Item 5: Fees & Compensation
Description of Advisory Fees & How We Are Compensated
We are entitled to asset-based management fees from the Preferred Income Funds and Managed Accounts. The Managing
Members, our affiliates, receive performance-based compensation from certain classes of the Preferred Income Funds, as
the case may be. Our fees and compensation are described in our clients' Governing Documents.
Fee Negotiation Availability
All LDR client fees are subject to negotiation. While we seek to facilitate advantageous agreements for clients, to the extent fees
are negotiable, some clients may pay higher (more) or lower fees (less) than others for services depending on factors such as
total assets under management, the number of related investment accounts, inception date, or other considerations, than if they
had contracted directly with another provider. Lower fees for comparable services can sometimes be available from different
sources, so clients must understand the fees they pay for our services.
At our discretion, we may enter into agreements with one or more LDR Fund investors or clients providing for waiving or
modifying the management fee or performance-based compensation terms without notice to the other LDR Fund investors or
clients.
Regardless of fee negotiation availability, a client will not be required to pre-pay an LDR advisory fee more than six months in
advance in excess of $1,200.
Management Fees
The fees that follow reflect our typical fee terms. Clients or prospective clients should consult the Governing Documents and
their Agreement for complete details.
The LDR Funds
The Preferred Income Funds management fee is calculated and accrues monthly based on a percentage of the net asset
value of each Preferred Income Fund as of the beginning of each calendar month. The Preferred Income Funds' management
fees are paid quarterly in arrears and are deducted directly from the assets of the Preferred Income Funds. Such fees range
from 0.60% to 1.50%. A complete description of our compensation arrangements is outlined in each Preferred Income Fund's
Governing Documents. Please consult the Fund’s Governing Documents for full details.
The Managed Accounts
Managed Accounts management fees are calculated and accrue monthly or quarterly based on a percentage of assets
under management as of each calendar month's last day of trading. The fees range from 0.125% to 1.15% and are subject to
proration for partial periods. Generally, the Managed Account management fees are paid either monthly or quarterly in arrears.
Management fees for the Managed Accounts are invoiced to and paid by such clients. Clients may choose to have the fees
directly debited from the account assets held at their custodian or billed directly to them by LDR. (See "Item 15: Custody" for
additional details.)
The final fee structure can be found in the Agreement between LDR and each Managed Account. If, for any reason, a client
wishes to terminate their Agreement with us within the first five business days after Agreement execution, the client will be
entitled to a full refund of any fees paid under the contract. After that, the client or Adviser may terminate services at any time
by notifying in writing following the agreed-upon termination provisions reflected in their Agreement. In all cases, clients are
responsible for paying all their state and local taxes and will reimburse LDR for any expenses advanced on their behalf (as
applicable).
The Mutual Fund
LDR receives a fee from the World Funds Trust (not the Mutual Fund) computed and accrued daily and paid monthly at an
annual rate of 0.90% of the Mutual Fund's average daily net assets. The World Funds Trust pays management fees for the
Mutual Fund, which are not deducted from the Mutual Fund. In some cases, LDR may agree to waive all or a portion of such
management fees so that the annual Mutual Fund operating expenses do not exceed a certain predetermined percentage of
the Mutual Fund's average daily net assets.
Agreement Terminations & Fee Payment Refunds
Terminations can be made to LDR Agreements without penalty within five (5) business days after the Agreement execution
date. After that, the contracts between LDR and the client will continue and be terminated according to the Agreement’s
provisions. Terminations become effective on receipt of such notice and will not affect:
• the validity of any action previously taken by the Adviser under the Agreement,
• liabilities or obligations of the parties from transactions initiated before termination of the Agreement, or
• the client's responsibility to pay management and other fees due, pro-rated through the termination date.
Any fees collected in advance for services not yet rendered will be refunded, pro-rata, according to the remaining days left in
the billing period.
If the client is a natural person, the client's death, disability, or incompetency will not terminate or change the terms of an
Agreement. However, the client's executor, guardian, attorney-in-fact, or another authorized representative may terminate the
client's Agreement by providing written notice to us. Before termination, all directions given or actions taken or omitted by the
Adviser before the effective Agreement termination shall be binding upon the client and any successor or legal representative.
Upon the termination of the Agreement, LDR will not be obligated to recommend or take any action concerning the securities,
cash, or other investments covered by the Agreement and will no longer be entitled to receive fees from the termination date.
Clients should refer to their Agreement for complete details.
Performance-Based Compensation
The LDR Funds
The Managing Member receives performance-based compensation from certain classes of the Preferred Income Fund,
which is 10%. Such performance-based compensation is calculated on a percentage of the net capital appreciation for the
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