The fee schedules for the Compass Account programs are as shown on Schedules D, E and F within
the Compass Agreement.
Methods of Compensation
Thurston Springer will base fee charges on 1) One of three fee schedules and/or 2) A flat fee rate
and/or breakpoint and/or 3) An hourly rate. Depending on various factors, advisory fees are
negotiable. Minimum annual fees apply as follows: $600 for a Mutual Fund Account, and $1,200 for
an Individual Securities account. A breakpoint is defined as a dollar amount discount that qualifies
the client for a reduced fee, even though the actual amount of assets managed may be lower.
The Fee Schedules for advisory services have been outlined on the charts within the Compass
Account Agreement. If an account value falls below the minimum account value criteria, and the
Client has no other assets to add to the account, and no other accounts which to combine for
purposes of meeting the minimum account value, Thurston Springer advises the Investment
Advisor Representative to evaluate changing the account from a fee-based to a commission-based
account.
Flat fee Rate. You are able to choose a flat rate instead of a fee schedule. When a flat rate is
selected, the flat rate is a fixed charge, and any reference to householding or to asset type
discounts does not apply.
Hourly fees include non-continuous advice that a client requires for a particular situation. This
Agreement does not capture information relating to an hourly fee amount nor a description of the
services provided for the hourly fee. When an hourly fee is to be charged, the Advisor Representative
will use the Financial Planning Engagement Agreement to disclose the fee and services to be
provided.
Advisor Representatives also provide consultation services on various matters such as Retirement
Plan Consulting, Net-Worth Accumulation, Household Money Management, Portfolio Manager
Selection, and/or Individual 401(k), or 403(b) Review or Management. For example, a client may
want their Advisor Representative to review their 401(k) account that is held through their employer
in order to take a holistic approach to managing their entire investment portfolio. Providing such
review could give the Advisor Representative the opportunity to alert the client to a lack of
diversification, an over-concentration, expensive assets, risky investments, and such. A fee will be
charged for this extra service. The fee will be assessed by charging an hourly rate or increasing the
annual fee. The additional service fee will be waived or reduced to the extent that a client uses
Thurston Springer for brokerage or advisory services. Client can terminate these services in writing
at any time and request a refund of the unused portion of the fee.
Features of the Compass Account Wrap Program that Comprise the Costs of the Account
A. The Compass Account is a wrap-fee program, providing portfolio management services.
There are four managed model account programs available including:
1. Managed Mutual Fund Portfolio composed of mutual funds only, and,
2. Individually Managed Securities Portfolio, which is composed of stocks, bonds, mutual funds,
exchange traded funds, and other investments,
3. Tactical Momentum, and
4. Earnings Momentum.
Selection of the portfolio manager includes:
1. The Advisor Firm: Thurston Springer; or
2. The Advisor Representative: your Financial Advisor
The choice as to whether or not the client pays a ticket charge per transaction is based on the
anticipated trading activity in the account:
1. When ticket charges are paid by the client, the fee could be lower than a model in which ticket
charges are not paid by the client.
2. When ticket charges are not paid by the client, the fee could be higher than a model in which ticket
charges are paid by the client.
In summary, the over-all cost of the fee-based account is based on the managed model account
profile selected, the account type that is selected, as well as how many transactions are expected
to be executed, and how charges are handled.
B. Over-all Cost: The Advisory Program could cost more or less than paying for transactions
separately. Although potentially lower cost account options are available, Client acknowledges and
agrees that choosing a fee-based account is primarily based on a relationship in which their Advisor
Representative actively manages and/or monitors their account holdings. Client’s advisory fee
could be higher or lower for similar services offered by other Advisor Representatives at the same
advisor firm, as well as at other investment advisor firms.
C. Client pays Advisor a fee for providing portfolio management services. The advisory fee is assessed
as a percentage of the assets under management (AUM) in accordance with the fee schedule
selected for Client’s account or a base or flat rate and is paid at the end of each calendar quarter. If
an account falls below the minimum AUM, Thurston Springer reserves the right to assess a
minimum fee that is disclosed in the Compass Account Agreement.
Despite the investment allocation deployed in a client’s account, the client will never be fully
invested, as Thurston Springer will always ensure a portion of the account is available as cash to
cover advisory account fees. Where a client has multiple accounts under management and certain
of those accounts do not have the ability for fees to be withdrawn, such as an IRA or 401k,
Thurston Springer will ensure that an account which has the ability to withdraw funds without
penalty or tax implications will have sufficient free cash to cover the account fees across all client
accounts under management.
In summary, the over-all cost of the fee-based account is based on the Managed Model Account
Profile selected, the account type that is selected, the number of anticipated transactions, as well
as how charges are
handled.
Wrap Fee Programs
Thurston Springer manages a Wrap Fee Program of its own, the Compass Account. Thurston
Springer, in its capacity as the advisor firm is paid for its services in managing the program, for
back-office duties, and such. The firm receives a portion of the wrap fee for our investment
advisory services and will also charge a transaction fee for broker-dealer services to offset the cost
of each transaction. If your Advisor Representative were to arrange for the investment and
management of your assets at an outside advisor firm, that firm would also be paid for providing
portfolio management services, and our firm would receive a portion for our services. Thurston
Springer as the investment advisor firm receives a portion of the wrap fee for investment advisory
services provided, which varies between 3 and 24 basis points (.03 to .24), depending on the model
chosen.
The advisory account fee will be 1) directly deducted from client’s account, 2) or paid by the client
by way of a check, or 3) directly deducted from a different brokerage or advisory account. When
the fee is deducted from client’s internal account, the advisory fee will be debited from the
specified account on the payment date. Client may also pay the advisory fee from outside funds
provided that Advisor is so notified in advance and such outside funds, sufficient to pay this fee, are
paid to Advisor on or prior to the payment date.
Other types of charges or expenses clients will pay in connection with the Compass Account
include:
Advisory account fees are exclusive of transaction fees and other related costs and expenses.
Clients will incur certain charges imposed by custodians, brokers, and third parties, such as fees
charged by managers, custodial fees, odd-lot differentials, transfer taxes, postage and handling,
electronic funds fees, and other fees and taxes on brokerage accounts and securities transactions.
These fees are usually small and are incidental to the importance of the security being purchased
or sold.
• Ticket charges per transaction will be passed on to the client depending on the Compass Account
model selected. (See Compass Account Selection for transaction charge information) However,
there are brokerage transaction charges that apply to all accounts, regardless of whether the
account is commission based or fee based.
• Mutual funds and exchange-traded funds charge internal management fees, which are disclosed in
a fund’s prospectus.
• ETFs (Exchange Traded Funds), and bonds will be billed using the corresponding fee schedule.
• Fixed income assets such as CDs (certificates of deposit), treasuries or individual bonds, taxable or
tax-free, will be purchased and sold on a net basis with no mark-up or mark-down.
• Cash in stock accounts will be billed the same rate as stocks; cash in fixed income accounts will be
billed the same rate as bonds; and cash in mutual fund accounts will be billed the same rate as
mutual funds. If an account has various assets, the cash will be billed proportionately to the
invested assets.
• If margin is used in the account, the fee will be based on the market value of the securities.
Thurston Springer charges on gross value of assets under management, not on net value.
• Liquidations: When securities are deposited into the account, they will be liquidated at the
discretion of the Advisor Representative/Portfolio Manager in order to select the investments
he/she has determined are appropriate for your Account. The standard management fees for the
asset class will apply. A large position might be sold over time in an attempt to maximize the value
of the account. Realizing that the stock price might decline, Client acknowledges the risk inherent
in such a strategy.
• Thurston Springer is also able to select load-waived (no sales charge) funds and funds designed
specifically for wrap accounts with no sales charge.
D. It is Thurston Springer’s wholehearted intent to bring each client the best value in their relationship
with our firm and representatives.
The specific manner in which fees are charged is established in a client’s written advisory
agreement. Advisory fees are charged based on assets in the account at the end of each calendar
quarter. Clients may elect to be billed directly for fees, or to authorize fees to be debited from their
accounts. Accounts initiated or terminated during a calendar quarter will be charged a pro-rated
fee.
Either party may terminate the agreement at any time by written notice. Upon receipt of notice
from the Client (or authorized representative of the Client), Thurston Springer will consider the
Agreement to be terminated. Advisor and Custodian reserve the right to finish any open
transactions and collect any earned and unpaid fees that are due and payable.
Services to be provided will include portfolio selection, execution services relative to all purchases
and sales transactions and arrangement for custody services through the Advisor’s clearing firm,
First Clearing Corporation, located in St. Louis, Missouri.
Depending on your circumstances and activity, Client could pay more for this program than s/he
would if the client participated in a brokerage account or paid an hourly fee for investment advice.
Advisor Representative receives compensation as a result of Client’s participation in this program.
The amount of this compensation could be more than what the person would receive if the Client
paid separately for investment advice, brokerage, and other services. Therefore, the Advisor has a
financial incentive to recommend this program over other services. Thurston Springer subscribes to
the Code of Ethics, both by the letter, and in the spirit of which it is mandated that customer
interests shall always be placed above those of the Advisor.
Clients have the ability to purchase investment products that we recommend through other
brokers or agents that are not affiliated with our firm.