ITEM 5 – FEES AND COMPENSATION
Fund Asset Allocation Program Fees and Compensation
As a participant in the Program, the Client pays an annualized fee (the “Program Fee”).
The Program Fee reflects charges for our services, and any services provided by the
Overlay Manager, including each party’s agents and affiliates (collectively, the “Program
Fee”). The Program Fee also includes any fees of the Account Administrator for
custodial and execution services, with respect to the amount of assets allocated to each
Model Portfolio.
Notwithstanding the foregoing, the Program Fee may not include any separate fees or
charges of the Account Administrator (for example wire or transfer fees). Any such
separate fees or charges of the Account Administrator are set forth in a separate
Prospectus or Agreement executed between each Advisor Client and the Account
Administrator. There are no redemption/exit fees or transaction fees charged by the
Program.
In addition to Program Fees, Advisors will also charge Clients an Advisory Fee for their
services. The Advisory Fee is independent of the Program Fee. The Advisory Fee is
determined under a separate agreement between the Advisor Client and the Advisor. If
the Model Portfolio includes mutual funds and/or ETFs the Advisor Client may also bear
certain charges imposed by third parties in connection with investments made in line with
the Model Portfolio recommendations, including but not limited to mutual fund 12(b)-1
distribution fees, servicing fees, sub-accounting fees, management fees, and IRA and
Qualified Retirement Plan fees. It is understood that fees paid to fund managers by
mutual funds or ETFs are deducted from each fund’s net asset value and as such shall be
an indirect expense. The fees charged to an Advisor Client Account may be higher than
fees charged by other investment advisors for similar services. Mutual funds and/or ETFs
can be purchased directly without participation in the Program. A complete explanation
of the expenses charged by each mutual fund is contained in the prospectus for each fund,
ETF. These fees are independent of the Program Fee and should be disclosed by the
Account Administrator.
The Program Fee is based on an annual percentage of assets managed by Advisors of the
Program under management that is calculated and billed quarterly in arrears. The
Program Fee will be based on the market value of the account on the last day of the
calendar quarter and will cover the period from the first day of the calendar quarter
through the last day of the calendar quarter. For Accounts established and/or terminated
mid-quarter, the billing period will be from the first day assets transfer into the Account
through the last day of management on the Account. The market value will be determined
as reported by the Account Administrator. The Account Fee is assessed on all the assets
under management, including securities, cash and money market balances.
If, for any reason, the Account value falls below an Advisor’s required minimum account
balance, or the minimum account balance required by the Overlay Manager, the Advisor
or Overlay Manager has the right to terminate management of the Account. In addition,
Client may terminate the Account at any time without penalty.
The Program Fee will generally follow the 0.15% LSA TPM fee and a .20% Overlay
Manager fee. The Program Fee schedule of assets under management is a flat rate of
.35% for assets $25,000 and above.
The above flat fee the Program Fee may also be negotiated and charged as a flat fee,
subject to approval by each Advisor and the Overlay Manager.
Minimum Account size is $25,000. The Account minimum may be subject to waiver or
negotiation, provided however, any such decision regarding waiver or negotiation is in
the sole discretion of the Overlay Manager.
By participating in the Program, each Advisor Client authorizes the quarterly debiting of
Program Fees by the Overlay Manager or its agent, as indicated in each Advisor Client
agreement. If an Advisor Client’s agreement is terminated, a prorated Program Fee will be
calculated based on the number of days the Account was managed under the selected Model
Portfolio(s) during the quarter and deducted accordingly from the Account. Payment of fees
may result in the liquidation of some securities if there is insufficient cash in the Account.
Retirement Plan Advisory Services
For Retirement Plan Advisory Services compensation, we charge an annual fee as
negotiated with the client and disclosed in the Investment Advisory Agreement. The
compensation method is explained and agreed upon in advance before any services are
rendered. Fees are up to 0.10% annually.
For retirement plan clients, LSA TPM, LLC’s sole compensation is the 3(38) asset-based
advisory fee disclosed in the Investment Advisory Agreement. LSA does not receive soft
dollars, revenue sharing, 12b-1 fees, sub-transfer agency fees, or any other third-party
compensation.
Plan advisory services begin with the effective date of the Agreement, which is the
date you sign the Investment Advisory Agreement. For that calendar quarter, fees
will be adjusted pro rata based upon the number of calendar days in the calendar quarter
that the Agreement was effective. Our fee is billed in arrears on the last business
day of the calendar quarter. Invoices are sent out each quarter to either the client or the
custodian of the Plan. For Plans where our fee is billed to the custodian, the fee is
deducted directly from the participant accounts. Written authorization permitting us
to be paid directly from the custodial account is outlined in the Investment Advisory
Agreement.
Either party may terminate the Agreement at any time upon 30 days written notice. You
are responsible to pay for services rendered until the termination of the agreement.