What Else You Should Know About Fee-Based Accounts?

In an asset-based fee relationship, you pay a fee (charged quarterly) based on your level of assets for the advice and services provided by your financial advisor as part of the advisory relationship. This fee is based on the level of assets in your account, independent of the level of trading activity. By deciding to pay a fee based on services provided rather than transactions, you should understand that the fee may be higher than the cost of a commission alternative during periods of lower trading activity.

You should also know that the advisory fee charged in the Passport investment account is in addition to the management fees and operating expenses charged by open-end, closed-end and exchange-traded funds. To the extent that you intend to hold fund shares for an extended period of time, these internal fund expenses should be added to the advisory fee when evaluating the costs of a Passport account. Additionally, certain mutual fund families impose short-term trading charges (typically 1% to 2% of the original amount invested) which are generally NOT waived for fee-based accounts.

Additional Considerations
You should consider the following factors when deciding if a fee-based account is right for you: i) your past and anticipated investment activity, ii) past and anticipated use of the products and services available in the account, iii) the value and type of eligible assets, iv) the costs and potential benefits of the service, v) investment objectives and goals, vi) additional financial and planning services provided by your financial advisor, vii) personal preferences concerning available payment alternatives.

You should also consider whether it would be better to pay separately for each trade executed and each product and service used. Since these factors may change, you should periodically re-evaluate whether the ongoing use of a particular asset-based fee program continues to be appropriate for your needs.
Ask your financial advisor for a complete schedule of charges, available in Form ADV Part II or the client agreement.