Breakwater Capital Group

Item 5: Fees and Compensation

We base our fees on hourly charges, fixed fees, and a percentage of assets under management,
which are described below.

Compensation – Financial Planning
Financial Planning fees will be charged in one of two ways:

   •   As a fixed fee, typically ranging from $5,000 to $20,000, depending on the nature and
       complexity of each client’s circumstances, or
   •   On an hourly basis not to exceed $500 per hour.

All financial planning fees are due in arrears, upon presentation of the financial plan.

Compensation – Wealth Management Services
Wealth Management fees are charged an annual fee as follows:

                Total Assets Under Management                   Annual Fee
                          First $500,000                           1.50%
                       $500,000-$1,000,000                         1.25%
                      $1,000,000-$3,000,000                        1.00%
                      $3,000,000-$5,000,000                        0.75%
                     $5,000,000-$10,000,000                        0.60%
                           $10,000,000+                            0.50%

The asset-based fee will be paid monthly, in arrears, based upon the average daily market value
of the Household Assets, including cash, for the previous month, as valued by the Custodian.

Compensation – Retirement Plan Advisory Services
Our fees for Retirement Plan Advisory Services are an asset-based fee based on overall assets in
the plan or a consulting fee with the minimum fee being $5,000; consulting services are on an
hourly basis not to exceed $500 per hour.

Compensation – Consulting Services
Our fees for consulting services are on an hourly basis not to exceed $500 per hour. All
consulting fees are due in arrears, upon completion of the engagement.

Compensation – Trustee Services
Our fees for trustee services are 0.15% -0.25% in addition to the wealth management fee or
0.50% when we are not serving in the capacity of the investment advisor.

Calculation, Payment and Termination
The specific manner in which we charge fees is established in a client’s written agreement with
us. Clients may elect to be invoiced directly for fees or to authorize us to directly debit fees
from client accounts.

Either party may terminate an agreement at any time by notifying the other in writing. If the
client made an advance payment, we would refund any unearned portion of the advance
payment. If the client made a payment in arrears, we would collect any earned yet unpaid fees.

In no case will more than $1,200 be collected from the client more than 6 months in advance.

Cash Balances
Some of your assets may be held as cash and remain uninvested. Holding a portion of your
assets in cash and cash alternatives, i.e., money market fund shares, may be based on your
desire to have an allocation to cash as an asset class, to support a phased market entrance
strategy, to facilitate transaction execution, to have available funds for withdrawal needs or to
pay fees or to provide for asset protection during periods of volatile market conditions. Your
cash and cash equivalents will be subject to our investment advisory fees unless otherwise
agreed upon. You may experience negative performance on the cash portion of your portfolio if
the investment advisory fees charged are higher than the returns you receive from your cash.

Retirement Plan Rollover Recommendations
As part of our investment advisory services to our clients, we may recommend that clients roll
assets from their employer’s retirement plan, such as a 401(k), 457, or ERISA 403(b) account
(collectively, a “Plan Account”), to an individual retirement account, such as a SIMPLE IRA, SEP
IRA, Traditional IRA, or Roth IRA (collectively, an “IRA Account”) that we will advise on the
client’s behalf. We may also recommend rollovers from IRA Accounts to Plan Accounts, from
Plan Accounts to Plan Accounts, and from IRA Accounts to IRA Accounts.

If the client elects to roll the assets to an IRA that is subject to our advisement, we will charge
the client an asset-based fee as set forth in the advisory agreement the client executed with our
firm. This creates a conflict of interest because it creates a financial incentive for our firm to
recommend the rollover to the client (i.e., receipt of additional fee-based compensation).
Clients are under no obligation, contractually or otherwise, to complete the rollover. Moreover,
if clients do complete the rollover, clients are under no obligation to have the assets in an IRA
advised on by our firm. Due to the foregoing conflict of interest, when we make rollover
recommendations, we operate under a special rule that requires us to act in our clients’ best
interests and not put our interests ahead of our clients’.

Under this special rule’s provisions, we must:

   •   meet a professional standard of care when making investment recommendations (give
       prudent advice);

   •    never put our financial interests ahead of our clients’ when making recommendations
        (give loyal advice);
   •    avoid misleading statements about conflicts of interest, fees, and investments;
   •    follow policies and procedures designed to ensure that we give advice that is in our
        clients’ best interests;
   •    charge no more than a reasonable fee for our services; and
   •    give clients basic information about conflicts of interest.

Many employers permit former employees to keep their retirement assets in their company
plan. Also, current employees can sometimes move assets out of their company plan before
they retire or change jobs. In determining whether to complete the rollover to an IRA, and to
the extent the following options are available, clients should consider the costs and benefits of
a rollover. Note that an employee will typically have four options in this situation:

   1.   leaving the funds in the employer’s (former employer’s) plan;
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Types of Clients
We provide services to individuals, high net worth individuals, pension and profit-sharing plans,
trusts, estates, charitable organizations, and corporations or other business entities.

Account Minimums
We have no minimum account size; however, we do have a minimum annual fee of $5,000.