Item 5 Fees and Compensation
INVESTMENT SUPERVISORY SERVICES
SEPARATE ACCOUNT PORTFOLIO MANAGEMENT FEES
Our annual fees for Investment Supervisory Services for institutional relationships are based upon a
percentage of assets under management, under the following schedules:
US Large Cap and US Mid Cap Equity Accounts
Assets Fee
First 25 Million 0.70%
Next 25 Million 0.60%
Over 50 Million 0.50%
International/Global/Global Dividend/Emerging Markets Equity and Balanced Accounts
Assets Fee
First 25 Million 0.75%
Next 25 Million 0.65%
Over 50 Million 0.55%
A minimum of $10,000,000 of assets under management is generally required to open an institutional
account. TWI has a very small number of retail clients, who are charged an asset based fee that
differs from the above schedules, but is generally 1.00% of assets or less. Under certain sub-advisory
and/or wrap relationships, TWI often reduces its minimum account size to $100,000 or less. These
minimum account sizes are typically negotiated on a case-by-case basis. TWI at times will group
certain related client accounts for the purposes of achieving the minimum account size and
determining the annualized fee. TWI may also terminate the advisory services for any account that
falls below these minimums.
Fees for Management During Partial Quarters of Service: For the initial or final period of
investment management services, the fees shall be calculated on a pro rata basis.
Limited Negotiability of Advisory Fees: Although TWI has established the aforementioned fee
schedule(s), we retain the discretion to negotiate alternative fees on a client-by-client basis. Client
facts, circumstances and needs are considered in determining the fee schedule. These include the
complexity of the client, assets to be placed under management, anticipated future additional assets,
related accounts, portfolio style, account composition, reports, among other factors. The specific
annual fee schedule is identified in the contract between TWI and each client.
TWI collects advisory fees on a quarterly basis for the majority of clients, although we do have clients
that pay advisory fees on a monthly basis. TWI collects fees both in advance and in arrears. With the
written permission of the client and the client’s custodian, TWI debits the advisory fee directly from the
client account. All other clients receive a bill for the advisory services provided by TWI. Clients may
choose whether TWI deducts advisory fees directly from the client’s assets or if TWI bills the client for
advisory fees.
GENERAL INFORMATION
Termination of the Advisory Relationship: A client agreement may be canceled at any time, by
either party, for any reason upon receipt of 30 days written notice. We have agreed to different
notification requirements with certain clients. As disclosed above, certain fees are paid in advance of
services provided. Upon termination of any account, any prepaid, unearned fees will be promptly
refunded. In calculating a client’s reimbursement of fees, we will pro rate the reimbursement according
to the number of days remaining in the billing period.
Wrap Fee Programs and Separately Managed Account Fees: Clients participating in separately
managed account programs may be charged various program fees in addition to the advisory fee
charged by our firm. Such fees may include the investment advisory fees of the independent advisers,
which may be charged as part of a wrap fee arrangement. In a wrap fee arrangement, clients pay a
single fee for advisory, brokerage and custodial services. Client’s portfolio transactions may be
executed without commission charges in a wrap fee arrangement.
The annual fee paid by the client to the wrap-fee Program Sponsor will typically range from 1.5%-3.0%
of the client's assets under management. The Program Sponsor usually pays TWI a quarterly fee for
its investment advisory services. The fee is generally between 0.35%-0.75% for the assets TWI
manages under the program depending on the size of the wrap-fee program, services performed by
the Program Sponsor and the management style selected.
In evaluating such an arrangement, the client should also consider that, depending upon the level of
the wrap fee charged by the broker-dealer, the amount of portfolio activity in the client’s account, and
other factors, the wrap fee may or may not exceed the aggregate cost of such services if they were to
be provided separately. We will review with clients any separate program fees that may be charged to
clients.
UMA Program Fees: TWI is compensated by a UMA program sponsor based on the total assets
invested in our model portfolios. Typically the annual fee ranges from 0.30%-0.40% of participating
assets and is calculated by the UMA program sponsor. We often negotiate this fee based on the
amount of assets invested in our model portfolios and the total number of strategies available through
a particular UMA program sponsor.
Additional Fees and Expenses: In addition to our advisory fees, clients are also responsible for the
fees and expenses charged by custodians and imposed by broker dealers, including, but not limited
to, any brokerage commissions or other transaction charges imposed by a broker dealer. Please refer
to the "Brokerage Practices" section (Item 12) of this Form ADV for additional information.
All fees paid to TWI for investment advisory services are separate and distinct from the fees and
expenses charged by a mutual fund, exchange traded fund or any other pooled investment vehicle in
which TWI may invest on behalf of clients, including the Thomas White Funds and the Thomas White
Private Fund. These fees and expenses are described in each fund's prospectus or other offering
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