Common use of MP PLATFORM Clause in Contracts

MP PLATFORM. In the MP Platform, the IAR assists the client in setting an appropriate investment objective and selecting a model portfolio (“Model Portfolio”) provided by LPL’s Research Department or third-party investment advisors (“Model Advisors”). The IAR provides the client with ongoing advice and monitoring relating to the Model Portfolio, is available on an ongoing basis to receive deposit and withdrawal instructions, and to convey to LPL any changes in Client’s financial circumstances, investment objectives or investment restrictions. Under the MP Platform, LPL provides ongoing discretionary investment advice regarding the investment and reinvestment of account assets in accordance with the Model Portfolio selected by the client. LPL is expected to closely track the Model Portfolio, making modifications only to redress particular account issues, including tax loss harvesting, rebalancing, tracking error from the Model Portfolio, and to ensure that investment restrictions are being followed. Fee Schedule In the Platforms, clients pay LPL, IAR and, exclusively in the case of the SMA Platform, the SMA Portfolio Manager a single fee (“Account Fee”) for advisory services and execution of transactions. Clients do not pay LPL or IARs brokerage commissions or transaction charges for execution of transactions in addition to the Account Fee. For more information regarding commissions and brokerage practices, see below under “Additional Information – Brokerage Practices.” The Account Fee is negotiable between the client and the IAR and is set out in the Account Application. The Account Fee is typically a straight percentage based on the value of all assets in the account, including cash holdings. The Account Fee also can be structured on a tiered basis, with a reduced percentage rate based on reaching certain thresholds. The maximum Account Fee is 2.50%. LPL retains up to 0.45% for its administrative, custody and clearing services. LPL, IARs, SMA Portfolio Managers and Model Advisors do not charge performance-based fees to accounts in the Platforms. In the SMA Platform, the Account Fee is paid to LPL and is shared among LPL, IAR and the SMA Portfolio Manager. LPL pays a portion of the Account Fee to the SMA Portfolio Manager, which is negotiated between LPL and the SMA Portfolio Manager and currently ranges from 0.15% to 1.00% of account assets per year. On occasion, a SMA Portfolio Manager may agree not to receive a fee. In those circumstances, LPL will not pay any of the Account Fee to the SMA Portfolio Manager and instead will retain such amounts. In the MP Platform, the Account Fee is paid to LPL and is shared between LPL and IAR. LPL has separate agreements with and pays a fee to the Model Advisors. LPL retains a fee of 0.05% of account assets per year for its services as portfolio manager of the Model Portfolio. The amount paid to Model Advisors is negotiated between LPL and the Model Advisor and currently ranges from 0.05% to 0.45% of account assets per year. LPL will not charge a fee for its services as Model Advisor for Model Portfolios designed by LPL’s Research Department. On occasion, a third party Model Advisor may agree not to receive a fee. Of the remaining portion of the Account Fee not retained by LPL or, exclusively in the case of the SMA Platform, paid to the SMA Portfolio Manager, LPL shares up to 100% (typically between 90% to 100%) of the Account Fee with the IAR based on the agreement between LPL and the IAR. For certain SMA Portfolio Manager strategies in the SMA Platform and certain Model Advisors in the MP Platform, LPL charges a higher fee than what is paid to the SMA Portfolio Manager or Model Advisor, respectively, and LPL retains the difference. In such case, the IAR will retain less of the remaining portion of the Account Fee. A portion of the fee to the IAR may be paid by the IAR to his or her LPL branch manager or another LPL representative for supervision or administrative support. Because the fee rates paid to SMA Portfolio Managers in the SMA Platform and Model Advisors in the MP Platform vary, an IAR has a financial incentive to recommend a SMA Portfolio Manager or Model Advisor that maximizes the portion of the Account Fee received by the IAR. In addition, because LPL may in certain cases charge a mark-up or retain all or a portion of a SMA Portfolio Manager’s or Model Advisor’s fee as described above, LPL has a financial incentive to include SMA Portfolio Managers and Model Advisors that accept arrangements more favorable to LPL. Because clients are responsible for negotiating and agreeing to the Account Fee and selecting a SMA Portfolio Manager or Model Advisor for an account, clients should consider carefully how the financial incentives to LPL and the IAR may affect the selection of a SMA Portfolio Manager or Model Portfolio for each Platform and specific recommendations for an account. The fees paid to SMA Portfolio Managers in the SMA Platform and to Model Advisors in the MP Platform are generally less than fees those advisors would charge a client seeking to establish a direct relationship with them outside of a wrap program. This is principally due to the fact that LPL absorbs many of the billing, administrative, and marketing expenses that would otherwise be borne by those advisors, including trading expenses for Model Advisors. SMA Portfolio Managers and Model Advisors generally have higher minimum account size requirements and fees for direct accounts because of such additional expenses. How the Account Fee is Charged LPL deducts the Account Fee and other fees and charges associated with a Manager Select account from the account. LPL calculates and deducts the Account Fee in the method described in the Account Agreement, unless other arrangements are made in writing. If a client wishes to be billed for the Account Fee, rather than a deduction directly from the account, the client needs to make a request to LPL through the IAR. Payment in Advance and Refund of Pre-Paid Fees LPL deducts the Account Fee quarterly in advance. If the Account Agreement is terminated before the end of the quarterly period, LPL will pay the client a pro-rated refund of any pre-paid quarterly Account Fee based on the number of days remaining in the quarter after the termination date. However, if the account is closed within the first six months by the client or as a result of withdrawals that bring the account value below the required minimum, LPL reserves the right to retain the pre-paid quarterly Account Fee for the current quarter in order to cover the administrative costs of establishing the account (for example, the costs related to transferring positions in and out of the account, data entry in opening the account, reconciliation of positions in order to issue performance information, and re-registration of positions). After the termination date, LPL may convert the account to a brokerage account. In a brokerage account, client is charged a commission for each transaction and the Advisory Parties have no responsibility to provide ongoing investment advice. Other Types of Fees and Expenses of LPL LPL charges fees related to a Manager Select account in addition to the Account Fee, such as miscellaneous administrative or custodial-related fees and charges. LPL notifies clients of these charges at account opening and makes available a current list of these charges on its website at ▇▇▇.▇▇▇.▇▇▇. These fees include retirement account fees and termination fees, including, for example, an annual IRA maintenance fee, an annual qualified retirement plan maintenance fee, a fee for loans processed for qualified retirement plan and 403(b)(7) plan accounts and an account termination fee for processing a full account transfer to another financial institution. These miscellaneous fees are not directly based on the costs of the transaction or service by LPL, can include a profit to LPL, and certain of the fees may be lowered or waived for certain clients. As described below under “Additional Information - Participation in Client Transactions,” if LPL as broker-dealer executes a principal transaction in a Manager Select account, LPL earns a markup or markdown in addition to the Account Fee. Fees Charged by Third Parties There are other fees and charges that are imposed by third parties other than LPL that apply to investments in SMA Platform and MP Platform accounts. As described below under “Additional Information – Brokerage Practices,” if a SMA Portfolio Manager chooses to execute a transaction through a broker-dealer other than LPL, the execution price to the client may include a commission, markup/markdown, or other fee imposed by the executing broker-dealer in addition to the Account Fee. If client holds an American Depositary Receipt (“ADR”) in an account, there can be custodial fees or taxes related to the ADR. If a client’s assets are invested in mutual funds, ETFs or other pooled investment products, clients should be aware that there will be two layers of advisory fees and expenses for those assets. Client will pay an advisory fee to the fund manager and other expenses as a shareholder of the fund. Client will also pay the Account Fee with respect to those assets. Clients generally can purchase mutual funds directly. Therefore, clients could avoid the second layer of fees by not using the advisory services of provided in the Platforms and by making their own decisions regarding the investment. Clients should understand that the share class offered for a particular mutual fund through the Platforms in many cases will not be the least expensive share class that the mutual fund makes available. Other financial services firm may offer the same mutual fund at a lower overall cost to the investor than is available through the Platforms. The sweep money market fund used in the program may be managed by the same SMA Portfolio Manager that client has appointed to manage its account or be invested in a Model Portfolio provided by the same Model Advisor. If that is the case, clients should understand that the SMA Portfolio Manager or Model Advisor and its affiliates earn fees from the sweep money market fund for managing and performing other services for the fund which will be in addition to Account Fee charged to client. Important Things to Consider About Fees on an Account • The Account Fee is an ongoing wrap fee for investment advisory services, the execution of transactions and other administrative and custodial services. The Account Fee may cost the client more than purchasing the program services separately, for example, paying fees for the advisory services of LPL, IAR and, exclusively in the case of SMA Platform accounts, the SMA Portfolio Manager, plus commissions for each transaction in the account. Factors that bear upon the cost of the account in relation to the cost of the same services purchased separately include the: • type and size of the account • historical and or expected size or number of trades for the account, and • number and range of supplementary advisory and client-related services provided to the client. • It is important to note that a client may or may not be able to purchase advisory services directly from the SMA Portfolio Managers or Model Advisors, as they often do not offer such services for client accounts of the size typically associated with wrap programs. If they do offer such services to accounts the size of a program account, they often charge a higher fee as they do not enjoy the economies of scale related to providing services to clients of a wrap program. • The Account Fee may be higher than the fees charged by other investment advisors for similar services. This is the case in particular if the Account Fee is at or near the maximum Account Fee set out above. The IAR is responsible for determining the Account Fee to charge each client based on factors such as total amount of assets involved in the relationship, type of securities to be held in the account (e.g., mutual funds vs. individual securities), the complexity and mix of the portfolio, the fees associated with the SMA Portfolio Manager or Model Advisor, and the number and range of supplementary advisory and client-related services to be provided to the account. Clients should consider the level and complexity of the advisory services to be provided when negotiating the Account Fee with IAR. • Clients should consider the impact of fees and expenses on their investment portfolio, as described in the informational brochure titled “How Fees and Expenses Affect Your Portfolio” on the ▇▇▇.▇▇▇ Investor Regulatory Resources page.

MP PLATFORM. In the MP Platform, the IAR assists the client in setting an appropriate investment objective and selecting a model portfolio (“Model Portfolio”) provided by LPL’s Research Department or third-party investment advisors (“Model Advisors”). The IAR provides the client with ongoing advice and monitoring relating to the Model Portfolio, is available on an ongoing basis to receive deposit and withdrawal instructions, and to convey to LPL any changes in Client’s financial circumstances, investment objectives or investment restrictions. Under the MP Platform, LPL provides ongoing discretionary investment advice regarding the investment and reinvestment of account assets in accordance with the Model Portfolio selected by the client. LPL is expected to closely track the Model Portfolio, making modifications only to redress particular account issues, including tax loss harvesting, rebalancing, tracking error from the Model Portfolio, and to ensure that investment restrictions are being followed. Fee Schedule In the Platforms, clients pay LPL, IAR and, exclusively in the case of the SMA Platform, the SMA Portfolio Manager a single fee (“Account Fee”) for advisory services and execution of transactions. Clients do not pay LPL or IARs brokerage commissions or transaction charges for execution of transactions in addition to the Account Fee. For more information regarding commissions and brokerage practices, see below under “Additional Information – Brokerage Practices.” The Account Fee is negotiable between the client and the IAR and is set out in the Account Application. The Account Fee is typically a straight percentage based on the value of all assets in the account, including cash holdings. The Account Fee also can be structured on a tiered basis, with a reduced percentage rate based on reaching certain thresholds. The maximum Account Fee is 2.50%, although certain legacy accounts may remain under the higher previous maximum of 3%. LPL retains up to 0.45% for its administrative, custody and clearing services. LPL, IARs, SMA Portfolio Managers and Model Advisors do not charge performance-based fees to accounts in the Platforms. In the SMA Platform, the Account Fee is paid to LPL and is shared among LPL, IAR and the SMA Portfolio Manager. LPL pays a portion of the Account Fee to the SMA Portfolio Manager, which is negotiated between LPL and the SMA Portfolio Manager and currently ranges from 0.15% to 1.00% of account assets per year. On occasion, a SMA Portfolio Manager may agree not to receive a fee. In those circumstances, LPL will not pay any of the Account Fee to the SMA Portfolio Manager and instead will retain such amounts. In the MP Platform, the Account Fee is paid to LPL and is shared between LPL and IAR. LPL has separate agreements with and pays a fee to the Model Advisors. LPL retains a fee of 0.05% of account assets per year for its services as portfolio manager of the Model Portfolio. The amount paid to In addition, the Model Advisors receives a fee that is negotiated between LPL and the Model Advisor and currently ranges from 0.05% to 0.45% of account assets per year. LPL will not charge a fee for its services as Model Advisor for Model Portfolios designed by LPL’s Research Department. On occasion, a third party Model Advisor may agree not to receive a fee. When a Model Advisor does not receive a fee, it is often because the Model Advisors have included proprietary or affiliated mutual funds or exchange-traded funds in the Investment Strategy which charges a management fee. This management fee can be found in the prospectus of the mutual fund or exchange traded funds included in the Investment Strategy. When the Model Advisor does not charge a fee, Client account statements will continue to display a fee of 0.05%, which is a fee charged by LPL that is not shared with the Model Advisor. Of the remaining portion of the Account Fee not retained by LPL or, exclusively in the case of the SMA Platform, paid to the SMA Portfolio Manager, LPL shares up to 100% (typically between 90% to 100%) of the Account Fee with the IAR based on the agreement between LPL and the IAR. For certain SMA Portfolio Manager strategies in the SMA Platform and certain Model Advisors in the MP Platform, LPL charges a higher fee than what is paid to the SMA Portfolio Manager or Model Advisor, respectively, and LPL retains the difference. In such case, the IAR will retain less of the remaining portion of the Account Fee. A portion of the fee to the IAR may be paid by the IAR to his or her LPL branch manager or another LPL representative for supervision or administrative support. Because the fee rates paid to SMA Portfolio Managers in the SMA Platform and Model Advisors in the MP Platform vary, an IAR has a financial incentive to recommend a SMA Portfolio Manager or Model Advisor that maximizes the portion of the Account Fee received by the IAR. In addition, because LPL may in certain cases charge a mark-up ▇▇▇▇-up or retain all or a portion of a SMA Portfolio Manager’s or Model Advisor’s fee as described above, LPL has a financial incentive to include SMA Portfolio Managers and Model Advisors that accept arrangements more favorable to LPL. Because clients are responsible for negotiating and agreeing to the Account Fee and selecting a SMA Portfolio Manager or Model Advisor for an account, clients should consider carefully how the financial incentives to LPL and the IAR may affect the selection of a SMA Portfolio Manager or Model Portfolio for each Platform and specific recommendations for an account. The fees paid to SMA Portfolio Managers in the SMA Platform and to Model Advisors in the MP Platform are generally less than fees those advisors would charge a client seeking to establish a direct relationship with them outside of a wrap program. This is principally due to the fact that LPL absorbs many of the billing, administrative, and marketing expenses that would otherwise be borne by those advisors, including trading expenses for Model Advisors. SMA Portfolio Managers and Model Advisors generally have higher minimum account size requirements and fees for direct accounts because of such additional expenses. How the Account Fee is Charged LPL deducts the Account Fee and other fees and charges associated with a Manager Select account from the account. LPL calculates and deducts the Account Fee in the method described in the Account Agreement, unless other arrangements are made in writing. If a client wishes to be billed for the Account Fee, rather than a deduction directly from the account, the client needs to make a request to LPL through the IAR. Payment in Advance and Refund of Pre-Paid Fees LPL deducts the Account Fee quarterly in advance. If the Account Agreement is terminated before the end of the quarterly period, LPL will pay the client a pro-rated refund of any pre-paid quarterly Account Fee based on the number of days remaining in the quarter after the termination date. However, if the account is closed within the first six months by the client or as a result of withdrawals that bring the account value below the required minimum, LPL reserves the right to retain the pre-paid quarterly Account Fee for the current quarter in order to cover the administrative costs of establishing the account (for example, the costs related to transferring positions in and out of the account, data entry in opening the account, reconciliation of positions in order to issue performance information, and re-registration of positions). After the termination date, LPL may convert the account to a brokerage account. In a brokerage account, client is charged a commission for each transaction and the Advisory Parties have no responsibility to provide ongoing investment advice. Other Types of Fees and Expenses of LPL LPL charges fees related to a Manager Select account in addition to the Account Fee, such as miscellaneous administrative or custodial-related fees and charges. LPL notifies clients of these charges at account opening and makes available a current list of these charges on its website at ▇▇▇.▇▇▇.▇▇▇. These fees include retirement account fees and termination fees, including, for example, an annual IRA ▇▇▇ maintenance fee, an annual qualified retirement plan maintenance fee, a fee for loans processed for qualified retirement plan and 403(b)(7) plan accounts and an account termination fee for processing a full account transfer to another financial institution. These miscellaneous fees are not directly based on the costs of the transaction or service by LPL, can include a profit to LPL, and certain of the fees may be lowered or waived for certain clients. As described below under “Additional Information - Participation in Client Transactions,” if LPL as broker-dealer executes a principal transaction in a Manager Select account, LPL earns a markup or markdown in addition to the Account Fee. Fees Charged by Third Parties There are other fees and charges that are imposed by third parties other than LPL that apply to investments in SMA Platform and MP Platform accounts. As described below under “Additional Information – Brokerage Practices,” if a SMA Portfolio Manager chooses to execute a transaction through a broker-dealer other than LPL, the execution price to the client may include a commission, markup/markdown, or other fee imposed by the executing broker-dealer in addition to the Account Fee. If client holds an American Depositary Receipt (“ADR”) in an account, there can be custodial fees or taxes related to the ADR. If a client’s assets are invested in mutual funds, ETFs or other pooled investment products, clients should be aware that there will be two layers of advisory fees and expenses for those assets. Client will pay an advisory fee to the fund manager and other expenses as a shareholder of the fund. Client will also pay the Account Fee with respect to those assets. Clients generally can purchase mutual funds directly. Therefore, clients could avoid the second layer of fees by not using the advisory services of provided in the Platforms and by making their own decisions regarding the investment. Clients should understand that the share class offered for a particular mutual fund through the Platforms in many cases will not be the least expensive share class that the mutual fund makes available. Other financial services firm may offer the same mutual fund at a lower overall cost to the investor than is available through the Platforms. The sweep money market fund used in the program may be managed by the same SMA Portfolio Manager that client has appointed to manage its account or be invested in a Model Portfolio provided by the same Model Advisor. If that is the case, clients should understand that the SMA Portfolio Manager or Model Advisor and its affiliates earn fees from the sweep money market fund for managing and performing other services for the fund which will be in addition to Account Fee charged to client. Clients also incur charges imposed by third parties or LPL in connection with investments made through their accounts, including, but not limited to, taxes and charges required by law or imposed by exchanges or regulatory bodies. For example, an industry-wide charge mandated by a regulator applies to sales of certain securities. The amount of this regulatory fee may vary over time, and because variations might not be immediately known to LPL, the amount may be estimated and assessed in advance. To the extent that such estimated amount differs from the actual amount of the regulatory fee, LPL retains the excess. These charges will be reflected on transaction confirmations and/or monthly statements. Important Things to Consider About Fees on an Account • The Account Fee is an ongoing wrap fee for investment advisory services, the execution of transactions and other administrative and custodial services. The Account Fee may cost the client more than purchasing the program services separately, for example, paying fees for the advisory services of LPL, IAR and, exclusively in the case of SMA Platform accounts, the SMA Portfolio Manager, plus commissions for each transaction in the account. Factors that bear upon the cost of the account in relation to the cost of the same services purchased separately include the: • type and size of the account • historical and or expected size or number of trades for the account, and • number and range of supplementary advisory and client-related services provided to the client. • It is important to note that a client may or may not be able to purchase advisory services directly from the SMA Portfolio Managers or Model Advisors, as they often do not offer such services for client accounts of the size typically associated with wrap programs. If they do offer such services to accounts the size of a program account, they often charge a higher fee as they do not enjoy the economies of scale related to providing services to clients of a wrap program. • The Account Fee may be higher than the fees charged by other investment advisors for similar services. This is the case in particular if the Account Fee is at or near the maximum Account Fee set out above. The IAR is responsible for determining the Account Fee to charge each client based on factors such as total amount of assets involved in the relationship, type of securities to be held in the account (e.g., mutual funds vs. individual securities), the complexity and mix of the portfolio, the fees associated with the SMA Portfolio Manager or Model Advisor, and the number and range of supplementary advisory and client-related services to be provided to the account. Clients should consider the level and complexity of the advisory services to be provided when negotiating the Account Fee with IAR. • Clients should consider the impact of fees and expenses on their investment portfolio, as described in the informational brochure titled “How Fees and Expenses Affect Your Portfolio” on the ▇▇▇.▇▇▇ Investor Regulatory Resources page.

MP PLATFORM. In the MP Platform, the IAR assists the client in setting an appropriate investment objective and selecting a model portfolio (“Model Portfolio”) provided by LPL’s Research Department or third-party investment advisors (“Model Advisors”). The IAR provides the client with ongoing advice and monitoring relating to the Model Portfolio, is available on an ongoing basis to receive deposit and withdrawal instructions, and to convey to LPL any changes in Client’s financial circumstances, investment objectives or investment restrictions. Under the MP Platform, LPL provides ongoing discretionary investment advice regarding the investment and reinvestment of account assets in accordance with the Model Portfolio selected by the client. LPL is expected to closely track the Model Portfolio, making modifications only to redress particular account issues, including tax loss harvesting, rebalancing, tracking error from the Model Portfolio, and to ensure that investment restrictions are being followed. Fee Schedule In the Platforms, clients pay LPL, IAR and, exclusively in the case of the SMA Platform, the SMA Portfolio Manager a single fee (“Account Fee”) for advisory services and execution of transactions. Clients do not pay LPL or IARs brokerage commissions or transaction charges for execution of transactions in addition to the Account Fee. For more information regarding commissions and brokerage practices, see below under “Additional Information – Brokerage Practices.” The Account Fee is negotiable between the client and the IAR and is set out in the Account Application. The Account Fee is typically a straight percentage based on the value of all assets in the account, including cash holdings. The Account Fee also can be structured on a tiered basis, with a reduced percentage rate based on reaching certain thresholds. The maximum Account Fee is 2.50%. LPL retains up to 0.45% for its administrative, custody and clearing services. LPL, IARs, SMA Portfolio Managers and Model Advisors do not charge performance-based fees to accounts in the Platforms. In the SMA Platform, the Account Fee is paid to LPL and is shared among LPL, IAR and the SMA Portfolio Manager. LPL pays a portion of the Account Fee to the SMA Portfolio Manager, which is negotiated between LPL and the SMA Portfolio Manager and currently ranges from 0.15% to 1.00% of account assets per year. On occasion, a SMA Portfolio Manager may agree not to receive a fee. In those circumstances, LPL will not pay any of the Account Fee to the SMA Portfolio Manager and instead will retain such amounts. In the MP Platform, the Account Fee is paid to LPL and is shared between LPL and IAR. LPL has separate agreements with and pays a fee to the Model Advisors. LPL retains a fee of 0.05% of account assets per year for its services as portfolio manager of the Model Portfolio. The amount paid to Model Advisors is negotiated between LPL and the Model Advisor and currently ranges from 0.05% to 0.45% of account assets per year. LPL will not charge a fee for its services as Model Advisor for Model Portfolios designed by LPL’s Research Department. On occasion, a third party Model Advisor may agree not to receive a fee. Of the remaining portion of the Account Fee not retained by LPL or, exclusively in the case of the SMA Platform, paid to the SMA Portfolio Manager, LPL shares up to 100% (typically between 90% to 100%) of the Account Fee with the IAR based on the agreement between LPL and the IAR. For certain SMA Portfolio Manager strategies in the SMA Platform and certain Model Advisors in the MP Platform, LPL charges a higher fee than what is paid to the SMA Portfolio Manager or Model Advisor, respectively, and LPL retains the difference. In such case, the IAR will retain less of the remaining portion of the Account Fee. A portion of the fee to the IAR may be paid by the IAR to his or her LPL branch manager or another LPL representative for supervision or administrative support. Because the fee rates paid to SMA Portfolio Managers in the SMA Platform and Model Advisors in the MP Platform vary, an IAR has a financial incentive to recommend a SMA Portfolio Manager or Model Advisor that maximizes the portion of the Account Fee received by the IAR. In addition, because LPL may in certain cases charge a mark-up ▇▇▇▇-up or retain all or a portion of a SMA Portfolio Manager’s or Model Advisor’s fee as described above, LPL has a financial incentive to include SMA Portfolio Managers and Model Advisors that accept arrangements more favorable to LPL. Because clients are responsible for negotiating and agreeing to the Account Fee and selecting a SMA Portfolio Manager or Model Advisor for an account, clients should consider carefully how the financial incentives to LPL and the IAR may affect the selection of a SMA Portfolio Manager or Model Portfolio for each Platform and specific recommendations for an account. The fees paid to SMA Portfolio Managers in the SMA Platform and to Model Advisors in the MP Platform are generally less than fees those advisors would charge a client seeking to establish a direct relationship with them outside of a wrap program. This is principally due to the fact that LPL absorbs many of the billing, administrative, and marketing expenses that would otherwise be borne by those advisors, including trading expenses for Model Advisors. SMA Portfolio Managers and Model Advisors generally have higher minimum account size requirements and fees for direct accounts because of such additional expenses. How the Account Fee is Charged LPL deducts the Account Fee and other fees and charges associated with a Manager Select account from the account. LPL calculates and deducts the Account Fee in the method described in the Account Agreement, unless other arrangements are made in writing. If a client wishes to be billed for the Account Fee, rather than a deduction directly from the account, the client needs to make a request to LPL through the IAR. Payment in Advance and Refund of Pre-Paid Fees LPL deducts the Account Fee quarterly in advance. If the Account Agreement is terminated before the end of the quarterly period, LPL will pay the client a pro-rated refund of any pre-paid quarterly Account Fee based on the number of days remaining in the quarter after the termination date. However, if the account is closed within the first six months by the client or as a result of withdrawals that bring the account value below the required minimum, LPL reserves the right to retain the pre-paid quarterly Account Fee for the current quarter in order to cover the administrative costs of establishing the account (for example, the costs related to transferring positions in and out of the account, data entry in opening the account, reconciliation of positions in order to issue performance information, and re-registration of positions). After the termination date, LPL may convert the account to a brokerage account. In a brokerage account, client is charged a commission for each transaction and the Advisory Parties have no responsibility to provide ongoing investment advice. Other Types of Fees and Expenses of LPL LPL charges fees related to a Manager Select account in addition to the Account Fee, such as miscellaneous administrative or custodial-related fees and charges. LPL notifies clients of these charges at account opening and makes available a current list of these charges on its website at ▇▇▇.▇▇▇.▇▇▇. These fees include retirement account fees and termination fees, including, for example, an annual IRA ▇▇▇ maintenance fee, an annual qualified retirement plan maintenance fee, a fee for loans processed for qualified retirement plan and 403(b)(7) plan accounts and an account termination fee for processing a full account transfer to another financial institution. These miscellaneous fees are not directly based on the costs of the transaction or service by LPL, can include a profit to LPL, and certain of the fees may be lowered or waived for certain clients. As described below under “Additional Information - Participation in Client Transactions,” if LPL as broker-dealer executes a principal transaction in a Manager Select account, LPL earns a markup or markdown in addition to the Account Fee. Fees Charged by Third Parties There are other fees and charges that are imposed by third parties other than LPL that apply to investments in SMA Platform and MP Platform accounts. As described below under “Additional Information – Brokerage Practices,” if a SMA Portfolio Manager chooses to execute a transaction through a broker-dealer other than LPL, the execution price to the client may include a commission, markup/markdown, or other fee imposed by the executing broker-dealer in addition to the Account Fee. If client holds an American Depositary Receipt (“ADR”) in an account, there can be custodial fees or taxes related to the ADR. If a client’s assets are invested in mutual funds, ETFs or other pooled investment products, clients should be aware that there will be two layers of advisory fees and expenses for those assets. Client will pay an advisory fee to the fund manager and other expenses as a shareholder of the fund. Client will also pay the Account Fee with respect to those assets. Clients generally can purchase mutual funds directly. Therefore, clients could avoid the second layer of fees by not using the advisory services of provided in the Platforms and by making their own decisions regarding the investment. Clients should understand that the share class offered for a particular mutual fund through the Platforms in many cases will not be the least expensive share class that the mutual fund makes available. Other financial services firm may offer the same mutual fund at a lower overall cost to the investor than is available through the Platforms. The sweep money market fund used in the program may be managed by the same SMA Portfolio Manager that client has appointed to manage its account or be invested in a Model Portfolio provided by the same Model Advisor. If that is the case, clients should understand that the SMA Portfolio Manager or Model Advisor and its affiliates earn fees from the sweep money market fund for managing and performing other services for the fund which will be in addition to Account Fee charged to client. Important Things to Consider About Fees on an Account • The Account Fee is an ongoing wrap fee for investment advisory services, the execution of transactions and other administrative and custodial services. The Account Fee may cost the client more than purchasing the program services separately, for example, paying fees for the advisory services of LPL, IAR and, exclusively in the case of SMA Platform accounts, the SMA Portfolio Manager, plus commissions for each transaction in the account. Factors that bear upon the cost of the account in relation to the cost of the same services purchased separately include the: • type and size of the account • historical and or expected size or number of trades for the account, and • number and range of supplementary advisory and client-related services provided to the client. • It is important to note that a client may or may not be able to purchase advisory services directly from the SMA Portfolio Managers or Model Advisors, as they often do not offer such services for client accounts of the size typically associated with wrap programs. If they do offer such services to accounts the size of a program account, they often charge a higher fee as they do not enjoy the economies of scale related to providing services to clients of a wrap program. • The Account Fee may be higher than the fees charged by other investment advisors for similar services. This is the case in particular if the Account Fee is at or near the maximum Account Fee set out above. The IAR is responsible for determining the Account Fee to charge each client based on factors such as total amount of assets involved in the relationship, type of securities to be held in the account (e.g., mutual funds vs. individual securities), the complexity and mix of the portfolio, the fees associated with the SMA Portfolio Manager or Model Advisor, and the number and range of supplementary advisory and client-related services to be provided to the account. Clients should consider the level and complexity of the advisory services to be provided when negotiating the Account Fee with IAR. • Clients should consider the impact of fees and expenses on their investment portfolio, as described in the informational brochure titled “How Fees and Expenses Affect Your Portfolio” on the ▇▇▇.▇▇▇ Investor Regulatory Resources page.