Item 5 Fees and Compensation
PORTFOLIO MANAGEMENT SERVICES
The annual fee for portfolio management services under the strategies that we offer below will be
charged as a percentage of assets under management, according to the following schedule:
1) Growth/Conservative Growth:
Assets Under Management Annual Fee (%)
Under $250,000 1.6%
$250,001 - $500,000 1.2%
$500,001 - $1,000,000 0.90%
$1,000,001 - $1,500,000 0.70%
Over $1,500,000 0.60%
*The management fee is a blended tier. For example, for assets under management of $2,500,000, a
client would pay1.60%on the first $250,000, 1.20% on the second $250,000, 0.90% on the next
$500,000, 0.70% on the next $500,000, and 0.60% on the remaining balance. The quarterly fee is
determined by calculating 25% of the annual fee each quarter.
2) Income:
0.50% of assets under management. Clients will be invoiced, or their account directly debited, as
authorized, in arrears at the beginning of each calendar quarter based upon the value (market value or
fair market value in the absence of market value), of the client's account at the end of the previous
quarter.
We require a minimum account size of $250,000 of assets under management for this service. This
minimum account size and the above fee schedule may be negotiable under certain circumstances. As
appropriate, when the client's account includes assets managed under both the Growth/Conservative
and Income strategies, the fee charged on the assets under each strategy will be in accordance with
the above fee schedule or as negotiated with the client.
Limited Negotiability of Advisory Fees: Although Phillips Ray Capital Management has established
the aforementioned fee schedule(s), we retain the discretion to negotiate alternative fees on a client-by-
client basis. Client facts, circumstances and needs will be considered in determining the fee schedule.
These include the complexity of the client, assets to be placed under management, anticipated future
additional assets; related accounts; portfolio style, account composition, reports, among other factors.
The specific annual fee schedule will be identified in the contract between the adviser and each client.
We may group certain related client accounts for the purposes of achieving the minimum account size
requirements and determining the annualized fee.
Discounts, not generally available to our advisory clients, may be offered to family members and friends
of associated persons of our firm.
PORTFOLIO CONSULTING / CONSULTING SERVICES FEES
Phillips Ray Capital Management's Consulting Services fee will be determined based on the nature of
the services being provided and the complexity of each client’s circumstances. All fees are agreed upon
prior to entering into a contract with any client.
Consulting fees are charged at the rate of .50% annually, billable on a calendar quarter basis based on
the closing statement value at the end of each quarter. Consulting fees are charged on a quarterly basis
in arrears, or at a time agreed upon by Phillips Ray Capital Management and the client.
NON-DISCRETIONARY PERFORMANCE-BASED FEES
There is no advisory fee charged for non-discretionary consulting services, however a performance fee
may be charged. See Item 6 and the non-discretionary consulting advisory agreement for additional
details.
GENERAL INFORMATION
Termination of the Advisory Relationship: A client agreement may be canceled at any time, by either
party, for any reason upon receipt of 30 days written notice. As disclosed above, certain fees may be
paid in advance of services provided. Upon termination of any account, any prepaid, unearned fees will
be promptly refunded. In calculating a client’s reimbursement of fees, we will pro rate the reimbursement
according to the number of days remaining in the billing period.
Mutual Fund Fees: All fees paid to Phillips Ray Capital Management for investment advisory services
are separate and distinct from the fees and expenses charged by mutual funds and/or exchange-traded
funds (ETFs) to their shareholders. These fees and expenses are described in each fund's prospectus.
These fees will generally include a management fee, other fund expenses, and a possible distribution
fee. If the fund also imposes sales charges, a client may pay an initial or deferred sales charge. A client
could invest in a mutual fund directly, without our services. In that case, the client would not receive the
services provided by our firm which are designed, among other things, to assist the client in determining
which mutual fund or funds are most appropriate to each client's financial condition and objectives.
Accordingly, the client should review both the fees charged by the funds and our fees to fully understand
the total amount of fees to be paid by the client and to thereby evaluate the advisory services being
provided.
Additional Fees and Expenses: In addition to our advisory fees, clients are also responsible for the
fees and expenses charged by custodians and imposed by broker dealers, including, but not limited to,
any transaction charges imposed by a broker dealer with which an independent investment manager
effects transactions for the client's account(s). Please refer to the "Brokerage Practices" section (Item
12) of this Form ADV for additional information.
Advisory Fees in General: Clients should note that similar advisory services may (or may not) be
available from other registered (or unregistered) investment advisers for similar or lower fees.