Item 5 – Fees and Compensation

The annual fee for investment management services will be charged as a percentage of assets under management, according to the schedule below.

Account Value                    Annual Fee

On the first $500,000   0.90 percent
On the next $500,000   075 percent
On the next $1 million   0.60 percent
On the next $1 million   0.45 percent
On the next $2 million   0.30 percent
On the next $4 Million  0.25 percent
On all amounts thereafter  0.20 percent

 

All accounts for members of the client’s family (husband, wife and dependent children) or related business entities may be assessed fees based upon the total balance of all accounts.

In certain circumstances, all fees, account minimums and their applications to affiliated persons and family circumstances may be negotiable. Fees may also be reduced if a client receives portions of services from another investment advisor normally performed by FIA.

Clients will be invoiced in advance at the beginning of each calendar quarter based upon the value (market value or fair market value in the absence of market value), of the client’s account at the end of the previous quarter. Management fees shall not be prorated for each capital contribution and withdrawal made during the applicable calendar quarter. New accounts are charged a prorated fee for the remainder of the quarter in which the account is incepted (date of first trade). The specific manner in which fees are charged by FIA is established in a client’s written investment advisory agreement with FIA.

FIA will request authority from the client to receive quarterly payments directly from the client’s account held by an independent custodian. Clients may provide written limited authorization to FIA to withdraw fees from the account. FIA will send client an invoice showing the amount of the fee, the value of the client’s assets on which the fee is based, and the specific manner in which the fee was calculated. Clients should verify the accuracy of the fee calculations in such invoices.

All fees are calculated as described above and are not charged on the basis of a share of capital gains upon or capital appreciation of the funds or any portion of the funds of an advisory client.

A client agreement may be canceled at any time, by either party, for any reason upon receipt of 30 days written notice. Upon termination of any account, any prepaid, unearned fees will be promptly refunded. The client has the right to terminate an agreement without penalty within five business days after entering into the agreement.

The fee schedule above may be amended from time to time by FIA upon at least forty-five (45) days written notice to Client, subject to Client’s right to terminate the agreement before an increased fee schedule takes effect upon at least thirty (30) days written notice to Advisor.

All fees paid to FIA for investment advisory services are separate and distinct from fees and expenses charged by mutual funds to their shareholders. These fees and expenses are described in each fund’s prospectus. These fees will generally include a management fee, other fund expenses, and a possible distribution fee. A client could invest in mutual funds directly, without the services of FIA. In that case, the client would not receive the services provided by FIA which are designed, among other things, to assist the client in determining which mutual fund or funds are most appropriate to each client’s financial condition and objectives. DFA funds also may not be available to the client directly. Accordingly, the client should review both the fees charged by the funds and the fees charged by FIA to fully understand the total amount of fees to be paid by the client and to thereby evaluate the advisory services provided.

FIA’s fees are exclusive of brokerage commissions, transaction fees, and other related costs and expenses which shall be incurred by the client. Clients may incur certain charges imposed by custodians, brokers, third party investment and other third parties such as fees charged by managers, custodial fees, deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions. Mutual funds and exchange traded funds also charge internal management fees, which are disclosed in a fund’s prospectus. Such charges, fees and commissions are exclusive of and in addition to FIA’s fee, and FIA shall not receive any portion of these commissions, fees, and costs.

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