Performance Accounts
Align your financial growth with an advisory model where you only pay for actual portfolio results.
We align our incentives with your portfolio’s success. Under our performance-based agreements, October Effect, Ltd. earns a performance fee only when your account reaches or exceeds its designated growth target.
How do performance-based management agreements work?
We offer two performance-based portfolio models depending on your growth objectives and risk tolerance:
1. Aggressive Income and Growth Portfolio
Features a baseline management fee of 0.50% annually (assessed quarterly at 0.125%). A 5% incentive fee is applied to portfolio gains only when the account reaches or exceeds a 12% target gain.
2. Aggressive Derivatives Portfolio
Features a baseline management fee of 0.70% annually (assessed quarterly at 0.175%). A 20% incentive fee is applied to portfolio gains only when the account reaches or exceeds a 30% target gain.
When an account hits its targeted annual benchmark, the performance fee is calculated during the first quarter of the following year based on the completed calendar year’s gain. All accounts operate under a high-water mark provision so that fees are assessed according to the terms detailed in your agreement.
“Qualified Client” Eligibility Requirements
Under federal securities law, offering a performance fee structure is limited to investors who meet “Qualified Client” standards.
To participate, an individual must meet at least one of the following criteria:
- Maintains at least $1.1 million in assets under management with October Effect, Ltd. upon entering the advisory contract.
- Holds a net worth exceeding $2.2 million (individually or jointly with a spouse) immediately prior to entering the contract, excluding the value of a primary residence.
- Owns at least $5 million in investment assets at the time the agreement is executed.
- Serves as an executive officer, director, trustee, or general partner of October Effect, Ltd.
- Works as an employee of October Effect, Ltd. who has actively participated in investment advisory operations for at least 12 months.
Ready for Results-Driven Portfolio Management?
Partner with an advisory team that shares accountability for your portfolio’s growth targets.
FAQs
Does October Effect, Ltd. offer performance-based fee accounts in Virginia Beach?
Yes. October Effect, Ltd. is a Virginia Beach registered investment advisory firm providing incentive-aligned performance fee models for qualified high-net-worth investors.
What are the base fees and growth benchmarks at October Effect, Ltd.?
The Aggressive Income and Growth portfolio charges a 0.50% base fee with a 5% incentive fee after reaching a 12% target gain. The Aggressive Derivatives portfolio charges a 0.70% base fee with a 20% incentive fee after hitting a 30% target gain.
How does October Effect, Ltd. verify Qualified Client eligibility?
Under Sections 205 and 205-3 of the Investment Advisers Act of 1940, clients qualify by maintaining $1.1 million in assets under management with October Effect, Ltd. Alternatively, clients can qualify with a net worth over $2.2 million excluding their primary residence.
When are performance fees calculated and collected by October Effect, Ltd.?
Baseline advisory fees are billed quarterly at 0.125% or 0.175%. Incentive fees are calculated in the first quarter of the following year when annual gain targets are reached.
How are performance fee accounts different from standard AUM fees?
Standard AUM models charge fixed fees regardless of market returns. Performance accounts lower your baseline advisory cost while ensuring your advisor earns incentive compensation only when meeting target gains.
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