American Financial & Tax Strategies Inc

Item 5. Fees and Compensation

Financial Planning and Consulting Fees
American Financial & Tax Strategies charges either a negotiable hourly and/or fixed fee to provide clients with
stand-alone financial planning or consulting services. These fees are largely determined by the scope and
complexity of the agreed upon services: $660 on an hourly basis, and $2640 and up on a fixed fee basis,
depending upon the level and scope of the services and the professional rendering the financial planning
and/or the consulting services. If the client engages American Financial & Tax Strategies for additional
investment advisory services, the firm may offset all or a portion of its fees for those services based upon the
amount paid for the financial planning and/or consulting services.

Prior to engaging American Financial & Tax Strategies to provide financial planning and/or consulting services,
the client is required to enter into a written agreement with American Financial & Tax Strategies setting forth
the terms and conditions of the engagement. Generally, American Financial & Tax Strategies requires one-half
of the financial planning and/or consulting fee payable upon entering the written agreement. The balance is
generally due upon delivery of the financial plan or completion of the agreed-upon services.

Investment Management and Wealth Management Fee
American Financial & Tax Strategies provides investment management services for an annual fee based upon
a percentage of the market value of the assets being managed by the firm. For certain clients, this fee may
include financial planning services. American Financial & Tax Strategies’ annual fee is exclusive of, and in
addition to, brokerage commissions, transaction fees, and other related costs and expenses which are incurred
by the client. American Financial & Tax Strategies does not, however, receive any portion of these commissions,
fees, and costs. The firm’s annual fee is pro-rated and charged quarterly, in arrears, based upon the average
month-end market value or the average daily market value of the assets in the preceding three (3) months.

The Custodian will deduct the Adviser’s fee from the Accounts on behalf of the Adviser at the rates illustrated
in the chart below. Fees will always be calculated on each individual account, subject to fee aggregation as
further described and illustrated below. In specified situations, the fee, although calculated on one account,
will be drawn from another account within the household. For instance, a parent may choose for the fee for a
child’s account to be drawn from his or her own account, or one spouse may choose to have the fee for the
other drawn from their own. Also, the fee for multiple IRA accounts may be drawn from just one IRA belonging
to that same individual, or the fee for a life insurance policy or annuity may be drawn from one of that owner’s
other accounts.

For all accounts covered by this agreement, the incremental fee rate is calculated on all account values
aggregated and applied proportionately to each account. Typically, AFTS aggregates all accounts of spouses,
minor children, custodial accounts, Section 529 Plans, UTMA/UGMA accounts and revocable trusts for the
benefit of a household member. In some instances, different members of a household may keep their assets
and reporting separate, and will execute separate Investment Management agreements (IMAs). Account(s)
for which there is a separate IMA will not be aggregated with accounts covered by another IMA for purposes
of calculating the advisory fee. For example, if a client signs an IMA for one account and his/her spouse signs
a separate IMA for his/her own account, AFTS will treat these two accounts as two separate accounts when
calculating its advisory fees. The two accounts will not be aggregated together to receive a discounted or lower
advisory fee.

In addition, unless otherwise notified, AFTS will not aggregate the following accounts for purposes of
calculating an advisory fee: (i) irrevocable trusts and other situations in which assets are given away (whether
to other individuals or institutions); and (ii) accounts belonging to minor children when they reach the age of
majority, at which point such persons may enter into a new and separate IMA with respect to their own
accounts. If they choose not to enter into their own agreement, they will no longer be clients of AFTS and there
will be no further fees withdrawn.

Sample Computation: The “Assets Under Management” value is calculated as the average of the value of all
accounts covered by this agreement on the last day of each of the three months in the billing quarter. If that
value is $2,000,000, the fee would be $4,500. It would be calculated as the sum of $1,000,000*0.25% ($2,500)
and $1,000,000*0.20% ($2,000). The minimum quarterly fee is $2,500.

Illustration of fee aggregation: If this agreement covers three accounts worth, respectively, $1,500,000,
$1,000,000 and $500,000, the total is $3,000,000. As illustrated above, the first million dollars is subject to a
quarterly rate of 0.25%, the next million to a rate of 0.2%, and the third million to a rate of 0.125%. The blended
rate is therefore 0.191667%, and that rate is applied to each account individually, so that each account gets an
equal benefit of the discount. Client acknowledges that, due to software limitations beyond AFTS’s control,
values of less than a dollar may be rounded up or down to the nearest dollar.

The fee for accounts terminated mid-billing cycle will be based on the prior quarter’s average balance and pro-
rated for the number of days elapsed prior to written notice of termination. For instance, in the above
$2,000,000 example, if 57 days had elapsed prior to written notice, the fee would be $2,788, $2819 or $2850
(depending on whether that quarter had 90, 91 or 92 days in it). The minimum quarterly fee of $2,500 will be
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Item 7. Types of Clients
American Financial & Tax Strategies generally provides its services to individuals. However, the firm also may
provide advice to pension and profit-sharing plans, trusts, estates, charitable organizations, corporations and
business entities.

Minimums Imposed By Independent Managers
The Firm does not impose a minimum portfolio size.