Towers Watson Investment Services Inc

Fees and compensation

All fees and compensation are negotiated in advance of        Our fees do not include custodian fees, brokerage
any work done and are established in a written contract       commissions, legal fees, auditor fees, transaction costs,
between TWIS and our client. We do not deduct fees from       trustee fees or mutual fund expenses. Our clients will incur
assets. TWIS will bill for services in accordance with the    these fees, costs or expenses through the investments
terms and conditions that are agreed upon with our client.    they make, including investments within the WTW Funds.
                                                              Our brokerage practices are discussed in Item 12.
With the exception of DIS, fees are generally on a
fixed-fee retainer basis with monthly or quarterly billing.   The WTW Fund offering documents set forth in detail
For DIS, TWIS typically enters into an agreement with         each Fund’s fee and expense structure. Investors should
compensation that is asset-based and expressed in basis       consult the offering documents for further information on
points. TWIS does not have a standard fee schedule as         expenses and fees (including any anti-dilution levy).
fees are negotiable to reflect the level and the nature of
the responsibilities that TWIS assumes upon agreement         Although TWIS does not receive advisory fees directly
with the client and they may be based on the size and         from the Flowstone Opportunity Fund, TWIS indirectly
complexity of the portfolio and reflect the level of          benefits from fees earned by Flowstone through common
services provided.                                            ownership. In addition, because certain TWIS personnel
                                                              participate in investment decisions for the Flowstone
TWIS also offers consulting services to clients where         Opportunity Fund, TWIS has an economic and reputational
a flat fee or hourly fee may be charged. These rates          incentive to recommend the Flowstone Opportunity Fund
vary, depending upon the service and the skill level of       to its clients. This incentive creates a conflict of interest.
the personnel involved and are disclosed in the client
agreement where applicable.                                   TWIS does not accept compensation from third parties
                                                              for the sale of securities or other products. However,
In certain circumstances, TWIS may provide discrete,          a limited number of TWIS employees act as registered
project‑based advisory or consulting services, including      representatives of an unaffiliated broker-dealer. These
research, investment due diligence or operational due         employees do not receive compensation from the third-
diligence services, for which compensation may be             party broker-dealer in connection with the sale of pooled
structured as a flat fee, hourly fee, retainer or other       investment vehicles managed by TWIS or its affiliates.
agreed‑upon fee arrangement. For some engagements,
fees may be assessed on a project‑specific basis and          TWIS does not require clients to purchase investment
may be determined by reference to the scope of services       products that TWIS recommends through any specific
provided, the nature and complexity of the assignment,        brokers or agents. TWIS does not charge commissions
or other factors agreed in advance with the client.           or markups.
In limited cases, project‑based fees may be calculated
by reference to the amount of capital a client commits        As discussed in Item 4, TWIS sponsors the MiX Conference
to an investment following the completion of                  which certain investment managers and/or service
TWIS‑provided services. All such fees are negotiated          providers may attend for a fee. There are also outside
in advance, documented in a written agreement with            sponsorship opportunities available. TWIS receives
the client and are not contingent upon the investment         all revenue from this conference. The receipt of any
performance of any portfolio or investment.                   compensation is not tied to the sale of any WTW
                                                              services or WTW Funds.
Clients may pay in advance, as determined by prior
agreement. If work terminates during a calendar               Item 10 discusses the Structured Assessment Method
billing cycle, then TWIS will promptly refund any             Reports which may be sold to certain asset managers
unearned prepayments.                                         which TWIS hires to manage client assets. TWIS receives
                                                              all revenue from these reports. The receipt of any
                                                              compensation is not tied to the decision-making
                                                              process to hire asset managers.

6  /  Towers Watson Investment Services, Inc.

Types of clients

TWIS provides investment advisory services to a wide            Investors in the WTW Funds, must qualify as “accredited
variety of clients with substantial levels of invested assets   investors” under Regulation D of the Securities Act of
including defined benefit, defined contribution, other          1933, as amended and “qualified purchasers” as defined
pension and profit-sharing plan trusts, endowments,             in Section 2(a)(51) of the Investment Company Act of
foundations, institutional trusts, insurance companies          1940, as amended. Investors also need to meet additional
and nonprofit organizations.                                    requirements set forth in the subscription agreements of
                                                                the WTW Funds, such as a minimum investment amount.
With the exception of investors in the WTW Funds,
TWIS does not have a minimum account size or other
predetermined account requirements.

8  /  Towers Watson Investment Services, Inc.