Cannon Financial Strategists Inc

5. FEES AND COMPENSATION
Fees and compensation services depend upon the type and depth of services provided.
The following is a summary of fees and compensation by service area.
With respect to all advisory services provided; financial instruments recommended by
the advisor generally do not pay a commission. If, however, the best instrument that
would help a Client most efficiently meet their financial objective pays a commission and
is included in the Client portfolio aggregate for billing purposes, the fee charged to the
Client will be offset by the commission amount.
I. Investment Advisory Services
Investment advisory fees are charged based upon the type of service provided. Below is
an overview of how fees are charged based upon service type.
   a) Wealth Management Services – Fees charged on Client’s assets under
      management are based on rates agreed upon within the Client’s Investment
      Advisory Agreement. Asset-based fees are billed quarterly, in arrears, based
      upon the average daily balance of the account for the entire billing period.
      The fee structure for assets under management is a progressive scale with a
      decreasing percentage charged to higher asset levels:
                           Asset Base             Annualized Fee %
                   $-0-      – $ 400,000                1.00
                   $400,000 – $ 600,000                 0.75
                   $600,000 – $1,500,000                0.50
                   $1,500,000 – $2,500,000              0.35
                   $2,500,001 +                         0.25

      Payment of compensation may be made directly by the Client or the Client may

       authorize the deduction of fees directly from the Client's account. Either party
       may terminate the service for any reason, at any time, and without penalty, by
       providing thirty (30) days’ prior written notice to the other party. Fees for advisory
       services are negotiable in some circumstances.
       There may be other fees to cover execution, brokerage, and custodial costs.
       Such fees can be discussed further as needed. The Client has authorized the
       Custodian to deduct all transaction charges and other charges from the Client’s
       account.
   b) Direct Mutual Fund Services – The fee percentage charged for Direct Mutual
      Fund Services is an annualized rate of 0.50%, calculated and deducted from
      Client’s account(s) quarterly. This fee represents all compensation Advisor
      receives. Advisor does not receive commission or any other form of direct
      compensation from the mutual fund company.
       Fees shall be calculated by the mutual fund account provider. For accounts
       provided by American Funds Services Company, fees are calculated for each
       quarterly period ending the last business day of February, May, August, and
       November and shall be the product of (i) the average daily net asset value of
       Client assets during the quarter; (ii) the number of days in the quarter; and (iii)
       0.50% divided by the number of days in the year. The fees shall be paid within
       thirty (30) days following the end of the quarter for which such fees are payable.
       Advisor reserves the right to revise the compensation structure with 30 days
       written notice. Either party may terminate the service for any reason, at any time,
       and without penalty, by providing thirty (30) days’ prior written notice to the other
       party.
II. Financial Planning Services
Fees for financial planning services are charged on an hourly basis at rates based upon
the advisor’s experience level. Rates will be discussed with Clients prior to engagement
and billing.
No fee is charged for the initial client interview which is used to determine if a
Client/Advisor relationship will be established. After a relationship has been established
the Client will be billed for all time spent on Client business. Hourly fees will be billed
and payable monthly or quarterly depending on the level of service provided. No bill will
be sent unless services have been provided in the previous billing time period.
III. Retirement Plan Advisory Services
Fees for retirement plan advisory services depend on the relationship desired by the
Plan Sponsor. Fees for services may be charged based on assets, at a flat fee for a
certain scope of services, or at an hourly rate. Fees vary based on the nature of the
engagement, services provided, and the size of the plan.

Asset-based fees are based upon the size of the plan and the desired services. Fees

range from 5 basis points (0.05%) to 50 basis points (0.50%). These fees may or may
not be combined with a flat fee for a certain scope of service depending upon the
engagement.
Flat fee and/or hourly-rate fee will be agreed upon prior to engagement and
documented within the Retirement Plan Investment Advisory Agreement.
Invoices may be paid by the Plan or by the Plan Sponsor depending upon the nature of
the services provided and the Sponsor’s desire for payment method. Invoices are
typically done in arrears. Certain prepayments of project-based work may be required,
usually at 50% of the flat fee.

7. TYPES OF CLIENTS
Cannon provides services to a number of different clients under each of the service
models previously described. These types of clients included, but are not limited to:
   •   Individuals and families, including high-net-worth individuals
   •   Pension and profit-sharing plans
   •   Corporations and other business entities
   •   Non-profit and governmental entities
   •   Trusts, estates, or charitable organizations