The Valla Accord
We get paid when you're ahead. Only then.
Most advisors collect every quarter whether your account advances or retreats. If your portfolio goes nowhere for five years, their bill does not. We do not call that alignment. The Valla Accord is our answer…
For qualified clients · Eligible portfolios designed by Valla only
The part nobody explains
A fee that advances while you stand still is not aligned.
The industry talks constantly about alignment. But the conventional fee schedule never asks whether you made financial progress. It deducts a percentage of your assets four times a year…in good markets, flat markets, and bad ones.
If the investments in an account are flat for five years before advisory fees, a conventional 1% asset-based arrangement can collect roughly 5% of average assets over that period before compounding and billing differences. The advisor's compensation progressed. The client's account did not.
Advice and planning can still provide value in a flat market. But service is not the same thing as financial alignment. If a firm claims its financial interests rise and fall with yours, its collection rule should prove it.
Common does not mean fair. If your progress pauses, why doesn't the fee?
“
We didn't design this to be clever. We designed it so that the first question in a hard year is ‘how are you doing,’ not ‘how do we get paid.’ ”
A different agreement
Paid from the harvest. Never from the seed.
Your eligible Valla-designed portfolios are the field. A new high under the agreement's calculation is the harvest. Under the Valla Accord, that is when our fee on those portfolios can be collected.
When the eligible portfolio value remains below its high-water mark, nothing is sold from those portfolios to pay the Valla advisory fee and nothing is held back. The capital stays invested and working toward recovery.
This is not a discounted rate. It is a standard 1% advisory fee with a different rule for when collection is permitted. We believe that is what alignment should mean: not a marketing claim, but a condition you can see in the agreement and in the invoice.
How the Valla Accord works
Three things to know.
A standard 1% fee.
The Accord's 1% advisory fee applies only to eligible portfolios designed by Valla for qualified clients. Other assets follow the fee terms in the advisory agreement. Applicable third-party expenses are separate.
Collected only above the mark.
Each quarter, the eligible Valla-designed portfolio value is tested against its prior high-water mark under the advisory agreement. Collection occurs only to the extent those portfolios remain at or above that mark after payment.
Until then, it waits.
The fee is calculated and deferred rather than withdrawn. Nothing is escrowed or set aside, so the money remains invested until the collection condition is met.
Questions people ask
Fair questions. Plain answers.
Does the Valla Accord apply to my entire portfolio?+
No. The Valla Accord applies only to eligible portfolios designed by Valla for clients who meet the qualified-client standard. Other assets and services are billed according to the terms disclosed in the advisory agreement and Form ADV.
Does this encourage Valla to take more risk to reach a new high?+
Performance-based compensation can create an incentive to take greater risk. Valla addresses that conflict through its disclosed investment process, supervision, and the Haven approach, which is designed around downside management. No strategy can prevent loss or guarantee a new high.
What if the market is flat for three years?+
If the eligible Valla-designed portfolios remain below their high-water mark, Valla does not collect their advisory fee during that period. While the relationship continues, fees are deferred rather than forgiven and may be collected after a later new high subject to the agreement's collection limit. If you terminate the relationship, accrued but uncollected Valla advisory fees are forgiven.
Does forgiving deferred fees encourage clients to leave?+
It removes a financial deterrent to leaving, and that is intentional. If another advisory firm is genuinely better for you, you should be free to choose it without receiving a deferred-fee bill from Valla. We accept the risk that a client could leave before collection because alignment should never become a set of financial handcuffs.
Is this a performance-based fee?+
Yes for regulatory purposes. Valla does not take a percentage of investment gains; it charges a 1% asset-based fee on eligible portfolios designed by Valla whose collection is conditioned on the high-water mark. The arrangement is performance-based compensation and is available only to qualified clients.
Who does the Valla Accord apply to?+
Two conditions apply: the client must meet the qualified-client standard under Rule 205-3, and the assets must be held in eligible portfolios designed by Valla. Clients and assets outside that scope follow the applicable conventional fee terms in the advisory agreement. Valla will explain the scope before an agreement is signed.
How can I compare this with my current advisor's fee?+
Ask for the firm's Form ADV Part 2A and your advisory agreement. Look for the rate, billing frequency, whether fees are charged in advance or arrears, other compensation, and what happens when the account declines.
The Valla Accord
Alignment should be written down.
Bring us your current agreement and statements. We will show you when your advisor gets paid, what else may be charged, and how the Valla Accord would differ if you qualify.