Item 5 – Fees and Compensation
Investment Management Services
Assets Under Management Fee Schedule
First $500,000 1.20%
Next $500,000 .95%
Next $1,000,000 .75%
Next $3,000,000 .50%
$5,000,000 and higher Negotiable
In addition to paying an Advisory Fee, clients invested in Mutual Funds will bear a
proportionate amount of the operating expenses of the various funds in which they are
invested, including management fees that are paid to the funds' advisors.
The specific manner in which fees are charged by Cassaday & Company is established in the
client’s written agreement with the Firm. Cassaday & Company will generally bill its fees on
a quarterly basis in arrears. Accounts initiated or terminated during a calendar quarter will
be charged a prorated fee. Upon termination of any account, any prepaid, unearned fees will
be promptly refunded, and any earned, unpaid fees will be due and payable.
Cassaday & Company’s fees are exclusive of brokerage commissions, transaction fees, and
other related costs and expenses which shall be incurred by the client. Clients may incur
certain charges imposed by custodians, brokers, third party investment advisers and other
third parties. Such fees may include, but may not be limited to: fees charged by managers,
custodial fees, deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and
electronic fund fees, and other fees and taxes on brokerage accounts and securities
transactions. Mutual funds and exchange traded funds also charge internal management
fees, which are disclosed in a fund’s prospectus.
Such charges, fees and commissions are exclusive of and in addition to Cassaday &
Company’s fee. The Firm will not receive any portion of these commissions, fees, and costs.
Financial Planning Services
This service will be billed hourly at a rate of $145.00 to $400.00 per hour depending upon
the planner and scope of advice. Client will be billed after receiving the financial planning
advice.
Item 12 further describes the factors that Cassaday & Company considers in selecting or
recommending broker-dealers for client transactions and determining the reasonableness
of their compensation (e.g., commissions).
Client may terminate an existing contract by notifying applicant in writing at any time.
Retirement Plan Consulting Services Fee
The fee for the services may be charged either at a pre-determined hourly rate, a fixed fee or
based upon a percentage of the Plan assets. The exact fee will be negotiated in advance of
services rendered and shall be clearly set forth in the executed agreement for services
between Cassaday & Company and the Company. Fees will be billed quarterly in arrears
within 30 days of the quarter end. In special circumstances other fee paying arrangements
may be negotiated.
Fixed Fee Range: $5,000-$100,000. Based on scope of services agreed upon in engagement,
reasonable in light of geographical location, complexity of engagement, size of Plan, and
other relevant factors.
At the inception of the relationship, the Company is required to pay Cassaday & Company an
initial fixed retainer prior to services rendered. Thereafter, all such fees are payable
quarterly in arrears as invoiced. In special circumstances other fee paying arrangements
may be negotiated. Moreover, at the Company's consent, Cassaday & Company may bill out-
of-pocket expenses (such as overnight mailings, messenger, translation fees, etc.) at cost to
the Company.
Compensation for Sale of Securities
In the event that the client desires, the client can engage certain of Cassaday & Company’s
representatives, in their individual capacities, as registered representatives of Royal, an SEC-
registered and FINRA member broker-dealer, to implement investment recommendations
on a commission basis. In the event the client chooses to purchase investment products
through Royal, Royal will charge brokerage commissions to effect securities transactions, a
portion of which commissions Royal shall pay to Cassaday & Company representatives, as
applicable. The brokerage commissions charged by Royal may be higher or lower than those
charged by other broker-dealers. In addition, Royal, as well as Cassaday & Company’s
representatives, relative to commission mutual fund purchases, may also receive additional
ongoing 12b-1 trailing commission compensation directly from the mutual fund company
during the period that the client maintains the mutual fund investment.
With certain of Cassaday & Company’s representatives, Royal has established forgivable and
repayable loans, which constitute additional economic benefits (“Forgivable Loans”) for such
individuals. The terms of the Royal Forgivable Loans require that each applicable recipient
remains affiliated with Royal for a specified period of time and meets certain sales
production requirements in order to qualify for loan forgiveness. The Forgivable Loans
incentivize such representatives to remain affiliated with Royal in their separate and
individual capacities as registered representatives. The receipt of Forgivable Loans therefore
presents conflicts of interest, because Cassaday & Company’s representatives are
incentivized to recommend that clients utilize Royal for brokerage and custodial services in
order to meet the production requirements necessary for loan forgiveness, rather than
basing such recommendations on a client’s particular needs. Without limiting the foregoing,
the Forgivable Loans incentivize certain of Cassaday & Company’s representatives to
recommend that existing clients keep their assets custodied at Royal, that existing clients
execute commission transactions through Royal, and also that new clients move their assets
to Royal for receipt of such custodial and brokerage services. Clients are therefore reminded
...