Investment Management

RS Crum Inc. requires clients to open one or more custodian accounts in their own name at a qualified custodian of the client’s choice. We encourage the use of a discount type broker and often recommend that clients custody assets through Charles Schwab & Co., Inc. (“Schwab”). A client is not under any

obligation to effect trades through any recommended broker or custody their assets with any broker-dealer we recommend. All clients are free to select any broker-dealer of his or her choice. The client will enter

into a separate agreement with the broker-dealer/custodian to custody the assets. For clients that we provide investment management services to we require that clients grant us limited power of attorney to execute client transactions. RS Crum Inc. is independently owned and operated, and unaffiliated with any broker-dealer/custodian.

How We Select Brokers/Custodians

We seek to recommend a custodian/broker who will hold your assets and execute transactions on terms that are, overall, most advantageous when compared to other available providers and their services. This does not require us to solicit competitive bids and does not have an obligation to seek the lowest available commission price. We consider a wide range of factors, including, among others:

• Combination of transaction execution services and asset custody services (generally without a separate fee for custody)
• Capability to execute, clear, and settle trades (buy and sell securities for your account)
• Capability to facilitate transfers and payments to and from accounts (wire transfers, check requests, bill payment, etc.)
• Breadth of available investment products (stocks, bonds, mutual funds, exchange-traded funds [ETFs], etc.)
• Availability of investment research and tools that assist us in making investment decisions
• Quality of services
• Competitiveness of the price of those services (commission rates and other fees) and willingness to negotiate the prices
• Reputation, financial strength, and stability
• Prior service to us and our other clients
• Availability of other products and services that benefit us, as discussed below (see Products and Services Available to Us From Schwab)

Your Brokerage and Custody Costs

For our clients’ accounts that Schwab maintains, Schwab generally does not charge you separately for custody services. However, Schwab receives compensation by charging you commissions or other fees on trades that it executes or that settle into your Schwab account. This commitment benefits you because the overall commission rates you pay are lower than they would be otherwise. We have determined that having Schwab execute most trades is consistent with our duty to seek “best execution” of your trades.

Best execution means the most favorable terms for a transaction based on relevant factors, including those listed above (see How We Select Brokers/Custodians).

Products and Services Available to Us from Schwab

Schwab Advisor Services™ (formerly called Schwab Institutional^®) is Schwab’s business serving independent investment advisory firms like us. They provide RS Crum Inc. and our clients with access to

its institutional brokerage, trading, custody, reporting, and related services, many of which are not typically available to Schwab retail customers. Schwab also makes available various support services. Some of those services help us manage or administer our clients’ accounts; others help us manage and grow our business. Schwab’s support services generally are available on an unsolicited basis (we don’t have to request them) and at no charge to us as long as our clients collectively maintain a total of at least

$10 million of their assets in accounts at Schwab. If our clients collectively have less than $10 million in assets at Schwab, Schwab may charge us quarterly service fees of $1,200.

Following is a more detailed description of Schwab’s support services:

Services That Benefit You

Schwab’s institutional brokerage services include access to a broad range of investment products, execution of securities transactions, and custody of client assets. The investment products available through Schwab include some to which we might not otherwise have access or that would require a significantly higher minimum initial investment by our clients. Schwab’s services described in this paragraph generally benefit you and your account.

Services That May Not Directly Benefit You

Schwab also makes available to us other products and services that benefit us but may not directly benefit you or your account. These products and services assist us in managing and administering our clients’

accounts. They include investment research, both Schwab’s own and that of third parties. We may use this research to service all or a substantial number of our clients’ accounts, including accounts not maintained at Schwab. In addition to investment research, Schwab also makes available software and other technology that:

• Provide access to client account data (such as duplicate trade confirmations and account statements)
• Facilitate trade execution and allocate aggregated trade orders for multiple client accounts
• Provide pricing and other market data
• Facilitate payment of our fees from our clients’ accounts
• Assist with back-office functions, recordkeeping, and client reporting

Services That Generally Benefit Only Us

Schwab also offers other services intended to help us manage and further develop our business enterprise. These services include:

• Educational conferences and events (which may include Schwab paying for related travel expenses, entertainment and meals associated with attending)
• Consulting on technology, compliance, legal, and business needs
• Publications and conferences on practice management and business succession
• Access to employee benefits providers, human capital consultants, and insurance providers

Schwab may provide some of these services itself. In other cases, it will arrange for third-party vendors to provide the services to us. Schwab may also discount or waive its fees for some of these services or pay

all or a part of a third party’s fees. Schwab may also provide us with other benefits, such as occasional business entertainment of our personnel.

Our Interest in Schwab’s Services

The availability of these services from Schwab benefits us because we do not have to produce or purchase them. We do not have to pay for Schwab’s services so long as our clients collectively keep a total of at least $10 million of their assets in accounts at Schwab. Beyond that, these services are not contingent upon us committing any specific amount of business to Schwab in trading commissions. The $10 million minimum may give us an incentive to recommend that you maintain your account with Schwab, based on our interest in receiving Schwab’s services that benefit our business rather than based on your interest in receiving the best value in custody services and the most favorable execution of your transactions. This is a potential conflict of interest. We believe, however, that our selection of Schwab as custodian and broker is in the best interests of our clients.

We primarily support our selection of Schwab by the scope, quality, and price of Schwab’s services (see How We Select Brokers/Custodians, above) and not Schwab’s services that benefit only us.

Directed Brokerage Transactions

We are prepared to work with any broker-dealer that the client chooses, and the client may direct the RS Crum Inc. to use a particular broker-dealer to execute some or all transactions for the client. In that case, the client will negotiate terms and arrangements for the account with that broker-dealer, and RS Crum Inc. will not seek better execution services or prices from other broker-dealers or be able to “batch” client transactions for execution through other broker-dealers with orders for other accounts managed by RS Crum Inc. As a result, the client may pay higher commissions or other transaction costs or greater spreads, or receive less favorable net prices, on transactions for the account than would otherwise be the case. Subject to RS Crum Inc.’s duty of best execution, the Firm may decline a client’s request to direct brokerage if, in the Firm’s sole discretion, such directed brokerage arrangements would result in additional operational difficulties.

Aggregation and Allocation of Transactions

RS Crum Inc. sometimes aggregates transactions in like securities among client accounts as well as with accounts of RS Crum Inc. and our personnel. Aggregation presents a conflict of interest as we may have an incentive to allocate more favorable executions to our own accounts or the accounts of our personnel. Our policies to address this conflict are as follows:

• We will disclose our aggregation policies in this brochure;
• We will not aggregate transactions unless we believe that aggregation is consistent with our duty to seek best execution (which includes the duty to seek best price) for our clients. The trade also needs to be consistent with the terms of our investment advisory agreement with each client that has an account included in the aggregation;
• We will not favor any account over any other This includes accounts of RS Crum Inc. or any of our personnel. Each account in the aggregated order will participate at the average share price for all of our transactions in a given security on a given business day (per custodian). All accounts will pay their individual transaction costs;
• Before entering an aggregated order, we will prepare a written statement (the “Allocation Statement”) specifying the participating accounts and how we intend to allocate the order among those accounts;
• If the aggregated order is filled entirely, we will allocate shares among clients according to the Allocation Statement; if the order is partially filled, we will generally allocate it pro-rata according to the Allocation Statement. However, we may allocate the order differently than specified in the Allocation Statement if all client accounts receive fair and equitable Examples include but are not limited to:
  • When only a small percentage of the order is executed, with respect to purchase allocations, allocations may be given to accounts high in cash;
  • With respect to sale allocations, allocations may be given to accounts low in cash;
  • We may allocate shares to the account with the smallest order, or to the smallest position, or to an account that is out of line with respect to security or sector weightings, relative to other portfolios with similar mandates;
  • We may allocate to one account when that account has limitations in its investment guidelines prohibiting it from purchasing other securities that we expect to produce similar investment results and that can be purchased by other accounts in the block;
  • If an account reaches an investment guideline limit and cannot participate in an allocation, we may reallocate shares to other For example, this may be due to unforeseen changes in an account’s assets after an order is placed;
  In any case, we will explain the reasons for a different allocation in writing, which the CCO must approve;
• If an aggregated order is partially filled and we allocate it differently than the Allocation Statement specifies, no participating account may purchase or sell the security for a reasonable period following the execution of the block trade. This only applies when the participating account sells or receives more shares than it would have if the aggregated order been completely filled;
• Our books and records will separately reflect each aggregated order and the securities held by, bought, and sold for each client account;
• Funds and securities of clients participating in an aggregated order will be deposited with one or more qualified custodians. Clients’ cash and securities will not be held collectively any longer than is necessary to settle the trade on a delivery versus payment basis. Following settlement, cash or securities held collectively for clients will be delivered out to the qualified custodian as soon as practical;
• We do not receive additional compensation or remuneration of any kind as a result of aggregating orders; and
• We will provide individual investment advice and treatment to each client’s