Item 5 - Fees and Compensation
Fees for Investment Management Services
We offer our services on a fee-only basis. Our investment management fees will
be paid quarterly in advance based on the ending prior quarter market valuations.
Primarily, clients will sign a written authorization to have fees directly debited from
their accounts held at the qualified custodian. Your custodian does not determine
the fee for billing. TBH Advisors will send the bill to the custodian for fee payments.
Clients should review their quarterly statements and notify our firm of any
inconsistencies. Rarely, we will, at the client’s request, directly bill the client for
services rendered. These clients will receive an invoice for the quarter.
Fees for the initial quarter are based on the value of your cash and securities on the
date the custodian receives them and are prorated based upon the number of
calendar days in the calendar quarter that our agreement is in effect.
Our fee schedule is described below:
Assets under Management Advisory Fee
First $ 250,000 2.00%
Next $ 750,000 (up to $1,000,000) 1.75%
Next $2,000,000 (up to $3,000,000) 1.50%
Next $2,000,000 (up to $5,000,000) 1.25%
Next $5,000,000 (up to $10,000,000) 1.00%
Above $10,000,000 0.90%
All fees are negotiable at our sole discretion. We may group some client accounts
together to meet minimum thresholds.
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In addition, we have grand-fathered some client’s fees that were established accounts
prior to changes, acquisitions and mergers. Finally, for certain family and friends, at
our sole discretion, we may waive fees in part or in entirety.
Fees for Financial Planning
We offer our financial planning services for either an hourly or fixed fee; or, as
a percent of gross income.
Financial Planning Fees
Percent of Income Maximum 1%
Fixed fees are separately negotiated with each client and agreed to in a written
agreement. The fees are based upon the complexity of assets, number of areas
analyzed, depth of analysis required, or other unique reasons agreed upon by you
and us. An estimate of the time involved will be provided before signing the advisory
agreement. All fees are negotiable at our discretion.
Fixed fees are billed 50% as an upfront retainer and the remainder is due upon
completion of the project. Fees assessed as a percent of income are billed semi-
annually, with the first installment payable when the advisory agreement is executed.
Billing will continue until the agreement is terminated. No fees will ever be charged
six months or more in advance for work performed. Clients who have paid fees in
advance will receive a refund pro-rated for work performed.
If you choose to implement your financial plan through the financial professional
who is also registered as a registered representative of an unaffiliated broker-dealer
or insurance agency, he/she receives commissions or other compensation such as
mutual fund 12b-1 fees as a result of those securities transactions on top of the any
financial planning fees paid for the plan. This can create a conflict of interest for the
financial professional as he/she may recommend products based on the
compensation he/she receives.
Fees for Consulting Services
Hourly fees are separately negotiated with the client and based upon the complexity
of the plan. The fees will be agreed to in writing prior to commencement of the
work. Hourly consulting services are billed and paid on a monthly basis as services
are provided.
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General Information about Our Fees
In addition to our fee, clients are subject to fees and transaction costs from the
separate broker/dealers and custodians working with your account. In addition,
sponsor companies usually have additional fees for management of your account,
maintenance and administration. These fees are separate and customary from the fee
we charge you for advisory services.
Mutual fund companies, ETFs, and variable annuity issuers charge internal fees and
expenses for their products. These fees and expenses are in addition to any advisory
fees charged by us. Complete details of these internal fees and expenses are
explained in the prospectuses for each investment. You are strongly encouraged to
read these explanations before investing any money. You may ask us any questions
you have about fees and expenses.
If you purchase mutual funds through the custodian, you may pay a transaction
fee that would not be charged if the transactions were made directly through the
mutual fund company. Also, mutual funds held in accounts at brokerage firms
may pay internal fees that are different from funds held at the mutual fund company.
While you may purchase shares of mutual funds directly from the mutual fund
company without a transaction fee, those investments would not be part of our
advisory relationship with you. This means that they would not be included in our
investment strategies, investment performance monitoring, or portfolio
reallocations.
Certain members of our firm are also registered as registered representatives and/or
insurance agents. As such, these individuals will receive commissions based on the
sale of securities or insurance products. The fees clients pay for the purchase of these
products benefit the financial professional in his/her role as an insurance agent or
registered representative and are separate from the advisory service fees paid for
advisory services. This represents a conflict of interest. We mitigate this conflict by
disclosing it to our clients. Clients are under no obligation to purchase securities
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