ITEM 5: FEES AND COMPENSATION
Method of Compensation and Fee Schedule
The total annual advisory fees charged to the client are based on a percentage of assets under
management as follows:
Assets Under Management Per Quarter Annual Advisory Fee
First $3,000,000 0.3125% 1.25%
Next $7,000,000 0.2500% 1.00%
Next $10,000,000 0.1875% 0.75%
Next $30,000,000 0.1125% 0.45%
Next $50,000,000 0.0625% 0.25%
The annual fee is assessed on a quarterly schedule and calculated on the client's ending
quarterly balance. For example, a client with a $6,000,000 portfolio will be charged 1.25%
annually or .3125% per quarter on the first $3,000,000, and then 1.00% annually or .25% per
quarter on the remaining $3,000,000. With your written authorization, the custodian
automatically deducts the advisory fee from your account quarterly, and distributes the above
stated fee to TLA. The fees are not negotiable.
Client Payment of Fees
With written authorization, we will automatically deduct our fee from your account through
the qualified custodian holding your funds and securities. These fees will be deducted quarterly
in advance. The authorization and method of payment will be documented in the Investment
Advisory Agreement.
Additional Client Fees Charged
In addition to advisory fees paid to TLA as explained above, clients may pay custodial service,
account maintenance, transaction, and other fees associated with maintaining the account.
These fees vary by broker and/or custodian. Clients should ask TLA for details on transaction
fees or other custodial fees specific to their account, as these fees are not included in the annual
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advisory fee. TLA does not share any portion of such fees. Additionally, for any mutual funds
purchased, the client may pay their proportionate share of the funds’ distribution, internal
management, investment advisory and administrative fees. Such fees are not shared with TLA
and are compensation to the fund manager. Clients are urged to read the mutual fund
prospectus prior to investing.
Mutual funds purchased or sold in broker-dealer accounts may generate transaction fees that
would not exist if the purchase or sale were made directly with the mutual fund company.
Mutual funds held in broker-dealer accounts also charge management fees. These mutual fund
management fees may be more or less than the mutual fund management fees charged if the
client held the mutual fund directly with the mutual fund company.
Clients may purchase shares of mutual funds directly from the mutual fund issuer, its principal
underwriter, or a distributor without purchasing the services of TLA or paying the advisory fee
on such shares (but subject to any applicable sales charges). Certain mutual funds are offered
to the public without a sales charge. In the case of mutual funds offered with a sales charge, the
prevailing sales charge (as described in the mutual fund prospectus) may be more or less than
the applicable advisory fee. However, clients would not receive TLA’s assistance in developing
an investment strategy, selecting securities, monitoring performance of the account, and
making changes as necessary.
Please refer to Item 12 “Brokerage Practices” of this brochure for additional information.
Prepayment of Client Fees
TLA charges its advisory fees in advance. If you would like to end our advisory relationship
within 5 days of the signing of the Agreement, you may do so without penalty. Thereafter,
you may end our advisory relationship by providing 30 days written notice. We will prorate
the advisory fees received through the termination date and send you a refund of the
prepaid, unearned portion of your fee. We process refund payments within 30 days of the
termination date and will send you a check or refund your investment account. In either
case we will provide a final invoice detailing the calculation of the refund.
External Compensation for the Sale of Securities to Clients
TLA does not receive any external compensation for the sale of securities to clients, nor do any
of the investment advisor representatives of TLA.