Baltimore-Washington Financial Advisors Inc

Item 5 Fees and Compensation
A.    Compensation for Advisory Services. Clients are provided with written statements of all
applicable fees when they sign the BWFA Service Agreement. Fees are outlined below for Financial
Planning, Investment Management, and Tax services, and for Business Services and Employer-
Sponsored Retirement Account Services, some of which are negotiable.

    1.   BWFA Premier Service Levels

           PLATINUM - Clients with $2,500,000 or more under management receive the following
           services:

           •   Complimentary Financial Planning
           •   Complimentary Generational Planning
           •   Investment Management
           •   Complimentary Premium Tax Services (annual value not to exceed $2,000)
           •   Complimentary Lifetime Reviews
           •   Estate Planning

           GOLD - Clients with $1,000,000 to $2,499,999 under management receive the following
           services:

           •   Complimentary Financial Planning
           •   Investment Management
           •   Complimentary Lifetime Reviews
           •   Tax Services (preferential rates apply)

           SILVER - Clients with $500,000 to $999,999 under management receive the following
           services:

           •   Discounted Financial Planning ($4,500)
           •   Investment Management
           •   Complimentary Lifetime Reviews
           •   Tax Services (standard rates apply)

           BASIC - Financial Planning (comprehensive financial plan and 1 annual review):

           • $6,500

    2. Financial Planning Services - Fees for financial planning services are fixed and are based on
    the scope of the project. A client is advised of the fee prior to the time that work begins.

                        Plan Type                              Fee
                        Retirement Plan                        $6,500
                        Financial Plan Reviews                 $ 1,000
                        Financial Planning Projects            Variable

Adjustments to fees:
    • A 10% discount is provided to APL Federal Credit Union members for a Retirement Plan..

     3.    Investment Management Services

          a.   Portfolio Management - The annual fee for portfolio management services is a
          percentage of the market value of assets under management on the last day of each calendar
          quarter. Annual investment management fees are as follows:

               1.25% on the first $500,000 of assets under management
               1.00% on assets under management between $500,001 and $2,000,000
               0.85% on assets under management between $2,000,001 and $5,000,000
               0.75% on assets under management between $5,000,001 and $10,000,000
               0.65% on assets under management in excess of $10,000,001

     4.    Tax Services - BWFA offers three different types of tax services. Fees for these services as
     follows:

          a.     Tax Preparation - Fees are charged based on the number and type of forms, schedules,
          and worksheets required to complete a tax return. All new tax clients are provided a fee
          quotation based on their prior year's tax return. In some instances, additional hourly charges
          may apply for complex returns. BWFA electronically files client returns at no additional
          charge.
          b.     Premium Estimated Tax Service - BWFA may charge an additional fee to compute and
          facilitate payment of estimated taxes to the appropriate federal and state taxing authorities.
          c.     Tax Planning and other Tax Advisory Services - Fees may be charged according to the
          scope and complexity of the project. A client is advised of the fee prior to the time that work
          begins.

     5.    Business Services - Fees for BWFA's business services vary based on the type and size of
     the business and the complexity of the service to be performed. The fee for successfully buying or
     selling a business is calculated as a percentage of the purchase/sale price of the business. Fees
     for certain business services are negotiable.

     6.    Employer-Sponsored Retirement Plan Services -The annual fee for employer- sponsored
     retirement plan services for small- and mid-sized companies is a percentage of the average daily
     market value of assets held in plan retirement accounts during each calendar quarter. Annual fees
     are negotiable and typically range from 25 to 75 basis points (.25% to .75%) depending on the
     level of assets in the plan, the number of plan participants, and the type of financial planning
     services provided to plan participants.

B.    Payment Method and Frequency of Fees.

     1.    Financial Planning clients are billed as follows:

          a.     Retirement Plan clients sign a service agreement that includes preparation and
          presentation of a comprehensive financial plan and access to a financial planning advisor. In
          addition, Retirement Plan clients are entitled to one Financial Plan update. Retirement Plan
          client fees are paid in full at the time of signing the agreement, where applicable.

          b.   Clients are billed for Financial Planning Projects at the time of signing the agreement.

     2.   Investment Management fees are charged in arrears (apply to the previous quarter). New
     BWFA clients established during the quarter are charged a prorated management fee for the first
     quarter, based on the number of days the account was opened and which BWFA provided

    investment management services. Accounts closed during the quarter are charged a prorated
    management fee for that quarter, based on the number of days the account was open. In some
    cases, BWFA will charge the management fee incurred on one of a client's accounts to another of
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Item 7 Types of Clients
BWFA clients include individuals, families, trusts, estates, foundations, and religious, charitable, and
other non-profit organizations.