Carolina Financial Advisors Inc

Item 5: Fees and Compensation

Fees for Investment Management Services including Values-Based Portfolios:
Compensation is based on total assets under management.

         Assets Under Management                         Annual Management Fee:
              $0 to $1,000,000                                  1.00-2.5%
          $1,000,001 to $2,000,000                              0.85-2.5%
          $2,000,001 to $5,000,000                              0.65-2.5%
         $5,000,001 to $10,000,000                              0.50%-2%
             Above $10,000,000                              To be negotiated.

Clients are charged at the end of the quarter. Fees are billed in arrears after the close of the
quarter.

Investments in mutual funds may incur management fees in addition to those charged by
CFA (see below).

Fees for Individual Financial Planning Services:
Clients may choose either an hourly fee or a fixed fee. Hourly fee clients are billed the
actual number of hours spent by CFA at an agreed upon rate. All fees are billed in arrears.

General Information on Advisory and Financial Planning Services / Fees

    1. All client accounts may be invested in mutual funds, exchange traded funds (or
       similar securities). These securities carry additional fees and expenses (including
       advisory fees) that are in addition to CFA’s fees for our services. As a result, you
       should evaluate the total of the fees to ensure the services received are reasonable
       from a total cost perspective.

    2. CFA’s fees are negotiable whether for advisory or financial planning services.

    3. Accounts for employees and their family members (or friends of CFA) may be
       managed for reduced fees or no fee. Exceptions to our standard fees (charged to
       Clients who are not employees, their family members or friends of the firm may
       result in a conflict of interest and possibly variation in the degree to which the
       accounts are managed. However, our services are consistently provided to all
       clients, including those described here.

At no time will CFA direct funds to itself or its employees, with the exception of the
deduction of management fees. These management fees may be deducted from the client’s
account(s) only when the following occur:

    1. The Client authorizes the account custodian in writing to accept directions of CFA
       to deduct the fee (as stated in the advisory agreement);

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    2. The Client is sent an informational invoice and the custodian is advised of the
       amount to be deducted simultaneously. The invoice to the client shows the base
       amount on which the fee is calculated, the fee percentage and the actual amount to
       be deducted;

    3. The quarterly or monthly statements from the custodians must show the deduction
       of the management fee in the listing of transactions occurring in the account during
       the period.

    David L. Belk, Patrick Williford and William (“Bill”) Poland, in their outside business
    activities (see Item 10 below) are licensed to accept compensation for the sale of
    insurance products to CFA clients. This may present a conflict of interest and could
    give the supervised person an incentive to recommend products based on the
    compensation received rather than on the client’s needs. When recommending the sale
    of insurance products for which the supervised persons receives compensation, CFA
    will document the conflict of interest in the client file and inform the client of the
    conflict of interest.

    Commissions are not CFA’s primary source of compensation for advisory services.
    Advisory fees that are charged to clients are not reduced to offset the commissions or
    markups on insurance products recommended to clients.

Item 7: Types of Clients

CFA provides investment advisory services to:
  • individuals;
  • trusts;
  • estates;
  • corporations;
  • pensions and/or profit-sharing plans; and
  • non-profit organizations
CFA provides financial planning services to individuals.

CFA does not require a minimum to establish an investment advisory account. CFA will
recommend to Clients that they start their managed accounts with a minimum of at least
$250,000.

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