Services
W&S Wealth Solutions® Overview
W&SBS is a broker-dealer and investment advisory firm dually-registered with the SEC and is a
member of the Financial Industry Regulatory Authority (FINRA). W&SBS was founded in 1974
and is a wholly-owned subsidiary of Western & Southern Financial Group, Inc. Through its
investment advisory function, W&SBS offers a fee-based asset allocation program, the W&S
Wealth Solutions® (the “W&S Wealth Solutions”) with 25 models (the “Wealth Solutions Models”)
invested in affiliated mutual funds, unaffiliated mutual funds, unaffiliated exchange traded funds,
and unaffiliated money market funds. This brochure (“Brochure”) provides clients (“client” or “you”)
with information about the W&S Wealth Solutions, the fees charged for our services under the
W&S Wealth Solutions, and our business practices. Please review this Brochure carefully and
consult with your tax professional before you decide to invest in the W&S Wealth Solutions.
The decision to invest in the W&S Wealth Solutions is yours. Before making this decision, you
and your financial advisor should discuss whether other programs and investments might be more
appropriate for your investment goals or needs. If you decide to invest in the W&S Wealth
Solutions, we will not begin providing you advisory services through the program until (i) our
acceptance and approval of a written Advisory Agreement between you and W&SBS and
(ii) funding of your W&S Wealth Solutions account at the initial minimum investment as
determined by W&SBS.
Before investing in the W&S Wealth Solutions, you should decide if you are comfortable forgoing
the day-to-day management of your account. Investors in the W&S Wealth Solutions typically:
• Need advice and guidance when making investment decisions;
• Are at ease with a financial professional making their day-to-day investment decisions;
• Are willing to follow a disciplined investment strategy; and
• Are comfortable paying quarterly, asset-based (percentage) fees for investment advice and
execution of investments rather than individual commissions or sales charges.
In evaluating fee-based advisory programs, you should consider a number of factors. You may
be able to obtain some or all of the same or similar investments and/or services that are available
through the W&S Wealth Solutions or other fee-based advisory programs separately from
W&SBS in its broker-dealer capacity or from another broker-dealer or investment adviser. You
should consider that, depending on the circumstances, the aggregate fees you will pay for
investing in the W&S Wealth Solutions may be lower or higher than if you purchased the
investments or services separately or through another broker-dealer or investment adviser. An
important fact to consider is the amount of trading activity you have in your accounts and the
corresponding brokerage commissions that would be charged if you bought and sold individual
securities in a brokerage account. You also may experience different performance results or tax
consequences from what you would experience by purchasing the investment separately or
through another broker-dealer or investment adviser. Additionally, some of the investments
available in the W&S Wealth Solutions may not be available to be held or purchased outside of
the W&S Wealth Solutions.
As discussed more fully below, your account may invest in one or more affiliated mutual funds
whose investment adviser and investment sub-adviser are affiliates of W&SBS. Please read this
Brochure carefully to understand additional conflicts of interest that W&SBS is subject to in
connection with recommending affiliated mutual funds and how such conflicts are addressed.
Risk Profile, Investment Objective and Wealth Solutions Model
The W&S Wealth Solutions is an asset allocation program in which a portion of your investments
will be invested in various asset classes based on your selected risk profile (“Risk Profile”) and
investment objective (“Investment Objective”). Based upon the level of investment risk you are
willing to take, the expected time horizon for your financial goals, need, and preference, we will
invest your money in a diversified model of affiliated mutual funds, unaffiliated mutual funds,
unaffiliated exchange traded funds, and unaffiliated money market funds (“Program Funds”)
based on target asset allocations. Asset allocation cannot eliminate risk associated with investing,
but it can help to keep your account within your stated risk tolerance range.
Before you invest in the W&S Wealth Solutions, we will complete, on the basis of information you
provide, an Investment Services Questionnaire and custodial account agreement that contains
important information about your account, generally including your time horizon, risk tolerance,
need, and preference. Your time horizon will reflect the period over which you expect to be
accumulating and/or distributing your investments.
Based upon the level of investment risk you are willing to take and the expected time horizon for
your financial goals, we will recommend a Risk Profile.
Risk Profiles in the W&S Wealth Solutions program include:
Conservative: Conservative investors typically have a low risk tolerance and/or a short time
horizon and seek investment stability and liquidity from their investable assets. The main objective
of the conservative investor is to preserve capital while providing income. Conservative investors
seek portfolios with low fluctuation levels.
Moderately Conservative: Moderately Conservative investors typically have either a moderate
time horizon or a slightly higher risk tolerance than a conservative investor and seek both modest
capital appreciation and income from their investable assets. The main objective of moderately
conservative investors is to preserve their capital, but they will accept fluctuations in the values of
their portfolios from year to year.
Moderate: Moderate investors typically have a higher tolerance for risk and/or a longer time
horizon while seeking relatively stable growth from their investable assets and some level of
income. The main objective of a moderate investor is to achieve steady portfolio growth while
limiting fluctuations to less than those of the overall markets.
Moderately Aggressive: Moderately Aggressive investors typically have a relatively high
tolerance for risk and a longer time horizon and seek above-average growth from their investible
assets, but have little need for current income. The main objective of the moderately aggressive
investor is capital appreciation. Moderately aggressive investors can tolerate moderate
fluctuations in their portfolio values.
Aggressive: Aggressive investors typically have both a high tolerance for risk and a long
investment time horizon. The main objective of aggressive investors is to provide high growth for
their investable assets without providing current income. An aggressive investor can accept
portfolios with substantial fluctuations in value from year to year, which makes this category
inappropriate for those who do not have an extended investment horizon.
Each Risk Profile in the W&S Wealth Solutions program include five Investment Objectives based
on your needs and preferences. They are:
Total Return: the investor’s focus is on total return, and the investor does not have immediate
income need or other investment preferences.
Income Oriented: the investor is counting on the assets invested in the Wealth Solutions Model
to provide an immediate and on-going income stream, but the investor does not have an
immediate need to withdraw a significant portion of the investable assets. This portfolio will focus
on investment options and/or strategies that generate income distribution. These portfolios invest
in higher dividend yielding funds, potentially avoiding having to sell Program Funds to finance the
required income stream, which could cause a tax event and/or encounter unfavorable market
conditions.
Socially Conscious: for a socially conscious investor who prefers funds dedicated to socially
conscious causes. These funds may selectively invest in stocks and bonds of companies that
have favorable environmental, social, or corporate governance traits, such as firms that address
climate change, make an impact in local communities, including indigenous communities, or
advocate diversity in company board of directors. These funds may also avoid investing in
businesses involved in firearms, alcohol, tobacco, or gambling. When dedicated choices are not
available in certain asset classes, priority is placed on those funds that have a higher proportion
of their portfolio holdings in securities of companies that are socially conscious. The investor is
willing to give up potential investment return and investment income to invest in funds invested in
companies that are socially conscious.
Tax Aware: for an investor in a non-qualified account who is focused on after-tax return and
prefers investment strategies that try to reduce the erosion of return caused by taxes on
investment income and gains. The investor does not have immediate income need or other
investment preferences.
EnFocus™: for an investor focused on growing this portfolio through total return rather than
investment income. This Investment Objective operates similarly to Total Return, however when
selecting funds, this model accesses only a subset of the Program List (defined in the Program
Funds section of this Item).
W&SBS will recommend a Risk Profile and an Investment Objective after reviewing information
you provide, including your time horizon, risk tolerance, need, preference, and other pertinent
factors. Once your Risk Profile and Investment Objective are selected, W&SBS will select, in
consultation with you, a Wealth Solutions Model that is consistent with your chosen Risk Profile
and Investment Objective. The chart below illustrates the available Wealth Solutions Models by
combining five Risk Profiles and five Investment Objectives.
Conservative
Moderately
Conservative
Moderate
Moderately
Aggressive
Aggressive
Total Return
Income Oriented
Socially Conscious
Tax Aware
EnFocus™
You should be mindful that different Investment Objectives have different implications on the
following:
• Minimum quarterly fee, addressed in the W&S Wealth Solutions Fee section below within
• Required initial investment amount and ongoing Account balance, both addressed in the
Requirements to Open or Maintain an Account section in Item 5.
• How W&SBS manages your account, such as how a fund in your account is liquidated
when a Program Fund is replaced, and how your account is rebalanced to your Wealth
Solutions Model, as described below.
Portfolio rebalancing serves an important function in keeping a portfolio targeted to the
appropriate level of risk. A threshold approach to portfolio rebalancing helps mitigate the risk of a
portfolio drifting too far outside of the desired asset allocation. At least once a quarter W&SBS
reviews your portfolio for rebalancing purpose, and your portfolio will be rebalanced when the
weight of any asset class deviates more than the threshold percent from the asset class’ target.
The threshold is determined as follow:
• For an account with an Investment Objective of Total Return, Income Oriented, Socially
Conscious, and EnFocus™, the rebalancing threshold is +/-2.5% from the asset class’
target weight. Trade amounts less than $625 are considered de minimis, and such trades
will not be made.
• For an account with an Investment Objective of Tax Aware, the rebalance threshold is
+/-5% from the asset class’ target weight. Trade amounts less than $1,000 are considered
de minimis, and such trades will not be made. This wider band and/or higher de minimis
trade amount reduces trading and its potential tax consequences.
For an account with an Investment Objective of Total Return, Income Oriented, Socially
Conscious, and EnFocus™, the following describes how W&SBS manages your account:
• Your new account is immediately invested in your Wealth Solutions Model.
• When a Program Fund in your Wealth Solutions Model is replaced by another Program
Fund, the liquidation of the previous fund and the purchase of the new fund are made
immediately, without regard for tax consequences.
For an account with an Investment Objective of Tax Aware, the following describes how W&SBS
manages your account:
• Your new account that is funded in January through October is immediately invested in
your Wealth Solutions Model. Your new account that is funded in November through
December is first invested in exchange traded funds of similar market exposure to the
Program Funds in your Wealth Solutions Model. This process avoids purchasing mutual
funds when they are most likely to make their annual capital gains distributions. These
exchange traded funds are replaced with the Program Funds in your Wealth Solutions
Model in January of the subsequent year.
• When a Program Fund in your Wealth Solutions Model is replaced by another Program
Fund, the following chart explains the timing of the replacement, according to three factors:
whether the investment thesis behind this replacement is immediate, your tax status in
this Program Fund, and your holding period in this Program Fund. When the investment
thesis behind the replacement is not immediate, you have an unrealized short-term capital
gain in this position, and you have held this position for at least 10 months, this fund will
be held until its holding period exceeds 12 months when it qualifies for long-term capital
gains tax rate.
• W&SBS does not initiate tax-loss harvesting on your behalf. W&SBS will take your request
to harvest losses in November and December of each year, and you may request amounts
and whether the losses are to be short-term or long-term. We may, in our discretion,
determine whether we can meet your request. W&SBS decides which funds to liquidate.
The identified funds are sold and replaced by exchange traded funds of similar market
exposure to the Program Funds in your Wealth Solutions Model. These exchange traded
funds are then replaced with the Program Funds in your Wealth Solutions Model in
January of the subsequent year.
Program Funds
W&SBS, through the use of an affiliated sub-adviser, Fort Washington Investment Advisors, Inc.
(the “Sub-Adviser” or “FWIA”), constructs the asset allocation for each Wealth Solutions Model
using different Program Funds and different target weightings of asset classes, taking into account
risk tolerance, time horizon, need, preference, and other pertinent factors. The Sub-Adviser is
solely responsible for determining the particular asset classes and asset allocations that are
appropriate for various Wealth Solutions Models. The Sub-Adviser will periodically review the
asset allocation of each Wealth Solutions Model. Due to various influences, such as changing
market conditions or a reclassification of a Program Fund to a different asset class, the Sub-
Adviser periodically will change the asset allocation or target weighting of a Wealth Solutions
Model. If the Sub-Adviser changes the asset allocation or target weighting of your Wealth
Solutions Model, W&SBS will automatically rebalance your account to align with the new asset
allocation or target weighting, according to the rebalancing guideline stated in your Investment
Policy Statement.
W&SBS, through the Sub-Adviser, chooses the affiliated mutual funds, unaffiliated mutual funds,
unaffiliated exchange traded funds, and unaffiliated money market funds to create the list of
Program Funds available in the W&S Wealth Solutions (the “Program List”). Certain of the
Program Funds (the “Proprietary Funds”) are advised and underwritten respectively by
Touchstone Advisors, Inc. and Touchstone Securities, Inc. (the “Affiliates”), which are affiliates of
W&SBS and the Sub-Adviser of the Proprietary Funds. In such situations, the Affiliates will receive
fees from the pertinent Proprietary Fund for serving as investment adviser and/or other service
provider to the Proprietary Fund (as detailed in the Proprietary Fund’s prospectus). These fees
will be in addition to the management fees that the Sub-Adviser receives for its ongoing
management of the W&S Wealth Solutions, which creates a financial incentive for the Sub-
Adviser to utilize Proprietary Funds. The Program List will not include mutual funds that are sub-
advised by the Sub-Adviser.
W&SBS, at the recommendation of the Sub-Adviser, can make changes to the Program List at
any time and can change the amount of your money that is invested in the different asset classes,
as well as add and remove asset classes at any time without prior notice. Adding or removing
asset classes could result in the purchase or sale of a Program Fund in your account. Liquidation
may cause a taxable event as well as additional fees and expenses charged by Program Funds
including, but not limited to, redemption and short-term trading fees.
If a Program Fund is removed from the Program List for any reason, the Program Fund can no
longer be held in your W&S Wealth Solutions account. If that occurs, we will liquidate the Program
Fund being removed and replace it with a recommended Program Fund. Until the Program Fund
designated for removal is actually removed from your account, there is a possibility that additional
shares of that Program Fund may be purchased. Such purchase(s) may occur in a number of
instances including, but not limited to, when assets are added to your account or a rebalancing
occurs. The purchase of additional shares of such Program Fund and the eventual mandatory
removal of such shares may result in a taxable event. The replacement Program Fund may be
subject to higher internal expenses than the prior investment.
There is no guarantee that the Program Funds will perform in any particular manner. Past
performance is not a guarantee of future results. It is important that you read the prospectus of
each pertinent Program
Fund before investing in the W&S Wealth Solutions. Further details about
a Program Fund can be found in its Statement of Additional Information (“SAI”) and shareholder
reports.
Investment Discretion
When you decide to invest in the W&S Wealth Solutions, you will sign a client agreement
indicating that you agree to all of its terms and conditions. By signing the client agreement, you
give W&SBS and the Sub-Adviser investment discretion, and you give W&SBS trading authority
over your account. You do not give W&SBS the authority to choose or change your account’s
Wealth Solutions Model.
The discretionary investment authority you give to W&SBS and the Sub-Adviser includes the
following:
• Selecting the Program Funds for your account’s Wealth Solutions Model;
• Removing Program Funds from the Program List and your account;
• Replacing a Program Fund in your account with another recommended Program Fund;
• Determining the asset allocations and changing an asset allocation at any time; and
• Adding and removing asset classes, which could result in the purchase of Program Funds
to fill the newly added asset class or sale of a Program Fund to support the removal of an
asset class.
The discretionary investment and trading authority you give to W&SBS includes the following:
• Using discretion as to the time W&SBS will make a trade in your account and the price we
will pay for investments in accordance with our obligation of best execution;
• Aggregating trades;
• Investing funds and reinvesting all dividends and proceeds earned by your account into
Program Funds;
• Automatically buying and selling Program Funds to rebalance your account to the target
asset allocation, when determined necessary by W&SBS;
• Deducting cash, selling money market shares, or selling mutual fund shares and deducting
the proceeds from your account, to pay W&SBS your W&S Wealth Solutions Fee (as
discussed below);
• Determining the appropriate mutual fund share classes for investment in the W&S Wealth
Solutions, which may not be the lowest-priced share class available in the particular
mutual fund;
• Converting mutual fund shares into another mutual fund share class;
• Terminating your account at any time;
• Liquidating the Program Funds in your account if W&SBS terminates your account; and
• Converting mutual fund shares from an advisory share class to an appropriate non-
advisory share class if you or W&SBS terminates your account.
• For an account with an Investment Objective of Tax Aware, liquidating Program Funds in
your account, if you request tax loss harvesting in November and December of each year.
You should understand that mutual funds generally offer multiple share classes depending on
certain eligibility and purchase requirements. For instance, in addition to the more commonly
offered retail share classes (typically, Class A and C shares), mutual funds may also offer
institutional share classes and other share classes that are specifically designed for accounts that
participate in fee-based investment advisory programs. Institutional share classes or classes of
shares designed for purchase in an investment advisory program usually have a lower expense
ratio than other share classes. However, you should not assume that you will be invested in the
share class with the lowest possible expense ratio or that a particular mutual fund company will
allow all share classes to be available in the W&S Wealth Solutions. While W&SBS and the Sub-
Adviser generally seek to obtain the lowest cost share class available, you may not, at all times,
hold the lowest cost share class available. W&SBS and the Sub-Adviser will periodically review
the universe and exercise the right to review and seek to improve your share class. W&SBS has
the discretion to convert your share classes at any time. In addition, should you terminate your
W&S Wealth Solutions account, certain Program Funds may no longer allow you to continue to
hold a specified share class and may convert your share class without prior notification.
The discretionary investment authority you give to W&SBS and the Sub-Adviser can be exercised
any time without prior notice to you. Similarly, the trading authority you give to W&SBS can be
exercised at any time and without prior notice to you.
Fees and Compensation
You will pay asset-based fees for each W&S Wealth Solutions account you open (the “W&S
Wealth Solutions Fee”), less any applicable fee reduction (as discussed more fully below). The
W&S Wealth Solutions Fee will be deducted from your account quarterly.
In addition to your W&S Wealth Solutions Fee, the Program Funds in which your account invests
have internal fees and expenses that are described in the prospectus of each pertinent Program
Fund. These internal fees and expenses vary depending upon the particular Program Fund.
W&S Wealth Solutions Fee
The W&S Wealth Solutions Fee is an asset-based fee for certain investment advisory services,
including:
• Investment model construction and ongoing asset allocation guidance to distribute your
money appropriately across different asset classes;
• Custodial and clearing services provided by Pershing, LLC (“Pershing”), an unaffiliated
fully disclosed clearing firm for W&SBS, as clearing firm and custodian;
• Transaction costs and fees for trades, all of which are executed through Pershing;
• Ongoing due diligence, monitoring and portfolio management;
• Dynamic rebalancing so that your portfolio stays aligned with your investment goals and
appropriate level of risk;
• Quarterly performance reports;
• Upon your request and instructions to Pershing, systematic additions/withdrawals within
your W&S Wealth Solutions account at Pershing, customized to your needs; and
• Ongoing personal investment advice and service from your W&SBS financial advisor.
The amount of the W&S Wealth Solutions Fee will depend on the market value of your W&S
Wealth Solutions account.
Value of
Assets in
Account
Annual Fee Rate
First $250,000 1.50%
Next $250,000 1.40%
Next $250,000 1.30%
Thereafter 1.10%
The following minimum quarterly fee applies:
• For an account with an Investment Objective of Total Return, Income Oriented, Socially
Conscious and Tax Aware, the minimum quarterly fee is $500 for a full quarter.
• For an account with an Investment Objective of EnFocus™, the minimum quarterly fee is
$250 for a full quarter.
How the W&S Wealth Solutions Fee Is Calculated and Paid
The W&S Wealth Solutions Fee is based on the market value of all assets held in your account,
including cash, cash equivalents, and shares of affiliated mutual funds, unaffiliated mutual funds,
unaffiliated exchange traded funds, and third-party money market funds. The W&S Wealth
Solutions Fee is comprised of fees assessed at annual rates (shown above). As the value of the
assets in your account increases or decreases, you are charged according to the applicable tiered
fee schedule set forth above.
The W&S Wealth Solutions Fee will reduce the account’s overall returns and performance.
The W&S Wealth Solutions Fee is charged to your account each quarter, in advance. If your W&S
Wealth Solutions account is opened for part of a quarter, then your W&S Wealth Solutions Fee
will be prorated based on the number of days your account has been open and invested in the
W&S Wealth Solutions. The amount you pay is determined by the market value of the assets in
your account as of the last business day of the previous calendar quarter.
Upon instruction to Pershing, you may also withdraw assets from your W&S Wealth Solutions
account at any time, subject to the usual and customary settlement procedures. All withdrawals
are first funded from the amount in your cash or money market funds in your account. If the
amount maintained in cash or money market funds is not enough to meet a withdrawal request,
the remaining amount of the withdrawal request will be satisfied by redeeming other investments
held in your account. Withdrawals may have tax consequences such as capital gain taxes, or may
be subject to other charges assessed by mutual fund companies or Pershing.
The W&S Wealth Solutions Fee is deducted directly from your W&S Wealth Solutions account
and paid using the cash portion of the Wealth Solutions Model in which you are invested, which
may include cash or assets invested in a money market fund. If there is insufficient cash or assets
in the money market fund, we are authorized to sell a sufficient amount of assets to pay the W&S
Wealth Solutions Fee. If W&SBS sells assets, this may trigger a rebalance of your account. Such
transactions will be effected without regard for tax consequences. You will likely have to pay
redemption fees to the pertinent mutual fund company if those shares were held for only a short
time. (See below for more information on redemption fees.) Trades as a result of a liquidation of
a mutual fund in a taxable account may result in a taxable event.
Other Fees and Expenses
Internal Fees and Expenses of the Program Funds; Possible Redemption Fees. Each Program
Fund (including the Proprietary Funds) has internal management fees and ongoing expenses that
are deducted from the Program Fund’s assets, which has the effect of reducing the Program
Fund’s net asset value (“NAV”). These are the standard fees and expenses that all fund
shareholders pay. Internal Program Fund fees and expenses vary depending on the particular
Program Fund. Many Program Funds used in the W&S Wealth Solutions have different share
classes with different internal expenses. The prospectus for each Program Fund will describe the
standard fees and expenses and the internal fees and expenses. Expenses may include fees paid
by the Program Fund on an ongoing basis from its assets for shareholder services, distribution
and marketing expenses pursuant to Rule 12b-1 under the Investment Company Act of 1940
(“Rule 12b-1 Fees”). W&SBS and the Sub-Adviser strive to use the lowest cost share class
possible given the investment amount in the fund. Certain mutual funds waive the minimum
investment amount for their lower cost share classes, but some, including Proprietary Funds, may
not make their lower cost share classes available unless the stated minimum investment amount
is met. Therefore, it may be necessary in some circumstances to use another share class with
higher fees, which in some cases may include Rule 12b-1 Fees. Rule 12b-1 Fees are paid to
Pershing, and W&SBS does not benefit from using share classes that include Rule 12b-1 Fees in
the W&S Wealth Solutions. W&SBS does receive Rule 12b-1 Fees in its brokerage capacity.
Internal fees and expenses are in addition to the W&S Wealth Solutions Fee described above.
You will not see a separate entry on your account statement showing these fees and expenses;
rather, the return of the Program Fund is shown net of expenses.
Certain Program Funds may also impose redemption fees if the mutual fund was held for only a
short time (typically anywhere from 30 days to 12 months). The prospectus and SAI will describe
whether the fund company has a redemption charge and whether there are instances when the
redemption fees will be waived.
Any internal fees and expenses charged by a Program Fund, as well as the fee you pay for the
W&S Wealth Solutions, will affect your account’s investment performance.
Fee Layering. Investing through an advisory account such as the W&S Wealth Solutions into
Program Funds, whether affiliated or unaffiliated, results in the payment of two or more levels of
investment management fees, one to the adviser at the advisory account level (the W&S Wealth
Solutions Fee) and another charged at the fund level to the manager of the investment fund (the
Program Fund management fee). If the investment fund in turn invests in underlying funds, or is
sub-advised by another adviser, an additional layer of fees and expenses may occur. There is no
reduction of the W&S Wealth Solutions Fee to offset the layering of fees that results from investing
in a Program Fund, whether the Program Fund is affiliated or unaffiliated.
Affiliated Mutual Funds: The investment adviser and the underwriter/broker-dealer to each of the
Proprietary Funds are affiliates of W&SBS and receive fees from the pertinent Proprietary Fund
for serving in these capacities. These fees are in addition to the W&S Wealth Solutions Fee, which
creates a financial incentive for W&SBS and the Sub-Adviser to utilize Proprietary Funds in the
W&S Wealth Solutions program. As discussed below in Item 6 – Portfolio Manager Selection and
Evaluation, in selecting and retaining Program Funds, W&SBS and the Sub-Adviser subject the
Proprietary Funds and unaffiliated funds to the same investment screening and initial and ongoing
evaluation process to determine their eligibility for inclusion in the program.
Other Fees and Expenses Paid to Pershing. In addition to the W&S Wealth Solutions Fee, clients
using the W&S Wealth Solutions may incur other fees and expenses charged by Pershing and
paid directly from their accounts. These charges may include but are not limited to wired funds,
overnight check delivery, margin extension, insufficient funds and returned checks, retirement
account termination fee, full outgoing account transfers fee for non-retirement account, braille
statements, and large print statements. The custodian will charge a processing fee for an
Unrelated Business Taxable Income Tax Returns (IRS Form 990-T), which should be a rare
occurrence in the W&S Wealth Solutions.
Rule 12b-1 Fees: Mutual fund companies, including the investment managers of the Proprietary
Funds, or their affiliates may pay Rule 12b-1 Fees to Pershing for distribution and marketing
expenses. W&SBS does not benefit from Program Funds that include Rule 12b-1 Fees in the
W&S Wealth Solutions. W&SBS does receive Rule 12b-1 Fees in its brokerage capacity.
Potential Fee Reductions
If your W&S Wealth Solutions account is funded from an account you held at W&SBS that incurred
commissions or redemption fees within thirty-six (36) months, the W&S Wealth Solutions Fee will
be reduced for up to twenty-four (24) full months in which the account is active in the W&S Wealth
Solutions program. The amount of the fee reduction will depend on the timing of trade activity for
such security, or other characteristics of the account activity in the previous W&SBS account. Ask
your financial advisor for additional information about potential fee reductions. Any fee reductions
will be applied in accordance with policies established by W&SBS, which may be amended from
time to time. If you close your account in the W&S Wealth Solutions program before receiving the
entire fee reduction, you may not receive any of the remaining fee reduction that may have been
available for your account.
If you are selling securities to invest in the W&S Wealth Solutions but did not purchase them
through W&SBS, you will not receive a fee reduction.
In addition, the W&S Wealth Solutions Fee may be lower than the above schedules should you
negotiate a lower W&S Wealth Solutions Fee. However, reducing the W&S Wealth Solutions Fee
is at the sole discretion of W&SBS.
Financial Advisor Compensation; Comparing Costs and Expenses
Your financial advisor receives a portion of the W&S Wealth Solutions Fee. As a result, your
financial advisor has a financial incentive not to negotiate the W&S Wealth Solutions Fee. The
portion of the W&S Wealth Solutions Fee paid to your financial advisor is at the discretion of
W&SBS. The fee rate paid to your financial advisor will be the same regardless of your Wealth
Solutions Model. As a result, your financial advisor does not have a financial incentive to
recommend one Wealth Solutions Model over another.
You can choose to forgo the services of the W&S Wealth Solutions and buy and sell assets
through W&SBS as a broker-dealer (though not all Program Funds are available when W&SBS
acts as a broker-dealer) or through other brokers or agents unaffiliated with W&SBS. If you
purchase these investments through W&SBS as a broker-dealer, you will pay sales charges or
commissions, a portion of which would be paid to your financial advisor. A financial advisor will
typically earn more in upfront fees and commissions initially when you use brokerage services. In
the alternative, a financial advisor will typically earn more over time if you invest in the W&S
Wealth Solutions. This creates a conflict of interest and a financial incentive for the financial
advisor to recommend the W&S Wealth Solutions instead of brokerage services.
The assets under the care of W&SBS, both within the Wealth Solutions Models and otherwise,
will impact your financial advisor’s eligibility for additional compensation, award or other financial
incentive.
Financial advisors are eligible to participate in the Western & Southern Life Awards and
Recognition Program (“Award Program”), which includes domestic and international travel.
Eligibility for an Award Program is based upon the amount of new and existing assets under care
for a financial advisor, including assets in the W&S Wealth Solutions program attributable to the
financial advisor. Thus, a financial advisor may have a financial incentive to recommend investing
in, or continued participation in, the W&S Wealth Solutions over other programs or services.
Again, as outlined above, before you invest with W&SBS, we will complete, on the basis of
information you provide, an Investment Services Questionnaire and custodial account agreement
that contains important information about your account, generally including your time horizon, risk
tolerance, need, preference, and other pertinent factors. Your time horizon will reflect the period
over which you expect to be accumulating and/or distributing your investments, thus assisting
W&SBS in assessing whether a traditional brokerage account or the W&S Wealth Solutions is
most appropriate for you.