Item 5 - Fees and Compensation
This section provides information concerning fees and compensation for investment advisory
services and programs available through Western. Additional information regarding fees and
compensation for the Contour Program wrap fee offering offered by Western can be found in the
Western International Securities, Inc.
Contour Brochure.
Western and our IARs are compensated for our services by charging an advisory fee. Advisory fees
are typically calculated as a percentage of assets under management. Fees vary based on the type
of advisory service provided to a client. The actual fee is disclosed prior to the client signing the
agreement. The advisory fee is shared between your IAR and Western. Although platform fees and
third-party money manager fees are generally non-negotiable, your IAR can negotiate his or her
advisory fee.
Specific program fees are discussed below. The fee charged can be higher or lower than a
program’s listed fees depending on a client’s unique circumstances. The fee charged by Western is
established in the client’s written agreement with Western. Depending on the program selected,
fees will be billed on a monthly or quarterly basis in advance or arrears. All fees are specified in the
client agreement, which typically authorizes the custodian to directly deduct the advisory fees from
a client’s account.
Certain advisory programs offer the ability to “household” eligible accounts for a lower fee-
schedule. Householding involves aggregating your accounts for fee calculation purposes, which can
help you qualify for a lower fee. A household is generally a group of accounts having the same
address of record or same Social Security number. Households are established through the IAR and
must be requested by the client. Neither Western nor our IARs are responsible for identifying
eligible accounts. A client is responsible for determining if they have eligible accounts and ensuring
those accounts remain eligible. Western and our IARs earn higher fees if clients elect not to
household eligible accounts where available. Clients should discuss the program fee and any
potential fee reduction available through householding with their IAR.
Advisory fees are charged to clients of Western’s various advisory platforms in exchange for
account management, investment advice, consultation, and other advisory services offered under
the platforms. Advisory fees are separate and distinct from fees and charges imposed on clients by
custodians, brokers (including Western), TPMMs, and other third parties, such as fees charged by
managers, transaction fees, custodial maintenance fees, fees and taxes on brokerage accounts and
securities transactions, and underlying mutual fund fees and expenses paid to mutual funds and
other investment product companies. Some common transactions that include associated
processing fees and charges include trading, transfers, distribution of funds, systematic
investments and withdrawals, and mutual fund exchanges. Many different circumstances can
cause fees and charges to vary account by account. Some of these circumstances include the type
of security being traded and dollar amount and/or share quantity of the trade. Custodial fees vary
between custodians and the type of account. For instance, some types of retirement accounts carry
higher custodial maintenance fees than others.
Clients are charged fees for specific account services within an AdvisorOne or Contour account,
including for: outgoing transfers, wired funds, stop payments, direct registration of securities,
paper statements and confirms, margin extensions, ticket charges, and IRA maintenance and
termination. See “Other Fees and Expenses” below.
The costs associated with an advisory account may be more than the costs associated with a
traditional brokerage account arrangement where a client pays a commission for each transaction
but does not receive ongoing advice, this is particularly true for clients that intend to have a low
Western International Securities, Inc.
number of transactions or follow a buy-and-hold approach. If you intend to follow a buy-and-hold
investment strategy or do not wish to receive ongoing investment advice or management services,
you should consider opening a commission-based brokerage account rather than an advisory
account.
In advisory accounts, a client is paying for ongoing investment advice from an IAR. An IAR
recommending an advisory account to a client receives a portion of the advisory fee as a result of
the client’s participation in an advisory program. In some circumstances, this compensation will be
more than what the IAR would receive if the client had a brokerage account through Western. If
compensation would be more in recommending an advisory account than a brokerage account, an
IAR has a financial incentive to recommend advisory programs or services over brokerage programs
or services. Notwithstanding that conflict of interest, Western and our IARs take their responsibility
to clients seriously and will recommend an advisory program or service to a client only if it is
reasonably believed to be in the client’s best interest.
The amount of compensation an IAR can receive varies between advisory programs and services,
therefore, an IAR has a financial incentive to recommend an advisory program or service that
permits the IAR to charge higher compensation over another advisory program or service where
the IAR’s level of compensation is less. Recommendations for specific advisory programs or services
are made based on an IARs best judgment based on the information a client provides to the IAR.
Contour Platform Fees
Contour is a wrap fee program where no transaction charges apply, and a single fee is paid for all
advisory services and transactions. The fees for participation in Contour are based on an annual
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