Item 5. Fees and Compensation
CSA offers its services on a fee basis, which may include fees based upon assets under management or
advisement or the performance of the client’s portfolio.
Investment Management and Wealth Management Fees
CSA provides investment management services for an annual fee based on the amount of assets under
the Firm’s management. The fee varies between 80 and 125 basis points (0.80% – 1.25%), depending
upon the size of a client’s portfolio and the type of services rendered.
The annual fee is prorated and charged quarterly in arrears, based upon the market value of the assets
being managed by CSA on the last day of the previous billing period.
If assets are deposited into or withdrawn from an account after the inception of a billing period, the fee
payable with respect to such assets is adjusted to reflect the change in portfolio value. For the initial
period of an engagement, the fee is calculated on a pro rata basis. In the event the Agreement is
terminated, the fee for the final billing period is prorated through the effective date of the termination and
the unearned portion is refunded to the client, as appropriate.
Page 7 © MarketCounsel 2013
Capital Security Advisors LLC Disclosure Brochure
Sub Advisor Investment Mangement Fees
CSA provides investment management services under sub-advisory relationships for an annual fee based
on the amount of assets under the Firm’s management. Under such relationships, the Firm has no direct
relationship with the ultimate client. These fees will vary between 20 and 35 basis points (0.20% –
0.35%).
The annual fee is prorated and charged quarterly in arrears, based upon the market value of the assets
being managed by CSA on the last day of the previous billing period.
Retirement Plan Consulting Fees
CSA generally charges as fixed project-based fee to provide clients with retirement plan consulting
services. Each engagement is individually negotiated and tailored to accommodate the needs of the
individual plan sponsor, as memorialized in the Agreement. These fees vary, based on the scope of the
services to be rendered. In those situations where CSA has agreed to manage a plan’s assets, the Firm
may also charge an annual asset-based of 50 and 150 basis points (0.50% – 1.50%), depending upon
the amount of assets to be managed.
Performance Based Investment Management Fees
Alternatively, CSA offers investment management services to qualified clients for a performance-based
fee in accordance with applicable laws, rules and regulations. Under this arrangement, CSA charges
clients a fee based upon the performance of their accounts (the “performance fee”) in addition to a fee
based upon the market value of the assets being managed by CSA (the “base fee”).
The performance fee is equal to 20% of the net performance of a client’s portfolio, subject to a high water
mark by which the account exceeds an agreed upon hurdle rate. The performance fee is charged
quarterly in arrears and is based upon a client’s net gains during a calendar year period. The base fee
varies between 150 and 200 basis points (1.50% – 2.00%), depending upon the size of a client’s portfolio
and the type of investment management services rendered. The base fee is prorated and charged
quarterly in arrears, based upon the market value of the assets being managed by CSA on the last day of
the previous billing period.
If assets are deposited into or withdrawn from an account after the inception of a billing period, the base
fee payable with respect to such assets is adjusted to reflect the change in portfolio value. For the initial
term of an engagement, the base fee is calculated on a pro rata basis. In the event the Agreement is
terminated, the base fee for the final billing period is prorated through the effective date of the termination
and the unearned balance is refunded to the client, as appropriate.
Page 8 © MarketCounsel 2013
Capital Security Advisors LLC Disclosure Brochure
Fee Discretion
CSA, in its sole discretion, may negotiate to charge a lesser fee based upon certain criteria, such as
anticipated future earning capacity, anticipated future additional assets, dollar amount of assets to be
managed, related accounts, account composition, pre-existing client relationship, account retention and
pro bono activities.
Use of Margin
CSA may be authorized to use margin in the management of the client’s investment portfolio. In these
cases the fee payable will be assessed gross of margin such that the market value of the client’s account
and corresponding fee payable by the client to CSA will be increased.
Additional Fees and Expenses
In addition to the advisory fees paid to CSA, clients may also incur certain charges imposed by other third
parties, such as broker-dealers, custodians, trust companies, banks and other financial institutions
(collectively “Financial Institutions”). These additional charges may include securities brokerage
commissions, transaction fees, custodial fees, fees charged by the Independent Managers, charges
imposed directly by a mutual fund or ETF in a client’s account, as disclosed in the fund’s prospectus (e.g.,
...