Chesley Taft & Associates LLC

FEES & COMPENSATION

CTA is compensated by the fees paid by our clients. Fees are based on the assets under
management. Our standard annual fees are 1% on the first $3 million of assets under management
and ¾ of 1% on the balance, payable quarterly. CTA may, in its sole discretion, waive or reduce its
advisory fee for certain clients.

Fees are normally deducted directly from accounts. At the client’s request they may be billed and
pay by check. Our fees are billed in advance paid in the mid part of the quarter based on the account
value on the last day of the previous quarter. Our fees cover the entire quarter. Clients will receive
account statements directly from the qualified custodian and should carefully review those
statements.
If a client relationship is terminated at any part of the quarter, we will reimburse the fees pro rata
based on the number of days we managed the account in the quarter. Clients will incur additional
expenses related to their account which are charged by third parties. These expenses include, but are
not limited to, brokerage fees paid directly to the brokers for specific transactions, custodial fees paid
to the client’s custodian, and mutual fund and exchange traded fund fees and expenses charged
within the funds.

For certain clients, CTA may recommend or utilize third-party investment programs or manager
platforms, such as the Schwab Managed Account Platform, which charge additional fees separate
from and in addition to CTA’s advisory fee. Fees of a third-party program or manager will be
charged directly by the third-party, as applicable, and the Client shall be responsible for the payment
of such fees.

In limited circumstances, CTA may charge different advisory fee rates for different asset classes or
investment strategies within a client’s portfolio. Any such fee arrangement will be disclosed to the
client in advance and set forth in the client’s advisory agreement.

        PERFORMANCE-BASED FEES & SIDE-BY-SIDE MANAGEMENT

We do not charge performance-based fees. Therefore, we have no related conflicts of interest.

TYPES       OF   CLIENTS

Our clients typically are high net worth individuals and their related entities. Related entities include
personal trust, IRA, and retirement accounts. We also manage family limited partnerships, family
Foundations, corporations/LLCs and employee benefit plans related to a client’s business. Trust
accounts include revocable trusts, irrevocable trusts, estates and guardianships.

     ADV Part 2 Brochure                          5                      Chesley, Taft & Associates, LLC

We prefer each client relationship to have minimum assets under management of $1 million. In
certain circumstances, we will accept and/or maintain relationships below that threshold.

 METHODS OF ANALYSIS, INVESTMENT STRATEGIES                                     & RISK OF LOSS

ASSET ALLOCATION

CTA portfolio managers consult with clients to determine their risk tolerance and return objectives.
We utilize economic data gathered from public and proprietary sources and analysis from brokers
and other public sources to develop short and long term economic and market outlooks. These
outlooks may include several scenarios. We incorporate risk and return characteristics for U.S. and
international equity, U.S. and international fixed income, money market, and a variety of alternative
investments to develop risk and return assumptions. We use the combination of client driven
objectives and constraints with those risk and return assumptions to develop a portfolio strategy and
an asset allocation for each client.

Primary Risks: Market assumptions may be wrong. Returns may not meet client objectives and
actual losses may exceed risk expectations.

PORTFOLIO CONSTRUCTION

Portfolios are constructed using publicly traded securities across multiple asset classes to meet client
objectives. Most managed portfolios consist of individual issues of publicly traded equities and fixed
income securities augmented by mutual funds, exchange traded funds, real estate investment trusts,
master limited partnerships and exchange traded notes (collectively referred to as “Funds”) to
enhance diversification and return potential.

In some cases, a portfolio or portfolio segment may be constructed primarily or exclusively using
Funds. This is done to maximize diversification and control transaction costs.

EQUITY ANALYSIS

Our primary method of equity analysis is focused on company fundamentals including but not
limited to:

         Competitive position based on factors such as barriers to entry and innovation
         Historical growth of revenues and earnings
         Expected future growth of revenues and earnings
         Profitability including profit margin and return of equity

        ADV Part 2 Brochure                      6                      Chesley, Taft & Associates, LLC

        Financial strength
        Financial and operating stability
        Historical trading patterns (technical analysis)

The firm relies on its own analysis, third party research, as well as research provided by major Wall
Street firms in evaluating specific stocks.

Primary Risks: The analysis of a company or stock may omit or deemphasize important factors that
impact performance. Historical information may not be useful in evaluating future results.
Expectations for company performance or economic conditions may be incorrect. Information
provided by individual companies, data providers or analysts may be inaccurate either deliberately
or inadvertently. Companies with fundamental earnings, operating and financial strength may not
provide superior returns in some market environments when lower quality, cyclical companies are
being favored.

FIXED INCOME ANALYSIS

We structure fixed income portfolios for our clients based on their tax situation and cash
requirements. Portfolios are structured using individual bonds and/or Funds. Adjustments to the
normal portfolio structure are made based on client considerations and market conditions including
the interest rate outlook, relative valuations between security types and issuers, and credit
evaluation. Other fixed income sectors such as high yield or international fixed income may be used
to diversify and/or increase return potential. These judgments are based on our own analysis and
analysis provided by brokers and credit rating agencies.

Primary Risks: Credit quality may not be assessed properly. Interest rate projections may be
incorrect. Unusual relative valuation relationships may persist.

FUND ANALYSIS

Funds are chosen to obtain exposure to a specific market segment, management style or asset class.
They are evaluated on the Fund’s risk/return characteristics and if applicable, how well they track
their targeted asset class or market segment. Attention is paid to the reputation of the Fund sponsor,
research and operational support provided by the Fund sponsor, reputation of the investment
manager, trading efficiency and cost, and the embedded expense ratio.

Primary Risks: Historical risk and return characteristics may not persist in a new market
environment. Funds may not track their underlying investments due to structural, trading or other
issues. Fund managers may not perform as expected, may leave or change strategy. Fund choice
may be influenced by ancillary services provided to us by the Fund sponsor, including the services
such as visibility into underlying fund investments, and research reports or newsletters provided by

       ADV Part 2 Brochure                        7                   Chesley, Taft & Associates, LLC

the Fund sponsor. Because different Fund sponsors provide different quality and quantity of such
services and materials, the Funds we invest in and recommend may be influenced by the receipt of
these services and materials.

PORTFOLIO STRATEGIES

Using these general investment selection criteria, we construct portfolios with varied emphasis. They
fall in these general types:
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