Fee-Based Disclosure




In an asset-based fee relationship, clients pay an annual fee based on the level of assets for the advice and services provided by their financial advisor as a part of the advisory relationship. By deciding to pay a fee for these services — rather than commissions — clients must be made aware that the fee may be higher than the cost of a commission alternative during periods of lower trading activity.

Clients must understand that the annual advisory fee charged in fee-based accounts is in addition to the management fees and operating expenses charged by open-end, closed-end and exchange-traded funds. To the extent that clients intend to hold fund shares for extended periods of time, these internal fund expenses should be added to the annual advisory fee when evaluating the costs of the account. Additionally, certain mutual fund families impose short-term trading charges (typically 1% to 2% of the original amount invested) which are generally not waived for fee-based accounts.


Clients should be asked to consider these factors when deciding whether a fee-based account is right for them: i) past and anticipated investment activity, ii) past and anticipated use of the products and services available in the account, iii) the value and type of eligible assets, iv) the costs and potential benefits of the service, v) investment objectives and goals, vi) additional financial and planning services provided, vii) personal preferences concerning available payment alternatives.

Clients should consider whether it would be better to pay separately for each trade executed and each product and service used. Since these factors may change, clients and advisors should periodically re-evaluate whether the ongoing use of an asset-based fee program continues to be appropriate in servicing client needs. A complete schedule of charges associated with fee-based accounts is available in the firm’s Form ADV Part II or in the applicable Client Agreements.