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Item 4 - Services, Fees and Compensation

  • Description of our services, including the types of portfolio management services, provided under each program. We must indicate the wrap fee charged for each program, or, if fees vary according to a schedule, provide such schedule. Further, we are required to indicate whether fees are negotiable and identify the portion of the total fees, or range of fees, paid to portfolio managers.

    Fixed Income Portfolios FIP® utilizes primarily discounted State and Federal Tax-Exempt, and Taxable Municipal Bonds. At times, Taxable High-Yield Corporate Bonds, Foreign-Denominated Bonds, Preferred, and Convertible Preferred Stocks, Dividend Yielding Stocks, Exchange-Traded Funds (ETFs), Closed-End Mutual Funds, and other equity securities are also considered. The program emphasizes discounted high grade debt securities over equity and alternative investments, mutual funds, and other securities in order to primarily achieve both constant annual income returns and fixed income price appreciation.
     

    Fixed Income Portfolios FIP® Wrap Fee Program:

    FIP® also includes discounted taxable high-yield bonds, double tax-exempt and taxable municipal bonds, preferred and convertible preferred stocks, convertible bonds, and foreign-denominated bonds. Our firm emphasizes discounted high grade debt securities over equity and alternative investments in order to achieve both constant annual income returns and Fixed Income price appreciation. Our firm may use proceeds from bonds and cash in accounts to pick up stocks, funds or other equity securities.

    The group performs daily, in depth, independent research of debt instruments regardless of size and ratings. In-house research of all prospectuses and published updates are analyzed and stacked against both the rating agencies' opinion, and the street research reports. In addition, the same In-house research is also applied to the Municipal Debt Market in California. Near two decades of researching and investing in this space has landed our firm with a large data base of a vast California Municipal Debt issuance as well as a unique set of expertise to enable us to capitalize quickly when dislocations in this debt market occur.

    Management of Fixed Income Portfolios FIP® can be performed on a dual platform: Discretionary and Non-Discretionary fee basis (Registered Investment Advisor), and Discretionary and Non- Discretionary transactional basis through our firm's association with the broker dealer: Purshe Kaplan Sterling Investments (PKS), and their clearing operations with National Financial Services (NFS). Additionally, the broker-dealers we do advisory business with may clear through RBC Capital Markets LLC, Pershing LLC, Legent Clearing, Inc. Wedbush Morgan Securities and Crews & Associates, Inc. Israeli citizens will be able to open accounts with Tamar Securities, LLC which are custodied with Bank of Hapoalim domiciled in Israel. Whereby we will place the trades through Crews & Associates, Inc., an SEC registered investment advisor and FINRA/SIPC member broker-dealer.

    We seek professional Bid/Offer execution of bond trades, across all Fixed Income Desks on Wall Street. It is our motto to fight on behalf of our clients for best in class executions. In order to accomplish this optimal Bid/Offer pricing principal, we first establish multiple relationships with Fixed Income desks around the country. Second, all bond purchase Offerings are Bid on, and finally, all bond sell Offerings are put out for a Bid from at least three bond desks on Wall Street. This process ensures best in class trade executions; and therefore, substantially improves Bid/Offer pricings for the firm's clients; In many cases, and at odds with Wall Street practices, this Bid/Offer execution platform is duplicated for odd lot bond offerings where there is not enough liquidity; thereby, allowing our firm to Bid on bond Offerings at even deeper discounts then is warranted in a typical market place.

    At the end, independently of on which bond desk a Fixed Income transaction took place, all trades settle with our firm's preferred custodian; Schwab Institutional; Last, periodic ongoing reviews are scheduled with all clients. This process includes the followings: 1) Review of the entire portfolio as well as its underlying Fixed Income Securities benchmarked each quarter against their respective Fixed Income indexes, 2) Recalibrate each client's asset allocation models as his or her life circumstances change, and 3) Present consolidated reporting that incorporates the Fixed Income Portfolios FIP® with the entire holdings of the clients' other investments disciplines.

     

    Fixed Income Portfolios FIP® Wrap Fee Program Fee Schedule:

    Maximum Fee Schedule: Portfolio Management for Managed Accounts
    All Fixed Income Portfolio FIP® Accounts will adhere to the following pricing schedule:
      Assets Under Management
      Annual Net Fee Assessed *
    First $500,000
    0.75%
    Next $500,000
    0.65%
    Over $1,000,000
    0.55%

    Our firm’s fees are generally not negotiable. Further, our firm’s fees are billed on a pro-rata annualized basis quarterly in advance based on the value of your account on the last day of the previous quarter.
  • Explanation that a wrap fee program may cost you more or less than purchasing such services separately and description of the factors that bear upon the relative cost of the program, such as the cost of the services if provided separately and the trading activity in your account(s).

    A wrap fee program allows our clients to pay a specified fee for investment advisory services and for the execution of transactions. The advisory services may include portfolio management and/or advice concerning selection of other advisers, and the fee is not based directly upon transactions in your account. Your fee is bundled with our costs for executing transactions in your account(s). This results in a higher advisory fee to you. We do not charge our clients higher advisory fees based on their trading activity, but you should be aware that we may have an incentive to limit our trading activities in your account(s) because we are charged for executed trades. In order to overcome this potential conflict of interest, clients may choose to pay all transactions' costs associated with the ongoing management of their accounts. By participating in a wrap fee program, you may end up paying more or less than you would through a non-wrap fee program where a lower advisory fee is charged, but trade execution costs are normally passed directly through to you by the executing broker.
  • Description of any fees that you may pay in addition to a wrap fee, and description of the circumstances under which you may pay these fees, including, if applicable, mutual fund expenses and mark-ups, mark-downs, or spreads paid to market makers.

    You may pay custodial fees, charges imposed directly by a mutual fund, index fund, or an exchange traded fund which shall be disclosed in the fund's prospectus (i.e.; fund management fees and other fund expenses), mark-ups and mark-downs, spreads paid to market makers, wire transfer fees and other fees and taxes on brokerage accounts and securities transactions. These fees are not included within the wrap-fee you are charged by our firm.
  • If someone recommending a wrap fee program to you receives compensation as a result of your participation in the program, we must disclose this fact. Further, we are required to explain, if applicable, that the amount of the compensation may be more than what the person would receive if you participated in our other wrap fee programs or paid separately for investment advice, brokerage and other services. Finally, we must explain that someone recommending a wrap fee program may have a financial incentive to recommend the wrap fee program over other programs or services.

    We do not recommend or offer the wrap program services of other providers. Our investment advisory representatives receive a portion of the advisory fee that you pay us, either directly as a percentage of your overall fee or as their salary from our firm. In cases where our investment advisory representatives are paid a percentage of your overall advisory fee, this may create an incentive to recommend that you participate in a wrap fee program rather than a non-wrap fee program (where you would pay for trade execution costs) or brokerage account where commissions are charged. This is because, in some cases, we may stand to earn more compensation from advisory fees paid to us through a wrap fee program arrangement if your account is not actively traded.