Item 5 - Fees and Compensation
Advisory services are generally provided on a wrap fee basis that the client can elect to pay quarterly based on the market
value of the account assets as of the last business day of the previous quarter. In some instances, Morgan Keegan
provides its described services, in whole or in part, in return for the reimbursement by the client of the Firm’s “out-of-
pocket” expenses incurred in providing such services.
Clients should discuss with the financial advisor whether cost savings could be achieved by converting to a fee basis or
utilizing a commission structure for an account. The wrap fee is one annual fee, assessed quarterly, covering portfolio
management, transaction costs, manager searches, ongoing due diligence, and performance reviews.
Additionally, the wrap fee will cover the receipt of:
∙ Monthly consolidated account statements
∙ Investment plan development and implementation
∙ Asset allocation advice
∙ Ongoing evaluation of portfolio performance
∙ Quarterly reviews
∙ Access to account information through morgankeegan.com
∙ Access to equity research as published on the Morgan Keegan website.
Fee calculations for billing purposes will be based on the account’s billable market value (absolute value of securities and
positive cash), which would include securities purchased on margin or sold short. Margin balances (debits) will not reduce
the billable market value.
Fees charged will be based of a share of capital gains or capital appreciation of account assets as permitted by the
Investment Advisers Act of 1940. The fee is based upon account value. When the account value increases, the dollar
value of the fee will increase as well based on the agreed fee percentage stated in the advisory agreement.
Morgan Keegan employees and their related accounts may receive some or all of the services described herein for a
lesser fee than a client may be charged.
Revised August 20, 2013 7
It should be understood by the client where the client instructs the portfolio manager, whether it is a third-party manager or
managed internally by Morgan Keegan, to execute securities transactions through Morgan Keegan, the portfolio manager
may not have the authority to negotiate transactional costs or obtain volume discounts. As a result, transactions in such
accounts may result in higher transactional costs, greater spreads or less favorable net prices. When block orders are not
executed in total, Morgan Keegan attempts to allocate executed trades on a basis that will be fair to clients over time.
The wrap fee does not include: (i) certain annual account fees or other administrative fees, such as wire fees, charged
by Morgan Keegan, (ii) underwriting or dealer concessions or related compensation in connection with securities
acquired in underwritten offerings; (iii) certain odd-lot differentials, transfer taxes, transaction fees mandated by the
Securities Act of 1934, postage and handling fees, and charges imposed by law with regard to transactions in the client’s
account; and (iv) advisory fees and expenses of mutual funds (including money market funds), closed-end investment
companies or other managed investments, if any are held in the client’s account.
When Morgan Keegan acts as the client’s agent in purchasing securities (except in purchases in underwritten offerings
other than for open-end mutual funds), the client should be aware the wrap fee does not cover certain costs associated
with securities transactions in the over-the-counter market where Morgan Keegan must approach a dealer or market
maker to purchase or sell the security. Such costs include a markup, markdown, spread, odd lot differentials or transfer
taxes imposed by law.
If a client transitions a brokerage account to a fee based advisory relationship, they will not receive credit for the
commissions paid under the previous retail relationship.
Unless the client elects these fees should be credited to their account during account opening, annual marketing or
distribution fees payable to Morgan Keegan by a mutual fund, variable annuity, or other investment company (“12b-1
Fees”) will be a revenue stream to Morgan Keegan, in its capacity as a broker-dealer, and to its financial advisors. In an
ERISA account such as a 401(k), or 403(b) plan, the 12b-1 fees will be paid to the plan sponsor to offset the costs of the
plan and will not be revenue for Morgan Keegan.
Financial advisors of Morgan Keegan are registered as broker-dealer agents of Morgan Keegan and as insurance agents
or brokers for certain insurance companies. Recommendations may be limited to those products offered by Morgan
Keegan and these companies.
Margin in Investment Advisory Accounts
The use of margin is permitted in certain investment advisory programs. A margin debit balance does not reduce the
market value of eligible program assets. Using margin in an investment advisory account will increase your wrap fee. If
you use margin to purchase additional securities, your total value of eligible program assets increases, as does your wrap
fee. In addition, you will be charged margin interest on the debit balance in your account. The increased wrap fee you pay
may provide an incentive for the financial advisor to recommend the use of margin.
Please note using margin is not suitable for all investors. The use of margin increases leverage in your account and
therefore increase its risk. Please see the “Margin Disclosure Statement,” as well as the other provisions of the “New
Account Client Agreement and Disclosure Statement,” for more details on the risks of margin use. In addition to
understanding and assuming the additional principal risks associated with the use of margin, clients authorizing margin
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