Sage Advisory Services Ltd Co

Item 5 – Fees & Compensation

Sage is compensated by receiving a mutually agreed upon       address such conflicts of interest. Further, investment
percentage of the assets under management or by               performance return dispersion is reviewed regularly by
receiving a fixed fee.                                        Portfolio Managers, the Systems and Operations
                                                              Department and Compliance to reasonably ensure
Investment Management Fee                                     certain clients are not favored over other clients.

Calculation & Payment Procedure                               When providing investment management services to
Sage manages accounts for a variety of individual and         employers sponsoring defined contribution plans with
institutional clients on a discretionary and/or non-          participant-directed investments, Sage will invoice
discretionary basis, subject to the investment guidelines     clients directly or as expressly directed by the plan
contained in their respective client agreement.               sponsor in the investment management agreement.
• The amounts and specific manner in which fees are
   charged is negotiated and memorialized in each             Investment Management Fee
   client’s agreement with Sage.
• Sage does not deduct fees from client accounts.
                                                              Schedules
• Sage invoices clients directly.                             Sage’s standard fee schedules (including those for its
• Sage generally invoices clients in advance on a             Model Provision ETF and Wrap Program account clients)
   quarterly basis and will also invoice in arrears or        are provided below. However, in some instances, Sage
   prorate fees for capital contributions and                 will negotiate from its standard fee schedule, or waive
   withdrawals.                                               fees, based upon the circumstances. Sage maintains
• Accounts initiated or terminated during a calendar          investment, trade allocation and account valuation
   quarter will be charged a prorated fee.                    policies and procedures designed to address potential
• On the termination date of an account, any prepaid,         conflicts of interest related to the fact that clients pay
   unearned fees will be promptly refunded and earned,        varying fees.
   unpaid fees will be due and payable.
• Sage’s client agreement typically requires 30 days’                         Fixed Income Strategies
   notice for termination.
                                                                                    Cash Duration
Sage uses account market values to calculate investment                        .20 of 1% to $10 Million
performance and client fees, where applicable. Sage                            .15 of 1% to $15 Million
uses pricing information provided by Bloomberg
Valuation Services (”BVAL”) to value client portfolios. In                   Negotiable over $25 Million
instances where Sage is unable to determine a price for
                                                                                 Laddered Strategies
a security or determines a price received from BVAL is
not reflective of fair market value, Sage will determine a                       .20 of 1% for balance
fair value for that security according to the methodology
outlined in Sage’s Portfolio Valuation Policy.
                                                                                    Short Duration
There are inherent conflicts of interest when Sage                                Moderate Duration
values client accounts, as higher security prices increase                      Intermediate Duration
market values, thereby enhancing performance results                                Core Duration
and increasing fees. In addition, because clients pay                               Long Duration
different fees based on differing fee schedules or the                         .35 of 1% to $10 Million
size of the account, Sage has an incentive to favor those                   .25 of 1% on next $15 Million
accounts where it earns the highest fees. Sage maintains                    .20 of 1% on next $25 Million
investment, trade allocation and account valuation
(including fair valuation) policies and procedures to                        Negotiable over $50 Million

            5900 Southwest Parkway | Building 1 | Austin, TX | 78735 | 512.327.5530 | www.sageadvisory.com         8

       Fixed Income Strategies (continued)                   Sage’s advisory fees are negotiated separately with each
                                                             Sponsor Firm and will vary from wrap program to wrap
          Liability Driven Investment (LDI)                  program. Further, the fees paid to Sponsor Firms by
          Management (6+ Years Duration)                     clients participating in wrap programs will vary and Sage
                 High Yield Portfolios                       does not have control or influence over the fees charged
                                                             to clients by Sponsor Firms. Lastly, in some cases
               .40 of 1% to $10 Million
                                                             Sponsor firms may obligate Sage to participate in a
            .35 of 1% on next $15 Million
                                                             Revenue Sharing arrangement or other contractual
            .25 of 1% on next $25 Million
                                                             platform fees for a specified portion of the Sage
             Negotiable over $50 Million                     investment advisory fee to cover marketing support and
                                                             other platform services.
                   ETF Strategies
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