(Item 5) FEES AND COMPENSATION
Fees for Advisory Services
Other Investment Advisory Services and CRP Services may be provided for a fixed fee and may
include a one-time review of an existing plan or portfolio, and subsequent recommendations
concerning investment options or plan service provider changes. This fee is stated in the agreement
between the client and the Advisor, and is negotiable. The factors considered in determining the
fee include the estimated time involved, scope of the services requested, and resources utilized to
deliver services. Fixed consulting fees for Other Investment Advisory Services are typically billed
to the client upon completion of the services.
Services that include ongoing or periodic monitoring, review and/or performance reporting of
investment managers or investment options and meetings with the client or a plan’s responsible
party(ies) are provided for an annual fee based upon the market value of the plan or account assets.
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Annual fees for these services range from .25% to 1.25%, but are negotiable. When these services
are provided to fixed income portfolios, the fees will range from .10% to 1.25%, but are negotiable.
The factors considered in determining the fee include the number of managers involved, total plan
or account assets, and resources required to provide the services. These fees are billed quarterly
in arrears, and are calculated based upon the value of the plan or account assets as of the last
business day of the quarter or the average value of the plan assets during the quarter. The value
of the plan or account assets for purposes of calculating the fee is determined by the custodian or
as otherwise agreed to by the client and the Advisor in the services agreement.
Fees for CRP Services may include both a fixed fee and an annual asset based fee. Fees for CRP
Services are billed directly to the client unless the client elects and the plan allows to have the fees
billed to the Plan and deducted from Plan account(s). Fees for Other Investment Advisory Services
are typically deducted from the custody account.
Financial Planning. There is no charge for financial planning services provided by your FA. After
completion of your plan, the FA may recommend to you that you purchase products or services
from the Advisor or its affiliates to implement your plan. If you chose to implement any
recommendations by using products or services available from the Advisor or its affiliates, your
FA will receive compensation from your purchase of the products or services from the Advisor or
its affiliates. Please see “Compensation, Financial Benefits and Conflicts of Interest” below for
additional information concerning compensation and financial benefits related to our services.
Other Charges and Expenses. The fees charged for investment management services do not cover
certain charges associated with securities transactions in clients’ accounts such as brokerage
commissions, mark-ups or mark-downs. In addition, the client will pay a ticket charge for each
transaction executed for the client’s account. The amount of the ticket charge is described in the
investment management agreement between the client and Advisor. See (Item 12) Brokerage
Practices below. The fees also do not include the internal charges and fees imposed by mutual
funds and closed-end funds, unit investment trusts, exchange-traded funds (“ETF”) or real estate
investment trusts. These fees and charges include operating expenses, management fees, and
redemption fees, 12b-1 fees and other fees and expenses. These fees and charges are described in
the appropriate prospectus, offering document, or other regulatory filings concerning the
investment.
The fees do not cover custody fees that are charged to clients by the custodian. A custodian may
charge a minimum account fee. The fees do not include brokerage fees or other transaction costs.
See (Item 12) Brokerage Practices below. Clients will be charged for specific account services,
such as account transfer, fees (ACAT) and for other optional services elected by clients. Fees do
not include account service fees such as individual retirement account trustee or custody fees, tax-
qualified retirement plan account fees or termination fees for retirement accounts.
For accounts custodied at National Financial Services, LLC (“NFS”), if you incur any of the
following charges or fees, the Advisor will retain a portion of the fee charged to your account for
the services: ACAT, margin interest, bounced check, stop payment, transfer and ship (Direct
Registration System Eligible) and wire fees (except wire fees charged to IRAs).
Compensation, Financial Benefits, and Conflicts of Interest
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Investment Professional Compensation. An FA or IAR’s compensation depends upon the products
and services that the IP sells. Our compensation plans are subject to change at any time.
Compensation for an FA or IAR is based upon total fees, commissions and other revenue paid to
the Advisor for products and services the FA or IAR sells. This is referred to as the “production”.
The FA or IAR is paid a percentage of their total production each month. This is referred to as the
“pay-out rate”. An FA or IAR will receive either a fixed pay-out rate or a pay-out rate that will
increase as the FA’s or IAR’s total production increases over the compensation period. FAs or
IARs who work on a team will have a fixed pay-out rate. In this case, the pay-out rate does not
change. Members of the team determine the amount of the total pay-out each team member will
receive. An FA or IAR may also receive a fixed pay-out rate if a fixed pay-out rate is provided
for in the FA’s or IAR’s individual incentive plan. An FA or IAR receives a minimum guaranteed
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