Chapin Davis Inc

Fees and Compensation
A portion of the Wrap Fee will be paid to the IAR(s) in connection with providing investment
advisory services. This compensation could be more or less than an IAR would receive if you paid
separately for investment advisory services in a non-wrap fee structure.

The Programs described in this brochure apply a Program Fee on Eligible Program Assets. CDAM
currently does not implement a Firm wide Wrap Fee schedule. However, default Program fees are
indicated in the Program Agreements and are negotiable between the client and the IAR. Excluded
Assets are not included in the calculation of the Program Fee. For transactions in Excluded Assets,
you will pay all usual and customary brokerage commissions/sales charges, transaction fees and
other charges. Commissions and fees on Excluded Assets and other charges will be assessed

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against your Account on or about the transaction date or another date when assessed by us or the
Clearing Firm. Refer to the Program Agreement for details on fee exclusions, calculations, refunds
and other information.

IARs must structure the service offered to their clients for efficiency and in accordance with their
professional capabilities. The IAR considers many factors when recommending the Program Fee
including: the amount of household assets under management, projected assets, the complexity of
the investments, expenses applied that are not covered by the Program agreement, number of
household accounts, account investment objective, anticipated transaction level, account position
composition, pre-existing/legacy client relationship, account retention and special considerations
for non-profit or charitable organizations, relationship interactions, financial and retirement
planning and consulting considerations. IARs are professionals who are compensated for their
advisory experience, guidance, knowledge, professional management services and the
implementation of those recommendations and service requests. This includes services and
recommendations that do not result in action taken. As an example, an annual investment review
resulting in no recommended changes still required the time and work of the IAR. Clients may pay
different Program Fees across the Firm and within the households serviced by the IAR.

We want all clients to make money from their investments and reach their goals. However, much
of the nature of investing is out of our control. Future market conditions and performance are
subject to change and cannot be predicted. The Program Fee will be applied regardless of whether
you make or lose money. Generally, IARs of the Firm work independently from one another. They
have their own style of service, and their investment approach may differ from opinions expressed
by the Firm or other IARs. The Program Fee is individually negotiated based on the factors
described above. However, a household with assets over $2 million will likely pay a lower fee
percentage than an account with $50,000 all other things being relatively equal. IARs usually offer
their immediate family or related accounts a lower fee than other accounts with similar fact
patterns.

When discussing fees and our compensation, and the associated conflicts, we feel it is important
for you to understand our costs and expenses and those related conflicts. Through CDAM’s
relationship with the affiliated BD, CDAM is charged a Platform Fee to utilize the services of the
clearing firm’s Advisory Program Platform. The Platform Fee supports the administrative services
provided to us by the clearing firm to maintain and operate the Programs. This Platform Fee pays
for the billing of your Program accounts, the processing of our account instructions, performance
reporting made available to you and us, and a limited amount of trading costs for trades in the
Programs. Asset Advisor and CustomChoice allow an allotted number of trades for us per year.
This is an expense to us and your IAR. Expenses for the Platform are negotiated by the BD with
the clearing firm. The Platform Expenses are structured as a basis point percentage of the Program
Fee. It is a tiered, sliding schedule applied to the first $100k, $101k-$250k, etc. For example, the
expense applied to us is a basis point percentage on the first $100,000, and a reduced percentage
on the next $101,000-250,000 and so on. NOTE: Clients who have legacy accounts or transferred
to CDAM as a result of a merger or new advisor joining CDAM may be granted an exception to
this fee schedule.

The clearing firm expenses not covered in the Program, are generally deducted from the IAR’s
gross compensation unless there is an arrangement between the IAR and CDAM to cover such

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expenses. These expenses include directing trades other than through the Clearing firm, foreign
receive and delivery fees for foreign securities, trade corrections, and clearing and execution costs
over the allotted number of trades. This creates a conflict for the IAR as their compensation will
be reduced by the expenses applied to them and thus have an incentive not to engage in the actions
that would trigger these expenses. Please discuss with the IAR if you would like to trade foreign
securities or foresee a higher level of trading over the allotted amount per year. The allotment
includes both solicited and unsolicited trades, so your trade requests will apply to this count.

The IAR is assessed a monthly expense for Program accounts with values below $50,000. This
creates a conflict as the IAR’s expense to maintain these accounts will be higher, thus the Program
Fee recommended would need to factor in this expense. For account balances below $50,000,
please discuss the options available with your IAR.

Program Fee Calculation
Program Fees are calculated on Eligible Assets, the billable asset value and fee calculation
methodology is detailed in the Program Agreement, and in the section covering Eligible and
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