Item 5. Fees and Compensation
1. SCM – AMAs
This fee arrangement will include transaction charges, if applicable, for trades executed in Advisory Client’s AMA.
Portfolio Value Maximum Fee
First $100,000 - $500,000 2.20%
Next $500,000 1.90%
Next $1,000,000 1.60%
Next $3,000,000 1.30%
Over $5,000,000 1.20%
Pershing and Charles Schwab Transaction Charges.
Stocks and Exchange Traded Funds: $0
Options (1): $0, plus $.65/contract
Fixed Income and Bonds $45
Unit Investment Trusts: $35
Mutual Funds (2):
Pershing or Schwab Non-Transactions Funds (3) $0
Load & No-Load Funds (4) $24
Exchange (same fund company)(5) $5
Exchange (different fund company) $24
Periodic Investment Plan (PIP) or Systemic $0
Withdrawal Plan (SWP)(5)
(1) Options activity is limited to purchasing puts/calls and covered writing
(2) Any additional fees charged by a mutual fund company will be paid by the advisor
(3) Choose from a variety of funds at NAV without incurring trade fees. Initial minimum purchase of $2,500 per
transaction in non-qualified accounts and a $500 purchase minimum for subsequent investments. Initial and
subsequent purchase minimums of $500 within retirement accounts. Redemptions within 6 months will incur a $50
short term redemption fee.
(4) B and C share mutual fund trades incur an additional $8.95 service charge.
(5) Exchanges within the same mutual fund company is available at Pershing only. Exchanges within the same mutual
fund company are subject to applicable trade fees at Schwab.
Minimum Account Annual Fee: $125
Pershing (Additional information)
Redemptions in Mutual funds within 6 months will incur a $50 short term redemption fee. Exchanges within the same mutual
fund company and the Periodic Investment Plan, “PIP” and Systematic Withdrawal Plan, “SWP” program is available at no
cost. Mutual Fund Conversions totals $2. $1 on the sell side and $1 on the buy side. Conversions are a nontaxable event.
Fixed Income Redemption Fee; $5
SCM’s fees can be higher than fees normally charged in the industry and that other investment advisers may provide the same
or similar services for a lower fee. The SCM annual platform fee is 20 basis points or 0.2%. This fee is included in the above
fee schedule. The gross revenues of management fees are recorded to SCM. Management fees are paid to reps by SSI and SCM
reimburses SSI. Part of the platform fees are retained by SSI. Management fees that clients are charged is split between the
IAR and SCM.
When recommendations are made related to purchasing, selling and holding investments, the IAR determines the suitability of
the investment and tax implications such as long-term losses, short- and long-term gains. All trades are reviewed SCM
compliance personnel.
The Advisory Client can make additions to the AMA at any time. If assets in excess of $25,000 are deposited into the AMA
after the inception of a quarter, the fee payable for that quarter with respect to such assets will be prorated based on the number
of days remaining in the quarter. No fee adjustment will be made for partial withdrawals within a billing period or for the
appreciation or depreciation in the value of the AMA during any quarter.
The Advisory Client will receive a pro-rated refund for terminating the agreement before the end of the quarter by contacting
their SCM IAR. The fee refund is as follows:
Portfolio value at the end of day x Fee % / 365 x Days remaining in quarter = Total fee amount
Minimum account size is $100,000. Fees/Commissions are negotiable with each Advisory Client. SCM will accept accounts
below dollar minimum at its discretion. Service (Confirmation) Charge: $8.95. There is an additional paper surcharge of $1.45
for both statements and confirms which is sent to the Advisory Client. Advisory Clients will avoid this charge by receiving
electronic statements and confirms. To enroll they can contact their IAR through www.netxinvestor.com.
Charles Schwab Schedule of Commissions, Transaction Fees, and Handling Fees 1
Definition of Electronic Trades: Trades placed through one of the electronic channels, including online (e.g.,
www.schwaballiance.com or www.schwabadvisorcenter.com), Schwab Mobile, and automated phone services (e.g., Schwab
by Phone TM or TeleBroker®). Certain securities will not be available through all electronic trading channels. U. S. Over-the-
Counter (OTC) Securities and Canadian Stock Transaction fee: $6.95. Foreign Stock Transaction fee $50.
Stocks and Exchange-Traded Funds2: Electronic Trades $0. Alternative Pricing for each executed trade will not exceed the
greater of:
• $0.12 per share
• 10% of principal
• $50 minimum
Broker-Assisted Trades: Broker-Assisted Trades $25. Other trades requiring special handling, including, but not limited to,
DVP (Delivery versus Payment) Trades, Early Settlement Trades, and Restricted Stock Trades $25. Excludes non-U.S. ETFs,
which are available only to non-U.S. residents. Note: For Equity New Issues (Primary and Secondary Offerings), a selling
concession is included in the offering price. U. S. Over-the-Counter (OTC) Securities and Canadian Stock Transactions: $6.95
Commission plus $25. Foreign Stock Transaction fee $75 plus $25. (Only for accounts on Schwab Advisor Services Platform.)
Non-U.S. ETFs: Non-U.S. ETFs are available for eligible non-U.S. residents as broker-assisted trades, subject to a $50
transaction fee. For non-U.S. ETF orders, please contact your independent investment advisor, or call the Global Services team
from inside the U.S. at 1-800-992-4685 and from outside the U.S. at +1-415-667-8400.
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