Item 5 – Fees and Compensation
As Capital Analysts services independent financial advisors, each Capital Analysts office has its own established fee
schedule(s). Fees for all advisory services provided are charged separately from any sales commissions. Fees are negotiable
and vary depending upon the particular office providing the services, the Financial Advisor performing the services and the
complexity and extent of the work provided. There is no usual range of fees as the services provided vary. Fees may be
calculated based on the particular services to be provided, on an hourly rate, a fixed fee, a combination of fees and
commissions, a percentage of assets under management and/or other methods including a matrix method of determining the
fee for services provided. The cost of the investment advisory fees may be greater than if you purchased a portfolio of similar
investments through a brokerage arrangement. It is important that the client evaluate the services received in light of the
proposed costs. Each client must refer to the Advisory Services Agreement, applicable fee schedule and/or respective CAAMS
Program Agreements for the description of the amount, terms of payment, and calculation of the advisory fee, payable in
advance or arrears, for their specific situation and debited from their specific custodial account. Fees on advance billed
accounts are rebated on a pro-rated basis at the time of termination calculated on the number of calendar days remaining in
the quarter. Also, each client must refer to the Advisory Services Agreement, fee schedule(s), and/or their respective CAAMS
Program Agreements for information concerning ticket charges, refunds and contract termination.
As broker or agent, we effect security transactions for compensation for our clients. As a principal, we may buy securities for
ourselves and may sell securities we own to any client. We, our employees, affiliates and financial advisors may buy or sell for
ourselves securities that are also recommended to clients. Capital Analysts does not, as a general practice, buy or sell any
securities as principal for its own investment account. Whatever product the Financial Advisor recommends, he or she will do
so when there appears to be a definite need and if the product meets the client’s current objectives. Purchase of any such
products by the client may result in a commission being paid to the Financial Advisor for his or her role as broker or agent,
which would be in addition to any fee paid for the services described above. With the exception of its Insider Trading policies
and procedures, Capital Analysts does not impose on itself or any person associated with it any restrictions in connection with
the purchase or sale, directly or indirectly, of investments for his or her own account. Capital Analysts requires that Financial
Advisors disclose any and all conflicts of interest to the client if an investment product is recommended for which Capital
Analysts or the Financial Advisor has some financial interest.
It is Capital Analysts’ policy to ensure clients are reinstated to their intended position following a trade error. Specifically, if
Capital Analysts causes a trade error to occur in a client account that results in a loss, Capital Analysts will reimburse the
client. If the trade results in a gain, Capital Analysts will keep that gain.
In the normal course of doing business, both Capital Analysts and/or Financial Advisors affiliated with Capital Analysts receive
compensation for the sale of securities including mutual funds, money markets, variable products, stocks, bonds, options,
and/or alternative investments. This compensation may be in the form of:
Commissions, mutual fund loads or new issue dealer concessions based on specific transactions. For any product sold
by prospectus or offering circular, please read this document in detail for additional information.
Advisory fees based on the amount of assets under management or financial planning functions performed by
Investment Advisor Representatives of Capital Analysts. These fees are disclosed in the clients’ Investment Advisory
agreement with Capital Analysts.
Recurring distribution fees based on assets held in an account (12b-1 and/or management fees). For any product sold
by prospectus or offering circular, please read this document in detail for additional information.
Additional forms of compensation received by Capital Analysts may include:
Cash payments to Capital Analysts from product companies as reimbursements for training and educational expenses
incurred by financial advisors or Capital Analysts home office associates when attending educational meetings or
conferences held by Capital Analysts or by a product company.
Cash payments to Capital Analysts based on total assets of a product company or group of product companies.
General marketing and administrative support to be used by Capital Analysts at its discretion.
Capital Analysts offers securities distributed by over 250 product companies and receives additional compensation in one or
more of the forms described above from the product companies. It is estimated that in 2011 the total additional compensation
for these items will be $100,000. The amount of additional compensation given by these product companies varies from one
company to another. Certain compensation received by Capital Analysts is not shared with Financial Advisors or their
Managing Associates.
We currently receive additional compensation from the following product companies:
Allianz, Atlas, Anthem CNL, Cole Capital, Dividend Capital, Everbank*, Hartford, Genworth, Inland, Mewbourne, Nationwide,
Prudential, SEI, Touchstone and Wells.
Capital Analysts receives compensation calculated on cash balances in money market funds in accounts held at Pershing LLC
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