Affiliated Financial Advisors Inc

Item 5: Fees and Compensation
Method of Compensation and Fee Schedule
 ASSET MANAGEMENT
 AFA offers discretionary direct asset management services to advisory Clients. AFA charges
 an annual investment advisory fee based on the total assets under management. AFA’s
 standard fee for Investment Supervisory Services is an annual fee, payable quarterly in
 arrears, of 1/2 of 1% to 1% (0.50%-1.0%) of the value of assets maintained in the account
 subject to AFA’s supervision.

   This is a flat fee, the entire portfolio is charged the same asset management fee. For
   example, a Client with $750,000 under management would pay a maximum of $7,500 on
   an annual basis. $750,000 x 1.0% = $7,500.
 The annual fee is negotiable based upon certain criteria (e.g., historical relationship, type of
 assets, anticipated future earning capacity, anticipated future additional assets, dollar
 amounts of assets to be managed, related accounts, account composition, negotiations with

 Clients, etc.). Fees are billed quarterly in arrears based on the amount of assets managed at
 the close of business on the last business day of the previous quarter.
 Lower fees for comparable services may be available from other sources. Clients may
 terminate their account within five (5) business days of signing the Investment Advisory
 Agreement with no obligation and without penalty. After the initial five (5) business days,
 the agreement may be terminated by AFA with thirty (30) days written notice to Client and
 by the Client at any time with written notice to AFA. If cash and/or securities are deposited
 into or withdrawn from an existing account mid-billing period, a prorated fee will be
 charged for that portion of the account. For accounts opened or closed mid-billing period,
 fees will be prorated based on the days services are provided during the given period. All
 unpaid earned fees will be due to AFA. Client shall be given thirty (30) days prior written
 notice of any increase in fees. Any increase in fees will be acknowledged in writing by both
 parties before any increase in said fees occurs.
Client Payment of Fees
 Fees for asset management services are deducted from a designated Client account. The
 Client must consent in advance to direct debiting of their investment account.
Additional Client Fees Charged
 Custodians may charge transaction fees and other related costs on the purchases or sales of
 mutual funds, equities, bonds, options and exchange-traded funds. Mutual funds, money
 market funds and exchange-traded funds also charge internal management fees, which are
 disclosed in the fund’s prospectus. AFA does not receive any compensation from these fees.
 All of these fees are in addition to the management fee you pay to AFA. For more details on
 the brokerage practices, see Item 12 of this brochure.
Prepayment of Client Fees
 AFA does not require any prepayment of fees.
External Compensation for the Sale of Investment Related Products to Clients
 Investment Advisor Representatives of AFA receive external compensation from sales of
 investment related products such as insurance as licensed insurance agents. This
 represents a conflict of interest because it gives an incentive to recommend products based
 on the commission received. This conflict is mitigated by disclosures, procedures, and
 AFA’s fiduciary obligation to place the best interest of the Client first and Clients are not
 required to purchase any products or services. Clients have the option to purchase these
 products through another insurance agent of their choosing.

Item 7: Types of Clients
Description
 AFA generally provides investment advice to individuals, high net worth individuals, trusts,
 estates and small business entities. Client relationships vary in scope and length of service.
Account Minimums
 AFA does not require a minimum to open or maintain an account.