5. Fees and Compensation
The specific manner in which fees are charged by MMC Securities is established in a client’s
written agreement. The types of fee arrangements applicable to project based services and
ongoing services are as follows:
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Fixed fees;
Fixed fees offset by commissions and/or 12b-1 payments;
Asset-based fees;
Asset-based fees offset by commissions and/or 12b-1 payments; and
Commissions and/or 12b-1 payments.1
Generally, fees are due and payable as earned or quarterly in arrears and billed to clients
through invoices in arrears. In addition, MMC Securities also bills clients for necessary
travel and other expenses related to the services requested. The adviser fee charged is
calculated as described in this Item 5, depending on the nature of the assignment, and is not
charged on the basis of a share of capital gains realized from, or capital appreciation of, a
client's retirement plan's funds. MMC Securities does not collect client fees in advance.
Upon termination, any unearned fees that have already been paid will be promptly refunded to
the client. The portion of the fee refunded will be determined by either the percentage of the
project completed or time spent on the project. MMC Securities will be entitled to payment of all
fees and reimbursement of expenses incurred through the effective date of termination.
MMC Securities fees are exclusive of fees charged by plan vendors and other plan service
providers (except for commissions and/or 12b-1 payments used to offset the MMC Securities’
fee, or amounts paid out of reimbursement accounts used to pay the MMC Securities’ fee).
Clients should review and consider the fees charged by MMC Securities, as well as the fees
charged by any plan vendor or service provider (e.g., investment companies, insurance
companies, transfer agents, custodians, and administrators) to evaluate the adviser service that
MMC Securities is providing. A client may choose not to implement any or all of the
recommendations for its employee benefit plan.
All fees paid to MMC Securities for retirement and other employee benefit plan consulting
services are separate and distinct from the fees and expenses charged by mutual funds to
their shareholders or similar fees charged by insurance companies to variable product
contract holders. These fees and expenses are described in each mutual fund, or variable
product prospectus. These fees will generally include a management fee, other expenses (e.g.,
administrative and insurance expenses), and a possible distribution fee (e.g., 12b-1 fees). If a
mutual fund or an insurance company also imposes sales charges, a client may pay an
initial or deferred sales charge. MMC Securities’ services are designed, among other matters,
to assist a client in determining investments appropriate to the client’s employee benefit plan's
structure. The client and MMC Securities may agree, in certain instances, that commissions
or 12b-1 payment be directed to MMC Securities at the direction of the client and be used to
In certain cases, a Client and MMC Securities may agree that asset-based fees are completely offset by commissions
and/or 12b-1 payments so that the net payments to MMC Securities are commissions and/or 12b-1 payments only.
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offset the client's adviser fee payable to MMC Securities.
a. Fee Schedule
Fixed fees:
certain retirement and other employee benefit plan consulting projects may be
based on an hourly rate generally between $200 and $500 per hour, depending
upon the complexity of the issues involved;
one-time retirement and other employee benefit plan consulting projects
generally range between $10,000 and $100,000 per plan, depending the size of the
plan and the complexity or depth of the project; and/or
ongoing retirement and other employee benefit plan consulting services (e.g.,
periodic market reviews) generally range between $5,000 and $100,000, depending
the size of the plan and depth of the project.
Asset based fees for retirement and other employee benefit plan consulting,
are generally as follows, depending on the complexity and depth of the
assignment:
for total plan assets up to $10 million, an annual fee not to exceed one percent
(1%) of plan assets;
for total plan assets above $10 million to $20 million, an annual fee not to exceed
.75% of plan assets;
for total plan assets above $20 million to $50 million, an annual fee not to exceed
.50% of plan assets;
for total plan assets above $50 million to $100 million, an annual fee not to exceed
.30% of plan assets, and/or
for total plan assets above $100 million, an annual fee not to exceed .20% of
plan assets.
These asset based fees are not performance based. Instead, they reflect the value of a
retirement plan's assets so that any loss or depreciation in the total assets of a client’s
plan ultimately reduces the fee. Asset-based fees are typically calculated based upon the market
value of the assets on the last business day of the previous quarter as reported on the account
statements prepared by plan product vendors.
The foregoing fee schedule represents the fee rates MMC Securities generally charges for
retirement plan consulting. Fees are, however, negotiable, and arrangements with any particular
client may differ from the rates described herein or compared to other clients.
b. Commission Based Income
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