Item 5 - Fees and Compensation
Investment Advisory Fees
Taurus charges advisory fees, and commissions or ticket charges, according to two different
schedules. Schedule 1 involves lower advisory fees plus commissions on trades. Advisory fees for
Schedule 2 are modestly higher, but there are no commissions, just a small ticket charge. The
two advisory fee schedules are listed immediately below, and information about commissions and
ticket charges under the two schedules follow later in this section.
Taurus charges fees quarterly in advance based on the following schedules:
Schedule 1
Assets Not Allocated to Fixed Income Annual Fee
First $500,000 1.50%
Next $2 million 1.25%
Next $2.5 million 1.00%
Amounts in excess of $5 million 0.75%
Assets Allocated to Fixed Income Annual Fee
First $20 million 0.50%
Amounts in excess of $20 million 0.40%
Schedule 2
Assets Not Allocated to Fixed Income
With a market value of less than $10 million:
First $2,500,000 1.50%
Next $2,500,000 1.40%
Next $2,500,000 1.30%
Next $2,499,999 1.20%
OR
With a market value equal to or greater than $10 million:
First $10,000,000 1.25%
Amounts in excess of $10,000,000 0.90%
Assets Allocated to Fixed Income
First $20,000,000 0.50%
Amounts in excess of $20,000,000 0.40%
Taurus and its clients agree on target allocations between fixed income and other asset classes.
Actual allocations to various asset classes can differ from the agreed-upon targets that are used for
billing purposes. Taurus seeks to make good faith recommendations regarding clients’ asset
allocations, but the lower advisory fees charged on fixed income assets poses a conflict of interest
regarding recommended fixed income allocations.
Taurus’ quarterly fees are typically collected in advance based on clients’ capital balances at the
start of each quarter. If a client terminates the investment management agreement in the middle of
a billing period, the Company will automatically refund the client an amount that is pro-rated
based on the number of days that the account was managed. Existing clients’ capital contributions
within a quarter will generally not be billed upon until the start of the next quarter. Similarly, clients
will not receive a refund on partial redemptions made within a quarter.
Taurus typically imposes a minimum quarterly fee of $1,875. However, the Company has waived
or negotiated lower or different fees and commissions for certain clients. Information about these
alternative fee structures is available upon request.
Most clients authorize Taurus to deduct fees automatically from their brokerage accounts, but
clients may request that the Company send quarterly invoices.
To the extent that client assets are invested in mutual funds or ETFs, those assets will be subject to
a second layer of management fees, commissions, and administrative costs that are borne directly
by the pooled investment vehicles. Clients are responsible for paying brokerage commissions,
which are described in greater detail below. Clients who custody their accounts away from NFS
may also be responsible for paying custodial fees.
Commissions
Bradford Peck (Portfolio Manager) is a registered representative of Western and will receive a
portion of the Commission Fees. In this regard, Mr. Peck (and any future employees of Taurus
who are registered representatives of Western) will have a conflict of interest in that they owe a
fiduciary duty to the Account and will also generate Commission Fees for, and receive a portion
of such fees from, Western.
Commissions will generally be charged in accordance with the following schedules:
Schedule 1
COMMISSION SCHEDULE: EQUITIES
(IN CENTS PER SHARE)
Number of Shares
$/Share 100 300 500 1,000 1,500 2,000 2,500 5,000 10,000
5.00 0.12 0.12 0.11 0.09 0.09 0.08 0.08 0.07 0.06
10.00 0.18 0.16 0.14 0.14 0.13 0.12 0.11 0.09 0.08
15.00 0.22 0.19 0.19 0.17 0.16 0.14 0.13 0.11 0.09
20.00 0.27 0.25 0.23 0.21 0.18 0.16 0.15 0.12 0.11
25.00 0.31 0.29 0.26 0.23 0.20 0.18 0.16 0.14 0.12
30.00 0.35 0.32 0.30 0.26 0.21 0.19 0.18 0.15 0.14
35.00 0.38 0.36 0.33 0.27 0.23 0.21 0.20 0.17 0.15
40.00 0.41 0.39 0.37 0.27 0.25 0.22 0.21 0.19 0.15
45.00 0.44 0.43 0.39 0.30 0.26 0.24 0.23 0.20 0.16
50.00 0.46 0.46 0.42 0.32 0.28 0.26 0.24 0.22 0.17
60.00 0.52 0.52 0.47 0.35 0.31 0.29 0.27 0.25 0.19
70.00 0.52 0.52 0.50 0.38 0.34 0.32 0.31 0.26 0.20
80.00 0.52 0.52 0.52 0.42 0.37 0.35 0.34 0.28 0.22
90.00 0.52 0.52 0.52 0.45 0.41 0.38 0.37 0.30 0.24
100.00 0.52 0.52 0.52 0.48 0.44 0.42 0.40 0.32 0.26
The commission rates charged by Western to Taurus’ clients are materially higher than those that
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