| Payment for Services The Diastole Wealth Management consulting fee, the administrative fee and the investment advisor’s management fee (see appendix) will be added together for billing purposes. The cost of brokerage execution will vary if the account is “asset based” pricing resulting in an asset based annual brokerage cost versus “transaction based pricing” where the brokerage cost is a factor of the annual trading volume. In certain cases when Diastole Wealth Management is acting only as a managed accounts program sponsor and not as the investment consultant, Diastole Wealth Management will, where appropriate, delegate some of its responsibilities to a registered investment advisor or broker-dealer pursuant to Rule 3(a)-4 of the Investment Company Act of 1940. In these cases, Diastole Wealth Management will pay a portion of their fee to the registered investment advisor or broker-dealer. Certain clients may pay more or less than others depending upon the amount of assets, the type of account, the anticipated trading activity and the amount of special services required to service the account. Client fees may include a consulting fee (Diastole Wealth Management), an administrative fee, an investment advisory fee, and a clearing/custody fee. The fees will be calculated as a percentage of assets in the account. Fees are billed at the inception of the account, prorated for the time remaining in the quarter, and billed quarterly in advance, thereafter. Unless instructed to the contrary, Diastole Wealth Management debits each client’s account for the consulting, administrative and investment advisory fees and remits fees to the parties according to their pro rata share. Clients are also advised that they may pay more or less for these services if they were purchased directly from other providers. Diastole Wealth Management Consulting Fee:Each client will work with an investment consultant who will be responsible for servicing the client’s everyday investment needs. These consultants will be Diastole Wealth Management investment consultants or financial advisors employed by investment advisory firms or broker/dealers that use Diastole to administer their managed accounts program. The consulting fees can vary depending upon the services rendered; however, the base fees are as follows:
* Not applicable for Delta Manager Direct Wrap Program Clients – see addendum A
Diastole Wealth Management Administrative Fee: Diastole charges an asset-based fee for providing the following administrative services: investment manager research and screening, negotiations of contracts and fees, operational management of transactions in client accounts and performance reporting. Diastole charges are a percentage of assets under consultation and may vary based upon the size of the accounts and scope and nature of the services provided. The basic annual fee is as follows:
* Not applicable for Delta Manager Direct Wrap Program Clients – see addendum A
Mutual funds will charge their own investment management fees and will incur their own transaction costs- information on these costs will be detailed in the mutual fund prospectuses which the client will receive. Independent Investment Advisor Fees: Diastole has negotiated the investment advisory fee and minimum account size with each investment advisor in the managed accounts program prior to the manager’s addition to the recommended list. Investment advisory fees typically range from .25% to 1.00% of assets annually, depending upon the type of account and the amount of assets. These contractual arrangements with the investment advisors are subject to change over time, but this will not necessarily result in a change to the client’s fee arrangement. Brokerage Clearing, Transaction and Custody Charges: Each client’s assets will be held in safekeeping at a custodian selected by Diastole Wealth Management (unless client makes alternative arrangements). This broker/dealer will be responsible for custody, clearing and execution of client securities. Accounts will be charged a “per transaction” fee or an “asset based” fee that covers all of the transactions for the year. For “asset based” accounts the fee is calculated as a percentage of assets under management:
Note: Individually managed accounts electing “asset based”
These fees have been negotiated in advance with a particular custodian; however, the fees
can vary if the client selects a different custodian. Furthermore, the purchase or sale of nonlisted
securities will often include the added expense of mark-ups, markdowns or spreads.
These costs are not included in the commission costs but are a component of the total cost of
brokerage commissions for each client’s account. It is each investment advisor’s
responsibility to monitor these costs to ensure that they are reasonable in light of the
transaction. brokerage pricing are subject to a $500.00 minimum annual fee. *Only applicable for Delta Manager Direct Wrap Program clients if custodian is Charles Schwab Clients electing “transaction based” fees will be charged a per transaction charge that will be negotiated in advance with the broker/dealer. The “unbundled” pricing might be more or less than the asset based fee charged in the “asset based” pricing model. Mutual funds may be subject to a transaction fee; however, many mutual funds on the Diastole Wealth Management’s recommended list can be purchased through Charles Schwab without a transaction fee. The clients’ total mutual fund transaction costs will vary based upon which funds are selected. |