Cambridge Investment Research Advisors Inc

Fees and Compensation

In addition to the information provided in the Advisory Business section, this section provides details regarding CIRA’s
services along with descriptions of each service’s fees and compensation arrangements. Please keep in mind that CIRA has
the right to refuse any contract submitted for approval. If the appropriate disclosure statement (i.e. this document or a
separate written disclosure statement containing the same information as this document) is not delivered to you at least 48
hours prior to you entering into a CIRA agreement, you have the right to terminate services without penalty (i.e. full refund
of all fees paid in advance or, in the event fees are billed in arrears, no fees shall be due) within five (5) business days after
entering into the agreement. For purposes of this provision, an agreement is considered entered into when all parties have
executed the agreement.

Financial Planning and Consulting
Fees for Financial Planning and Consulting services can be paid through a variety of options determined by you and your
Financial Professional. The fee arrangement should be expressed on the appropriate CIRA Agreement. The fee options
include the following:

    •    Flat Fee Agreement – The fee will vary depending on a variety of factors, depending on the scope of services
         provided, complexity of the process undertaken, the types of issues addressed and the frequency of services. Flat
         fees charged for financial planning services generally do not exceed $25,000 for individuals, however, we may
         approve higher fees based on the scope of services provided, complexity of the process undertaken, the types of
         issues addressed and the frequency of services. Frequency of payment can be one-time, installment or ongoing at
         a frequency agreed upon by you and your Financial Professional.

    •    Hourly Fee Agreement – Financial Professionals are generally not allowed to charge more than $500 on an hourly
         basis.

    •    Asset Based Fee Agreement – Investment Consulting services provided based on assets held outside of CIRA fall
         under an Asset Based Fee Agreement. The fee for such services will be a percentage of all assets being managed by
         the Financial Professional.

Financial Planning fees described above do not include the fees you will incur for other professionals (i.e. personal attorney,
independent Investment Adviser, or accountant) in connection with the financial planning process.
In some instances, fees higher than those stated above will be charged if the scope of the project agreed upon warrants a
higher fee. All fees are negotiable and are agreed upon prior to entering into a contract.
When the contracted services include providing a physical or electronic document, you will generally receive your financial
plan within 90 days of entering into a financial planning contract, provided that all information needed to prepare the
Financial Plan has been promptly provided by you.
Fees for ongoing financial planning services are due in accordance to the timeframe agreed upon between you and your
Financial Professional. You can authorize fee payment for these services from either a Cambridge brokerage account, a CIRA
management account or from your checking or savings account. The Cambridge brokerage account or the CIRA
management account used for debiting generally must be a non-qualified account on a platform approved for fee debiting.
You can also choose to pay the financial planning fee by debit or credit card provided your Financial Professional provides
this service. The exact fee you will be charged is contingent upon the nature and complexity of your overall financial
circumstances. The contract will automatically renew on an annual basis, unless agreed upon to be a one-time service.
Fees for ongoing consultation services are due in accordance to the timeframe agreed upon between you and your
Financial Professional. The exact fee you will be charged is contingent upon the nature and complexity of your overall
financial circumstances. The investment advisory fee will be divided and billed on a quarterly basis. You and your Financial
Professional have the option to choose to have a one-time fee instead of the above billing options. Fees are charged in

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advance or in arrears depending on the specific arrangement. The contract will automatically renew on an annual basis
unless agreed upon to be a one-time fee.
Certain charges are imposed by third parties other than CIRA in connection with investments recommended through
consulting arrangements, including but not limited to, mutual fund and custodial fees. Consulting fees charged by CIRA are
separate and distinct from the fees and expenses charged by investment company securities that are recommended to you.
A description of these fees and expenses are available in each investment company product prospectus.
Financial Professionals have the option to waive agreed upon financial planning or consulting fees and expenses if you
purchase products or enter into agreements for other services with the Financial Professional. You and the Financial
Professional preparing the financial plan or providing the consultation services will determine the exact fee and the manner
in which the fee is to be paid. Financial Professionals negotiate fees with each of their clients based on the complexity of
that client’s personal circumstances, financial situation and the services that will be provided, the scope of the engagement,
the client’s income, the experience and standard fees charged by the Financial Professional providing the services, and the
nature and total dollar asset value of the asset upon which services will be provided. In addition, fees may be negotiated
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Types of Clients

CIRA generally provides investment advice to the following types of clients:
    • Individuals
    • High net worth individuals
    • Banking or thrift institutions
    • State or municipal government entities
    • Pension and profit-sharing plans
    • Trusts, estates, or charitable organizations
    • Corporations or business entities other than those listed above

All clients are required to execute an agreement for services in order to establish a client arrangement with CIRA.

Minimum Investment Amounts Required
CIRA typically imposes a minimum investment amount of $25,000 to establish an account on the Cambridge Managed
Account Platform or Flexible Managed Account Platform. However, the minimum investment amount may be waived under
certain circumstances for specific registrations or if you are part of a household that has at least one CIRA account with a
value of $25,000.
Sponsors of the Third Party Investment Adviser programs that CIRA participates in are responsible for determining account
minimums and whether such minimums are negotiable. If an account minimum is not established by the Third Party
Investment Adviser, CIRA suggests that you invest at least $25,000 in the investment management services. CIRA will accept
accounts with less than $25,000 in assets if CIRA believes that, based on information provided by you to your Financial
Professional, investing a lower amount is appropriate for you and is acceptable to the program sponsor.
It should be noted that some Financial Professionals impose higher account minimums than the $25,000 level established
by CIRA. Accounts are not allowed to be aggregated to meet program minimums. You should consult with your Financial
Professional to determine the required account minimum.
A minimum initial investment of at least $5,000 is required to participate in the WealthPort Program, however, in Advisor-
directed, the minimum investment amount may be waived under certain circumstances for specific registrations or if you
are part of a household that has at least one CIRA account with a value of $25,000. Depending on whether you are utilizing
Advisor-directed, Team-directed, CAAP® or UMA, higher minimums apply. Your Financial Professional can discuss the
specific minimums that apply to your selection.
If you close a CAAP® account or if you reduce the account balance below the minimum account value during the first twelve
(12) months, you will be charged a fee up to a maximum of $500 in order to cover the administrative costs of establishing
the CAAP® account(s).

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                            Methods of Analysis, Investment Strategies and Risk of Loss

Financial Professionals use various methods of analysis and investment strategies. Methods and strategies will vary based
on the Financial Professional providing the advice. Models and strategies used by one Financial Professional will be
difference than strategies used by other Financial Professionals. Some Financial Professionals use just one method or
strategy while other Financial Professionals rely on multiple. CIRA does not require or mandate a particular investment
strategy be implemented by its Financial Professionals. Further, CIRA has no requirements for using a particular analysis
method and Financial Professionals are provided flexibility (subject to CIRA’s supervision and compliance requirements)
when developing their investment strategies. The following sections provide brief descriptions of some of the more
common methods of analysis and investment strategies that are used by Financial Professionals.

Methods of Analysis in Formulating Investment Advice
Following are brief descriptions of some of the more common methods of analysis and investments strategies that are used
by Financial Professionals.

    •   Fundamental Analysis – This is a method of evaluating a company or security by attempting to measure its
        intrinsic value. In other words, trying to determine a company’s or a security’s true value by looking at all aspects
        of the business, including both tangible factors (e.g., machinery, buildings, land, etc.) and intangible factors (e.g.,
        patents, trademarks, “brand” names, etc.). Fundamental analysis also involves examining related economic factors
        (e.g., overall economy and industry conditions, etc.), financial factors (e.g., company debt, interest rates,
        management salaries and bonuses, etc.), qualitative factors (e.g., management expertise, industry cycles, labor
        relations, etc.), and quantitative factors (e.g., debt-to-equity and price-to-equity ratios).
        The end goal of performing fundamental analysis is to produce a value that an investor can compare with the
        security’s current price in hopes of determining what sort of position to take with that security (underpriced = buy,
        overpriced = sell or short). This method of security analysis is considered to be the opposite of technical analysis.
        Fundamental analysis is about using real data to evaluate a security’s value. Although most analysts use
        fundamental analysis to value stocks, this method of valuation can be used for just about any type of security.

    •   Technical Analysis – This method of evaluating securities analyzes statistics generated by market activity, such as
        past prices and volume. Technical analysts do not attempt to measure a security’s intrinsic value, but instead uses
        charts and other tools to identify patterns that can suggest future activity. Technical analysts believe that the
        historical performance of stocks and markets can assist in predicting future performance.

    •   Charting – Charting is the set of techniques used in technical analysis in which charts are used to plot price
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