Item 5. Fees and Compensation
Investment Management Fee
OJM provides the investment management services under the Program for an annual fee based
upon a percentage of the market value of the assets being managed by OJM. OJM’s annual fee is
exclusive of, and in addition to, brokerage commissions, transaction fees, and other related costs
and expenses which are incurred by the client. OJM does not, however, receive any portion of
these commissions, fees, and costs. OJM’s annual fee is prorated and charged quarterly, in arrears,
based upon the market value of the assets being managed by OJM on the last day of the previous
quarter. OJM provides the Program services for an annual asset based fee of 0.65%.
OJM, in its sole discretion, may negotiate to charge a lesser management fee based upon certain
criteria (i.e., anticipated future earning capacity, anticipated future additional assets, dollar amount
of assets to be managed, related accounts, account composition, pre-existing client, account
retention, pro bono activities, etc.).
Fees Charged by Schwab
As further discussed in response to Item 12 (below), OJM requires clients of the Program to
utilize the brokerage and clearing services of Charles Schwab & Co., Inc. (“Schwab”), an
unaffiliated SEC-registered broker-dealer and FINRA member. OJM may only implement its
investment management recommendations after the client has arranged for and furnished OJM
with all information and authorization regarding accounts with Schwab.
Clients may incur certain charges imposed by Schwab such as custodial fees, brokerage
commissions and/or transaction fees, wire transfer and electronic fund fees, and other fees on
brokerage accounts and securities transactions. In addition to OJM’s fees and the fees charged by
Schwab, clients will also incur charges directly by a mutual fund or ETF held in their account,
which shall be disclosed in the fund’s prospectus (e.g., fund management fees and other fund
expenses), deferred sales charges, odd-lot differentials and transfer taxes).
Fees for Management During Partial Quarters of Service
For the initial period of investment management services, the fees shall be calculated on a pro
rata basis.
The Agreement between OJM and the client will continue in effect until terminated by either
party pursuant to the terms of the Agreement. OJM’s fees are prorated through the date of
termination and any remaining balance is charged or refunded to the client, as appropriate.
Additions may be in cash or securities provided that OJM reserves the right to liquidate any
transferred securities or decline to accept particular securities into a client’s account. In light of
the investment parameters of the Program it is highly likely that OJM will liquidate any
transferred securities it accepts. Clients are advised that when transferred securities are
liquidated, they are subject to transaction fees, fees assessed at the mutual fund level (i.e.
contingent deferred sales charge) and/or tax ramifications.
If assets are deposited into or withdrawn from an account after the inception of a quarter, the fee
payable with respect to such assets will be adjusted or prorated based on the number of days
remaining in the quarter.
Commissions or Sales Charges for Recommendations of Securities
As detailed in this brochure, all clients’ assets managed as part of the Program are held at the
unaffiliated qualified broker-dealer custodian Schwab. In addition, all trading for client Program
accounts is done through Schwab. Therefore, the status of any Supervised Person as a registered
representative of any unaffiliated broker-dealer (other than Schwab) will in no way affect the
execution of securities trades related to the Program. However, outside of the Program clients can
engage certain persons associated with OJM (but not OJM) to render securities brokerage services
under a commission arrangement. Clients are under no obligation to engage such persons and may
choose brokers or agents not affiliated with OJM. Under this arrangement, clients may implement
securities transactions (not related to the Program) through certain of OJMs’ Supervised Persons
in their respective individual capacities as registered representatives of LifeMark Securities (an
Independent Broker Dealer and collectively “IBDs”) SEC registered broker-dealer and member
of FINRA. IBDs may charge brokerage commissions to effect these securities transactions and
thereafter, a portion of these commissions may be paid by IBDs to such Supervised Persons.
Prior to effecting any transactions clients are required to enter into a new account agreement with
IBDs. The brokerage commissions charged by IBDs may be higher or lower than those charged
by other broker-dealers. In addition, certain of OJM’s Supervised Persons may also receive
ongoing 12b-1 fees for mutual fund purchases from the mutual fund company during the period
that the client maintains the mutual fund investment.
A conflict of interest exists to the extent that OJM recommends the purchase of securities where
OJM’s Supervised Persons receive commissions or other additional compensation as a result of
OJM’s recommendations. OJM has procedures in place to ensure that any recommendations
made by such Supervised Persons are in the best interest of clients.
For accounts covered by ERISA (and such others that OJM, in its sole discretion deems
appropriate), OJM provides its investment advisory services on a fee-offset basis. In this scenario,
OJM may offset its fees by an amount equal to the aggregate commissions and 12b-1 fees earned by
OJM’s Supervised Persons in their individual capacities as registered representatives of IBDs.