Benedict Financial Advisors Inc

Item 5 ‐ Fees and Compensation

General Fee Information
Clients enter into one of two fee arrangements. Generally, clients elect to pay management fees to
BFA separately from the transaction charges of the account. Accordingly, client accounts pay a
management fee to BFA, plus transaction charges to the custodian and executing broker/dealer, LPL
Financial (“LPL”). The transaction charges vary based on the type of transaction (e.g., equity, fixed
income security, mutual fund, exchange traded funds, etc.). BFA does not receive any portion of the
transaction charges paid to LPL.

Alternatively, certain eligible clients may engage in the Benedict Wrap Program. The Wrap Program
fee structure includes the transaction charges of the account as well as the management fee paid to
BFA. Under this inclusive billing alternative, BFA will assess one client fee that captures the
management fee and transaction charges collectively. Although clients do not pay transaction charges
in Wrap Program accounts, clients should be aware that BFA pays LPL for transaction charges in
client accounts. This creates a conflict of interest and financial incentive for BFA to avoid transactions
in client accounts, or to place such trades less frequently. Clients should also understand that the
amount of the transaction charges paid by BFA is a factor that BFA considers when deciding which
securities to select, how frequently to place transactions, and the level of management fee to charge
clients.

In either of these arrangements, the fees noted above are separate and distinct from the internal fees
and expenses charged by mutual funds, Exchange Traded Funds (ETFs), or other investment pools to
their shareholders (generally including a management fee and fund expenses, as described in each
fund’s prospectus or offering materials).

In addition, LPL also charges to the client additional miscellaneous fees and charges including, but
not limited to, account transfer fees, retirement account maintenance fees, wire transfer fees,
alternative investment processing fees, and other fees and charges required by law. LPL also receives
other compensation (direct or indirect) from other third parties in connection with client holdings
or transactions. BFA does not receive any portion of these fees or expenses. The client is encouraged
to carefully review all fees charged by funds, brokers, BFA and others to fully understand the total
amount of fees paid by the client for investment and financial-related services.

Please see Item 12 ‐ Brokerage Practices for additional information.

Management Fees
The annual fee schedule, based on a percentage of assets under management, is as follows:

                Account balance up to $750,000                         1.49%
                Account balance of $750,000 to $1,250,000              1.29%
                Account balance of $1,250,000 to $2,000,000            1.19%
                Account balance of $2,000,000 to $3,000,000            1.14%
                Account balance of $3,000,000 to $5,000,000            1.09%
                Account balance over $5,000,000                        0.95%

The minimum portfolio value is generally set at $300,000. The fee schedule is set based on the initial
value of the account, and is generally not adjusted for changes in asset levels. BFA may, at its
discretion, make exceptions to the foregoing or negotiate special fee arrangements where BFA deems
it appropriate under the circumstances. Portfolio management fees are generally payable quarterly,
in advance. Fees are prorated for cash flows during each quarter. If management begins after the start
of a quarter, fees will be prorated accordingly. With client authorization and unless other
arrangements are made, fees are normally debited directly from client account(s).

Either BFA or the client may terminate their advisory client agreement at any time, subject to any
written notice requirements in the agreement. In the event of termination, any paid but unearned
fees, based on the number of days that the account was managed, will be promptly refunded to the
client, and any fees due to BFA from the client will be invoiced or deducted from the client’s account
prior to termination.

Please see Item 12 ‐ Brokerage Practices for additional information.

Wrap Program Fees
As described above, clients may participate in BFA’s Wrap Program. Clients participating in the Wrap
Program will pay the management fees listed above, but do not separately pay transaction charges in
the account(s) managed by BFA, and BFA pays the transaction charges imposed by the custodian on
behalf of the client. Generally, BFA requires that clients have portfolios valued at $1.25 million or
more to be eligible for the Wrap Program although exceptions can be made at the discretion of BFA.

Financial Planning Fees
To the extent BFA provides stand-alone financial planning services, fees are negotiated with each
client and vary depending upon the complexity of the client’s financial circumstances.

General Consulting Fees
When BFA provides general consulting services to clients, these services are generally separate from
BFA’s financial planning services. Fees for general consulting are negotiated at the time of the
engagement for such services.

Rollovers
There is a conflict of interest for individuals that currently invest in an employer- sponsored
retirement plan or individual retirement account that are considering a roll out of assets from the
retirement plan or account. A conflict of interest exists because BFA will be compensated only if the
individual rolls over the proceeds into an IRA that is then managed by BFA. As a result, it can be
construed that BFA has a financial incentive to recommend one option over another. Therefore, the
individual should include in his/her decision making process, a thorough review of all options
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Item 7 ‐ Types of Clients

BFA serves individuals, pension and profit-sharing plans, corporations, trusts, estates and charitable
organizations. With some exceptions, the minimum portfolio value eligible for portfolio management
services is $300,000. BFA typically requires a minimum portfolio value of $1.25 million to participate
in its Wrap Program. Under certain circumstances and in its sole discretion, BFA may negotiate such
minimums.