Chappelwood Financial Services Corp

Item 5- Fees and Compensation

CFS is paid in different ways depending on the type of service a client chooses. This section
explains each fee type, how and when fees are charged, what is included, and what additional
costs clients may pay to third parties.

 Financial Planning Fees

CFS offers financial planning on a fixed-fee basis. The fee depends on the complexity of the
client’s situation, the scope of work, and the level of analysis required. Examples of factors that
may increase or decrease the fee include:

   •   Number of accounts and assets to review
   •   Complexity of retirement income planning
   •   Whether tax, estate, or business-planning coordination is needed
   •   Whether the client needs a full comprehensive plan or a limited-scope plan

Payment structure:

   •   50% of the estimated fee is due when the client signs the Investment Advisory
       Agreement.
   •   The remaining 50% is due when the plan is delivered and accepted by the client.

What the fee covers:

   •   Data gathering and analysis
   •   Written recommendations
   •   Plan presentation and explanation
   •   One round of revisions if needed

What the fee does not cover:

   •   Implementation of recommendations
   •   Commissions from insurance or securities products

   •   Ongoing monitoring (unless the client separately enrolls in an ongoing service)

Financial planning fees are negotiable, and arrangements may differ from client to client.

 Insurance Compensation

CFS does not charge clients directly for insurance products. When a client purchases an
insurance policy recommended by CFS, the issuing insurance company pays a commission to
CFS.

Important details:

   •   Commission rates are set by the insurance company and cannot be negotiated.
   •   Commissions vary by product type, carrier, and policy structure.
   •   This compensation creates a potential conflict of interest because CFS has an incentive to
       recommend insurance products.
   •   This conflict is mitigated through state-mandated suitability requirements and CFS’s
       fiduciary duty to act in the client’s best interest.

 Non-Managed Advisory Services

Clients who want ongoing access to an advisor but do not want CFS to manage their assets may
choose a subscription-style or hourly arrangement.

Available fee structures:

   •   Hourly: Minimum of $500 per hour
   •   Monthly: $125–$150 per month
   •   Annual: $1,500–$1,800 per year

These fees cover ongoing advice, check-ins, and general financial guidance but do not include
portfolio management or implementation services.

 Managed Account Fees (Assets Under Management)

Clients who choose to have CFS manage their investment accounts pay an annual Financial
Advisor Fee based on the amount of assets initially transferred to the account plus or minus
future additions or withdrawals.

The fee is based on the asset level at the start of the relationship, plus or minus any additions or
withdrawal. The Level of Assets does not change because of market fluctuations. final fee
within each tier depends on the client’s needs, the complexity of the strategy, and the amount of
work required. CFS may deviate from the stated ranges at its discretion.

Example: If a client invests $600,000 at the beginning of the relationship, the Annual Fee
Range will be 1.15% - 1.34%. If he later adds $500,000 to the new account, the new Annual Fee
Range for the account will be 1.00% - 1.14%

Annual Fee Schedule
    Level of Assets     Annual Fee Range
$0 – $499,999           1.35% – 1.95%
$500,000 – $999,999     1.15% – 1.34%
$1,000,000 – $1,999,999 1.00% – 1.14%
$2,000,000 and above 0.90% – 0.99%

How fees are billed

Fees are billed quarterly in advance based on the account market value on the last business day
of the previous quarter. Fees are typically deducted directly from the client’s account by the
AssetMark. However, Clients may choose to pay fees from a separate bank account.

Platform Provider Fees (Important)

The Financial Advisor Fee paid to CFS is separate from the Platform Provider Fee charged by
AssetMark and the Discretionary Management Fee charged by the Portfolio Strategist. Clients
should review the AssetMark Client Services Agreement for full details.

 Additional Costs Clients May Pay

Even when paying CFS’s advisory fee, clients may incur additional third-party costs, including:

   •   Mutual fund and ETF internal expenses (management fees, operating expenses)
   •   Transaction charges imposed by the custodian (if applicable)
   •   Custodial fees (if any)
   •   Taxes on transactions

CFS does not receive any portion of these fees.

 Refunds of Prepaid Fees

If the advisory relationship ends before the end of a quarter, CFS refunds the unused portion of
any prepaid advisory fees. The refund is prorated based on the number of days the account was
managed during the quarter. Refunds are also provided based on withdrawals from the account.

Example: If the client terminates halfway through the quarter, 50% of the prepaid fee is
refunded.

 Compensation for Securities Transactions

CFS and its advisors do not receive commissions for buying or selling securities. Clients may
implement recommendations through any firm they choose.

    Conflicts of Interest

CFS seeks to always act in clients’ best interests, but certain compensation structures create
potential conflicts, including:

      •   Insurance commissions
      •   Fee differences between strategies
      •   The ability to negotiate fees
      •   The use of a third-party platform that charges separate fees

These conflicts are disclosed, and CFS operates under a fiduciary duty to mitigate them.

Item 7 – Types of Clients

CFS serves individuals, families, trusts, estates, charitable organizations, and businesses.

The minimum account size is $500,000, although CFS may waive this at its discretion.