2 and Investment Advisory Agreement for full fee details.