Total Wealth Planning and Management, Inc. (hereinafter “TWPM”) offers the following services
to advisory clients:
A. Description of Services
TWPM participates in and sponsors wrap fee programs, which means TWPM will wrap
third party fees (i.e., custodian fees, brokerage fees, mutual fund fees, transaction fees,
etc.) for wrap fee portfolio management accounts. TWPM will charge clients one fee and
pay all transaction fees using the fee collected from the client. Accounts participating in
the wrap fee program are not charged higher advisory fees based on trading activity, but
clients should be aware that TWPM has an incentive to limit trading activities for those
accounts since the firm absorbs those transaction costs.
Certain other fees are not included in the wrap fee and are paid for separately by the client.
These include, but are not limited to, margin costs, charges imposed directly by a mutual
fund or exchange traded fund, deferred sales charges, odd-lot differentials, transfer taxes,
wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts and
securities transactions. While TWPM covers all transaction fees, in order to keep our
overall client fees lower, we generally limit our mutual fund selections (open -end and
ETF) to those funds available via Raymond James’ No Transaction Fee agreements.
Currently, there are over 3,000 open end funds available on this platform.
We divide our offerings between two types of clients. Traditional, which is face-to-face,
sit-down meetings on a more or less regular schedule and when needed or requested by
the client. The other offering is entitled “E” services that are delivered only electronically
and a la carte. As delivery of these services do not require travel and meeting time, we
pass on some of the savings to the clients by offering a slightly reduced fee.
We use two types of account platforms at our principal custodian, Raymond James. These
two platforms have mostly to do with their systems, policies, etc. We may use their
“Ambassador” account platform when we will be trading stocks, bonds, options, etc. The
Ambassador platform charges an asset-based fee to TWPM that covers all trading costs,
custodial fees, etc. We also use their Independent Clearing Account (“ICA”) platform.
Under the ICA platform we principally use open-end mutual funds and utilize mutual
funds from Raymond James’ extensive list of funds for which transaction fees are waived,
sales loads are waived, etc., leaving only the underlying management fees of the fund that
come out of the NAV. In some cases, especially in transfers, we may need or choose to sell
or buy mutual funds or other investments that incur trading charges from Raymond
James. In such circumstances, Raymond James will charge TWPM for trading, thus
TWPM covers the fee and there is no cost to the client other than the TWPM fee that was
agreed to in the contract.
The fee is usually set at the household level, but there may be exceptions for individual
accounts in specific cases within a single household (for instance, a buy and hold index
fund that we do not actively manage might
be charged no fee, while the other accounts
might be charged the standard fee, and a highly active or service intensive account might
be charged a higher fee than the other household accounts).
The Ambassador and ICA platforms will act like wrap accounts for
regulatory purposes.
The fee schedules are set forth below:
eOver the Top Service Platform
Total Assets Annual Fee
Below $3,335.00 $25 Flat
$3,336.00 - $50,000.00 0.75%
$50,001.00 - $99,999.00 0.50%
Traditional Over Top Service Platform
Account Value Max Rate
Up to $500,00.00 1.50%
$500,001.00 - $1,000,000.00 1.40%
$1,000,001.00 - $4,999,999.00 1.25%
$5,000,000.00 and above 1.00%
These fees are negotiable depending upon the needs of the client and complexity of the
situation and the final fee schedule is attached as Exhibit II of the client contract. TWPM
the last day of previous quarter or month for purposes of determining the market value
of the assets upon which the advisory fee is based. These are the generally applicable
fees, but for certain more complex situations a maximum fee of 2% may be charged.
Advisory fees are withdrawn directly from the client’s accounts with client written
authorization. Fees are paid quarterly or monthly in advance. Refunds are given on a
prorated basis, based on the number of days remaining in the billing period on the
effective date of termination. The fee refunded will be the balance of the fees collected in
advance minus the daily rate* times the number of days in the billing period up to and
including the effective date of termination. (*The daily rate is calculated by dividing the
annual fee by 365).
Clients may terminate the contract without penalty, for full refund, within five business
days of signing the contract. Thereafter, clients may terminate the contract with thirty
days’ written notice.
B. Contribution Cost Factors
The program may cost the client more or less than purchasing such services separately.
There are several factors that bear upon the relative cost of the program, including the
trading activity in the client’s account, the adviser’s ability to aggregate trades, and the
cost of the services if provided separately (which in turn depends on the prices and
specific services offered by different providers).
C. Additional Fees
Clients who participate in the wrap fee program will not have to pay for transaction or
trading fees. However, clients are still responsible for all other account fees, such as fees
to the custodian, transition fees if the account is moved to another broker, or mutual fund
fees.
D. Compensation of Client Participation
Neither TWPM or representatives of TWPM may receive additional compensation beyond
advisory fees for the participation of client’s in the wrap fee program. Compensation
received may be more than what would have been received if client paid separately for
investment advice, brokerage, and other services. Therefore, TWPM may have a financial
incentive to recommend the wrap fee program to clients.