ITEM 5 – FEES AND COMPENSATION
The Firm and/or your Advisor are compensated in several ways. We want to ensure that you understand how we, as a Firm, and our
Advisors are compensated, as well as the other costs associated with your account. Here are a few important facts about the fees and
costs associated with your account:
Cetera will typically earn compensation for managing these accounts by charging you an advisory fee. This fee is called an “assets under
management” (AUM) fee. Essentially, this means that on a quarterly basis, we will charge you a fee that is calculated as a percentage of
the market value of the assets held within your advisory account.
Fees associated with the wrap programs sponsored by our firm and co-sponsored by related firms are described in the appropriate
program’s Appendix 1 wrap brochure as described in Item 4.
Advisory Fee Schedules
Prime Fee Schedule
Account Size Maximum Annual Fee
First $0 – $250,000 2.75%
Next $250,001 – $500,000 2.50%
Next $500,001 – $1,000,000 2.00%
Next $1,000,001 – $2,500,000 1.75%
Next $2,500,001 – $5,000,000 1.50%
Next $5,000,001 – Over 1.25%
In addition to the AUM fee, if you close a Prime Account within the first year, you will pay a separate administrative fee of $200. Although
you do not pay a transactions charge for the purchase and sale of securities in a Prime account, you should be aware your Advisor pays
us transaction costs for those transactions. Because your Advisor pays the transaction costs in a Prime Account, there is a conflict of
interest as the Advisor has an incentive to recommend fewer transactions in an account than may have been made if the Advisor was
not subject to these costs. Clients should understand that the cost to your Advisor for transactions is a factor that your Advisor considers
when deciding which securities to select and how frequently to place transactions in a Prime account.
Preferred Fee Schedule
Account Size Maximum Annual Fee
First $0 – $250,000 2.50%
Next $250,001 – $500,000 2.25%
Next $500,001 – $1,000,000 1.75%
Next $1,000,001 – $2,500,000 1.50%
Next $2,500,001 – $5,000,000 1.25%
Next $5,000,001 – Over 1.00%
You will also be responsible for any transaction costs associated with purchasing securities in a Preferred Account. Your executed
advisory services agreement lists the transaction costs associated with your account. With the exception of ERISA accounts, we mark
up the transaction costs that our clearing firm charges us as well as those that are not charged to us (“$0-based Pershing charges”),
which is a source of additional revenue. The more transactions a client enters into, the more compensation the Firm receives. The Firms’
transaction charges in non-ERISA accounts represent a conflict of interest due to the fact that we have a financial incentive to establish a
Preferred Account because of the additional revenue we receive. This compensation, however, is retained by the Firm and is not shared
with your Advisor, so your Advisor does not have a financial incentive to recommend that you open a Preferred Account or engage in
frequent transactions.
In addition to the assets under management fee, if you close a Preferred Account within the first year, you will pay a separate administration
fee of $200.
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Premier Fee Schedule
Account Size Maximum Annual Fee
First $0 – $250,000 2.75%
Next $250,001 – $500,000 2.50%
Next $500,001 – $1,000,000 2.00%
Next $1,000,001 – $2,500,000 1.75%
Next $2,500,001 – $5,000,000 1.50%
Next $5,000,001 – Over 1.25%
In addition to the AUM fee, if you close a Premier Account within the first year, you will pay a separate administration fee of $200.
Advisor Select Fee Schedule
While fees are negotiable, the maximum fee allowable is 3.00%.
You will also be responsible for any transaction costs associated with purchasing securities in an Advisor Select Account.
With the exception of ERISA accounts, we mark up the transaction costs that our clearing firm charges us as well those that are not
charged to us (“$0-based Pershing charges”), which is a source of additional revenue. The more transactions a client enters into, the more
compensation the Firm receives. The Firms’ transaction charges in non-ERISA accounts represent a conflict of interest due to the fact that
we have a financial incentive to establish an Advisor Select Account because of the additional revenue we receive.
Please refer to your executed advisory services agreement for the transaction costs associated with your account.
Transaction costs are the costs associated with purchasing or selling securities.
In the Advisor Select Program, any transaction charges are paid by you. Alternatively, Advisor Select may be offered as a wrap fee
program wherein your Advisor agrees to pay any transaction program fees. Your Advisor has an incentive to open a non-wrap fee
program version of Advisor Select based on high expected or anticipated trading volume in order to maximize their investment advisory
compensation. For both versions of Advisor Select, other brokerage account fees will be charged when applicable.
In addition to the asset-based fee in the non-wrap fee program version of Advisor Select, you will also be charged the following fees for
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