Common use of Custom Services Clause in Contracts

Custom Services. Wilshire will provide specified services for special projects upon request. In such cases, Wilshire provides the prospective client a proposal letter that outlines the scope of the project and the applicable fee. Generally, such projects are of short duration and fees are payable as agreed upon with the client. FEE BILLING Fees are generally billed monthly or quarterly. Payment in full is expected upon receipt of the invoice. For advisory clients, fees may be paid out of the client’s investment account by the client’s custodian. A client must consent in advance to direct debiting of its investment account. When we collect fees in this manner, at the same time we ▇▇▇▇ the custodian, we will send the client an invoice showing the amount of the fees, the value of the assets on which they are based, and the fee computation. Upon termination, fees will be billed or refunded, as appropriate, on a pro rata basis for the portion of the quarter completed. The portfolio value at the beginning of the period is used as the basis for the fee computation, adjusted for the number of days during the billing quarter prior to termination. OTHER FEES Client accounts may incur other fees not associated with Wilshire (e.g., administrative, custodian and/or transaction fees). Client accounts also incur brokerage commissions, which are discussed in the “Brokerage Practices” section of this brochure. Expenses other than advisory and performance fees and brokerage commissions, such as custody fees, are generally paid directly by a client to the service provider. Funds are generally subject to operating expenses, including advisory fees paid to the investment managers and sub- advisors of the funds. If Wilshire invests a client’s assets in a fund (proprietary or nonproprietary), the client will bear a proportionate share of the operating expenses of the fund; in addition to the fees it pays Wilshire. If Wilshire invests a discretionary client’s assets in a fund managed by Wilshire, Wilshire may waive its advisory fee with respect to those assets; however in such instances, Wilshire, as the investment adviser to the fund, will receive a management fee directly from the fund. Where an advisor engages Wilshire to provide index calculation services with respect to an index that the fund tracks or uses as a benchmark, Wilshire’s fees for its index services are paid out of the assets of the fund as a fund expense. PERFORMANCE BASED FEES Wilshire may charge a performance fee for certain services to its clients qualified to participate in performance fee arrangements under the Investment Advisers Act. These fees are generally charged on a percentage of the profits earned from investments, at times only after a minimum return has been achieved. The pertinent fee agreement provides details about how these fees are charged. The use of performance-based fees may result in conflicts of interest. Advisors may devote more time to developing and analyzing investment strategies or allocate opportunities preferentially to accounts for which it could share in investment gains. Wilshire professionals allocate client assets according to our policies. Therefore, accounts with performance-based fees are not granted preferential allocations and no client, regardless of fee model, is favored over another. Methods of Analysis, Investment Strategies and Risk of Loss Since 1972, Wilshire has pioneered analytical-driven investment consulting and asset management solutions to manage risk. Wilshire was an early innovator of integrated asset/liability modeling, as well as risk management and portfolio optimization models to help plan sponsors and institutional investors arrive at optimal portfolios based on their specific needs. Industry research and our experience lead us to believe that the asset allocation decision has the greatest impact on a portfolio's long-term return and risk profile. Wilshire embraced this important concept over 40 years ago when the firm introduced its integrated asset/liability modeling technique to the industry. The investment strategy for a specific client is based upon the objectives stated by the client during consultations and as mutually agreed through an investment policy statement. Wilshire has 40 years of experience in assisting clients to develop investment policies, procedures and guidelines. Investment policy and guidelines are integral to all aspects of Wilshire's investment advisory services. For those clients for which Wilshire has investment discretion, Wilshire primarily selects asset managers as sub-advisors to whom Wilshire delegates day-to-day portfolio management, invests in other investment funds, which it monitors and oversees and invests directly in securities or derivatives. These investment managers or funds execute various types of investment strategies. Wilshire’s selection and monitoring of investment managers is based on various criteria, including, without limitation, investment performance, risk management, investment philosophy, organizational structure, experience and commitment. Wilshire also engages in quantitative, rules-based investment analytics, which are used in a variety of applications including monitoring broker-dealers’ investment platforms and selecting securities for investment portfolios. All investment programs have certain risks that are borne by the investor. Wilshire’s investment approach seeks to mitigate risk and ensure clients are compensated for the risk they take. The risk for each client varies in accordance with their policies, procedures, goals, guidelines and stated risk tolerance. In addition, all of Wilshire’s clients will encounter risks, including, but not limited to: