Boveda Asset Management Inc

Item 5. Fees and Compensation
Bóveda does not receive compensation in the form of commissions, rebates, revenue-sharing, or participation-
based arrangements. We receive no payments from any third party. We are paid only by our clients for services
we perform and all fees are disclosed to them. In addition to the management fees charged by Bóveda, clients
may incur brokerage and/or custodial fees in the form of transaction fees, asset-based pricing fees, and
regulatory fees in connection with services provided by the client’s account custodian.

Wealth Management Fees and Compensation - Bóveda will bill and collect management fees based on a
percentage of assets under management as written in the Wealth Management Advisory Agreement. Our
standard fee schedule is as follows:

                       Assets Under Management                         Annual Fee
                       $0 to $500,000                                     2.00%
                       $500,001 to $1.0 million                           1.75%
                       Next $2.0 million                                  1.50%
                       Next $2.0 million                                  1.25%
                       Above $5.0 million                                 1.20%

As an example, a client with $650,000 in investable assets would pay 2.00% on the first $500,000 and 1.75% on
the remaining $150,000 for an average fee of 1.94%. A client with $2,500,000 in investable assets would pay
2.00% on the first $500,000, 1.75% on next $500,000 and 1.50% on the remaining $1,500,001 for an average
fee of 1.65%. Bóveda will bill and collect fees quarterly and for services most recently provided in arrears. The
management fee will be the applicable percentage rate multiplied by the market value of the account on the
last trading day of the previous quarter. Fees for partial quarters at the start or termination of the advisor
management agreement will be adjusted based on the number of days the account was open during the quarter.
During the term of an advisor management agreement, quarterly fee adjustments will be made for additions or
withdrawals based on the number of days the assets were held in the account.

Bóveda Asset Management, Inc. ®                                                                                     4
Form ADV Part 2A

For purposes of determining market value, securities and other instruments traded on an exchange for which
actual transaction prices are publicly reported will be valued at the last reported sale price on the principal
exchange in which they are traded. If a price is not available, assets will be priced using a pricing service or
through quotations from one or more dealers. We may modify these terms with at least 30 days prior written
notice.

In some cases, depending upon the complexity and time demands of client issues, an hourly fee may be charged
in addition to the fees associated with Wealth and Asset Management services. Some examples where an
additional hourly fee would be charged could include, but is not limited to: work involving the settlement of a
decedent estate and working with the executor and custodians, business transition or strategic planning, or
other extraordinary life events. These would be billed at the rate of our Consulting services and billed under a
separate agreement. Prior to engaging in a complex project, Bóveda will provide the client with a cost estimate
for the additional services.

Alternative Investment Management Fees – Fees associated with the alternative investment vehicle private
funds may be found in the respective fund offering memorandum or prospectus.

Consulting Services - Bóveda charges $75.00 to $300.00 per hour depending upon staff expertise, for planning
and consulting services which are reflected in the Consulting Services Agreement. Consulting Services
Agreements remain in effect until notified of changes by the client and are charged the current hourly rates at
that time. An estimate of fees for the project is presented to the client before any work is commenced. These
projects are billed based upon the estimated number of hours to complete the analysis, to write a customized
report addressing the client’s specific questions or issues and all meetings with the client to explain our findings
and recommendations. A deposit of 35% - 50% of the estimated fee may be required when the Client signs a
Consulting Services Agreement. There is no minimum net worth or portfolio size for consulting services.

Contract Termination - Contract termination may be initiated at any time by either the Client or Bóveda by
providing written notice to the other party. Client is responsible for any prorated, unpaid management fee or
unbilled financial planning fees incurred until the date of notification.

Frequency and Method of Payment - Bóveda will bill its fees on a calendar quarter and for services most recently
provided in arrears. Wealth Management clients generally authorize Bóveda to debit fees directly from their
accounts. Consulting Service clients may be billed monthly or upon project completion and they must pay for
their services by credit card, debit card, personal or company check. With the exception of Consulting Services
projects, Bóveda does not accept advance payment for services.

Fee Deduction - Bóveda will submit fees to the custodian holding a client’s investments, requesting fee
deduction directly from the client’s account. Payment of fees may result in a partial liquidation of client’s
securities if there is insufficient cash in the account. The custodian is not responsible for verifying the accuracy
of the fee calculation. You may wish to independently verify the fee calculation. Copies of the fee statements
will be delivered to client as required or as stated in the Wealth Management Agreement. For additional
discussion, please refer to Item 15, Custody of Assets.
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Item 7. Types of Clients
Bóveda generally provides services to high net worth individuals, private trusts and estates. Many of our clients
are highly skilled professionals including, specialty physicians, engineers, attorneys, business owners and
executives. Our minimum account size for Wealth Management services is typically $300,000 ($3,750 per year
in fees) for new clients. For consulting clients, there is no required portfolio size; however, the minimum fee is
$1,000 per year.

Risk of Loss - Past performance is no guarantee of future performance. Investing in securities involves risk of
loss that clients should be prepared to bear. Bóveda will use its best judgment and good faith efforts in rendering
services to the client. We do not guarantee any particular level of account performance or that the account will
be profitable over time. Client assumes all risk involved in the investment of account assets under the Advisory
/ Wealth Management Agreement and understands that investment decisions made for an account are subject
to multiple risk factors such as market, inflation, interest rate, reinvestment, liquidity, currency, systematic,
political, and business risks. Except as provided by law, we will not be liable to client for:
       • Any loss that client may suffer due to investment decisions made, other action taken, or
            actions omitted. Bóveda will provide services in good faith with the care, skill and diligence
            that a prudent person acting in a fiduciary capacity would use;
       • any loss arising from our adherence to client’s instructions;
       • Any act or failure to act by a qualified custodian of client’s account.
       • Nothing in this disclosure or our Advisory / Wealth Management Agreement shall relieve us
            from any responsibility or liability we may have under state or federal statutes.
       • There are many risks to consider carefully before committing to investment in the market
            place.
We are not able to define every risk involved with investing within this document. Below is a representative
sample of risks that should be considered:

      •   Market Risk: The day-to-day potential for an investor to experience losses from fluctuations
          in securities prices.
      •   Inflation Risk: The risk that asset appreciation does not keep pace with the cost of everyday
          living.
      •   Reinvestment Risk: Where maturing fixed rate securities are unable to secure the same
          coupon or interest rate as previously owned.
      •   Liquidity Risk: The risk that an issue may be thinly traded and therefore cannot be exited in
          a timely or price advantageous manner.
      •   Interest Rate Risk: The risk of an investment’s value will change due to a change in the
          absolute level of interest rates, in the spread between two rates, or in the shape of the yield
          curve.

Bóveda Asset Management, Inc. ®                                                                               6
Form ADV Part 2A

      •   Currency Risk: A form of risk that arises from the change in price of one currency against
          another.
      •   Systematic Risk: Changes in interest rates, recessions and wars represent examples of
          systematic risk, because they affect the entire financial market and cannot be avoided
          through diversification.
      •   Political Risk: The risk that an investment’s returns could suffer as a result of political
          changes or instability in a country.
      •   Business Risk: The risk that a company will not have adequate resources to meet its
          operating expenses.

Method of Analysis - Investment analysis is performed by the Bóveda Investment Committee. Chaired by Ken
Witherspoon, CFP®, the Committee meets regularly to review the investments recommended for client
portfolios. We adhere to the principles of diversification and the use of tactical asset allocation. The Committee
examines many different factors in determining the funds within an asset category including expenses,
management tenure, peer standing, performance and volatility to name a few.

Initial category screens reduce the fund universe down to a select few that are then analyzed specifically for
their strengths and weaknesses. Credit quality, market capitalization and sector weighting, yields and portfolio
turnover are just a few of the criteria the Committee evaluates. We also communicate with the fund companies
or fund managers directly to determine that their philosophies and strategies are consistent with the
Committee’s criteria.

Once fund selection is complete, the Committee examines historic asset category risk and return data to then
determine allocation for a particular client risk portfolio. We consider new asset categories that will reasonably
meet the Committee’s future economic assumptions. The Investment Committee reviews investments during
the year and reserves the right to change investments at any time.

Investment Strategies - Bóveda uses a tactical, proactive asset allocation strategy. We construct portfolios based
upon client risk tolerance, tax sensitivity, fees and socially responsible guidelines. Our strategies vary based
upon client investment experience, cash flow needs and time horizons among other factors. We believe in
diversification, asset allocation, and a long-term approach to investing. Our investment strategy blends both
passive and active management styles. Portfolios are broadly diversified across sub-asset categories including
short and intermediate term U.S. and international bonds, high yield bonds, U.S., International and Emerging
Market equities, Real Estate Investment Trusts (REITS) and other less correlated asset classes like commodities
and currencies, to name a few. A great deal of the investments are no-load mutual funds and exchange traded
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