Item 5 - Fees and Compensation
A. DESCRIPTION OF COMPENSATION AND BASIC FEE SCHEDULE
MS ADVISORS generally receives asset-based advisory fees; however and at the Client’s request,
we may also receive Fixed Fees. The specific manner in which fees are charged by MS ADVISORS
is established in each Agreement.
Advisory fee compensation is derived as fee income based upon the percentage of assets under
management. The annualized advisory fee is based on the following fee schedule:
Annual Assets Under Management
Management Fee
1.00% Up to $1mm
0.70 % $1mm up to $5mm
0.60 % $5mm up to $15mm
0.50 % $15mm up to $25mm
Negotiable Above $25mm
Advisory Fees may be individually negotiated with each client.
Advisory fees are payable quarterly, in arrears, based on the value of assets under management
as of the last day of each calendar quarter (adjusted for contributions and withdrawals made
during the quarter). Investment advisory services begin on the effective date of the Agreement.
If the Agreement for services is executed at any time other than the first day of a calendar month,
our fees will apply on a pro-rata basis. MS ADVISORS may, in its discretion, waive or reduce the
management fee with respect to any Client. Our fees may also be negotiable; therefore,
arrangements with existing clients may differ. In all such cases, the relevant fees andterms of
payments will be clearly set forth in the Agreement.
We will deduct our fee directly from your designated custodial account through the qualified
custodian holding your funds and securities. We will deduct our advisory fee only when (1) you
have given our firm written authorization permitting the fees to be paid directly from your
account and (2) the qualified custodian has agreed to deliver an account statement to you at
least quarterly. These account statements will show all disbursements from your account,
including the amount of any advisory fees paid directly to our firm. You should review all
statements for accuracy. We will also receive a duplicate copy of your account statements. Refer
to the Brokerage Practices section below for additional disclosures.
B. OTHER FEES AND PAYMENT OF FEES
Unless you participate in our Wrap Fee Program, you will also be charged brokerage
commissions, transaction fees, custodian fees and custodian charges, and other costs and
expenses related to your investment account and securities transactions, in addition to, and
exclusive of, our investment advisory fees disclosed above. These transaction charges are paid
to, and retained by, the account custodian for its clearance and execution services. MS Advisors
does not receive any portion of these commissions, fees, or costs.
As part of our investment advisory services to you, we may invest, or recommend that you invest,
in shares of registered investment companies, exchange traded funds ("ETFs"), hedge funds,
and/or other specialty investments. You should be aware that such companies/investments
typically assess a management fee to investors and, in certain cases, may charge administrative,
servicing and/or other fees, including performance fees. Any fees paid to such companies or their
affiliates are separate and in addition to our advisory fees, which are disclosed in a fund’s
prospectus.
Clients should therefore be aware that they would be paying a higher fee on these assets. To fully
understand the total cost you will incur, you should review all the fees charged by our Firm,mutual
funds, exchange traded funds, and others.
E. Refund and Termination Policy
Our agreement for services will continue in effect until terminated by either party. You may
terminate the Agreement upon written notice to our Firm and you are responsible for payment
of services rendered until such time. You will incur a pro-rata charge for services rendered prior
to the termination of the Agreement, which means you will incur advisory fees only in proportion
to the number of days in the month for which you are a Client.
You may cancel the Agreement without penalty within the first five days of signing the
Agreement. MS ADVISORS does not require the prepayment of fees. As such, MS ADVISORS does
not refund fees upon termination of the Agreement.
F. Selection of Other Advisers
Assets managed by TPMMs will be included in calculating our advisory fee, which is based on the
fee schedule set forth in the Portfolio Management Services section in this brochure. Sub-
Advisory fees that we pay to the TPMM are established and payable in accordance with thesub-
advisory agreement between MS ADVISORS and each TPMM.
G. Compensation for the Sale of Securities or Other Investment Products
Persons providing investment advice on behalf of our firm may be registered representatives of
a broker-dealer, including but not limited to Insigneo Securities, LLC (ISLLC), a securities broker-
dealer, and a member of FINRA and SIPC. In their capacity as registered representatives, these
persons may receive commission-based compensation in connection with the purchase and sale
of securities, including 12b-1 fees for the sale of investment company products. Compensation
earned by these persons in their capacities as registered representatives is separate and in
addition to our advisory fees. This practice presents a conflict of interest because persons
providing investment advice on behalf of our firm who registered representatives are have an
incentive to effect securities transactions for the purpose of generatingcommissions rather than
solely based on your needs. You are under no obligation, contractuallyor otherwise, to purchase
...