Diversified Financial Management Associates Inc

ITEM 5: Fees and Compensation
Investment Advisory Services and Investment Manager Evaluation, Selection, and Monitoring
DFM generally has established investment advisory and manager evaluation fees for its Clients in
accordance with the fee schedule below. Each Client engaging the Advisor for services described herein
shall be required to enter into a written agreement with the Advisor. Fees are payable quarterly, at the
end of each calendar quarter. The annual fee schedule is:

               Portfolio Values of:                   Annual Fee Schedule
               On the first $1,000,000                      1.00%
               On the next $2,000,000                       0.90%
               On the next $2,000,000                       0.75%
               Values over $5,000,000                       0.50%

Although DFM does not have a minimum account size, the Advisor normally charges a minimum
annual fee of $5,000. For larger portfolios, DFM’s fee may also include ongoing financial planning as
described in the “Our Services-Financial Planning” Section. For Clients with multiple accounts, assets
may be aggregated to arrive at the Client portfolio value. The Advisor will conduct periodic reviews of
the Custodian’s valuations to ensure accurate billing.

                                     80 Washington Street, Building E-13
                                            Norwell, MA 02061
                                              (781) 792-0440
                                           www.dfmwealth.com

Fees are negotiable. In its sole discretion, DFM may charge a lesser advisory fee or waive the $5,000
minimum annual fee based upon certain criteria (historical relationship, related accounts, negotiations
with Client, expectations of significant capital additions in the future, etc.).

DFM bills fees quarterly, at the end of each calendar quarter, based on investment account values on the
last day of each calendar quarter. To calculate fees, DFM applies one-fourth of the billing rate to
account values posted on the last day of each calendar quarter in our reporting software.

Prorated fees
For new Clients, the first invoice is generally prorated from the date assets are placed in accounts, or
upon an agreed upon billing date. The prorated calculation divides one-fourth of the billing rate to the
account values posted on the last day of the calendar quarter in our reporting software divided by the
number of days in the quarter, and then multiplied by the number of days from the billing start date.
Capital flows greater than 10% of the account or group portfolio value are prorated using standard
calculations.

To calculate fees, DFM applies one-fourth of the billing rate to account values posted on the last day of
each calendar quarter in our reporting software.

Investment Advisory Services Termination
Clients have the right to terminate the advisory agreement at any time, without penalty, with written
notice. The Client may also terminate the advisory agreement within five (5) business days of signing
the Advisor’s agreement at no cost to the Client. Upon termination of the advisory agreement, fees are
prorated to the termination date, or the date the assets are scheduled to leave the account (as instructed
by the Client and hereafter referred to as the “termination date”). The prorated fee calculation divides
one-fourth of the annual billing rate by the value of the assets on the termination date, divided by the
number of days in the calendar quarter, and then multiplied by the number of days to the termination
date. DFM deducts the fee from the Client’s account (if designated) and generates a final invoice copy
for the Client’s records. Clients that pay by invoice receive a prorated final invoice that is payable upon
receipt. The Client’s investment advisory agreement with the Advisor is non-transferable without the
Client’s prior consent.

Independent Managers
As noted in Item 4, there are rare circumstances when the Advisor will utilize one or more Independent
Managers. To eliminate any conflict of interest, the Advisor does not earn any compensation from an
Independent Manager. The Advisor will only earn its investment advisory fee as described above. For
Client accounts implemented through an Independent Manager, the Client’s overall fees will include
DFM’s investment advisory fee (as noted above) plus investment management fees and/or platform fees
charged by the Independent Manager. The Independent Manager will assume the responsibility for
calculating the Client’s fees and deducting all fees from the Client’s account[s].

Independent Manager[s] Termination
In the event that a Client should wish to terminate their relationship with an Independent Manager, the
terms for termination will be set forth in the respective agreements between the Client and those third
parties. DFM will assist the Client with the termination and transition as appropriate.

                                      80 Washington Street, Building E-13
                                             Norwell, MA 02061
                                               (781) 792-0440
                                            www.dfmwealth.com

Financial Planning Services
DFM typically offers financial planning services for no charge as a courtesy to DFM investment
advisory Clients. For non-advisory Clients requesting financial planning, DFM may assess a fixed
financial planning fee based on the complexity of the Client’s financial situation and the scope of
planning required. Alternately, fees may be calculated based on an hourly rate of $350. As agreed to in
advance with the Client, this fee is payable in installments as work is performed or upon completion.

Financial Planning Services Termination
DFM is compensated for its services upon completion of the engagement deliverable[s]. Either party
may terminate the financial planning agreement by providing advance written notice to the other party.
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ITEM 7: Types of Clients
DFM provides investment advisory services to individuals, high net worth individuals, trusts, estates,
businesses, and retirement, pension, and profit sharing plans. Although DFM does not have a minimum
account size, DFM normally charges a minimum annual fee of $5,000. (See Item 5 – Fees and
Compensation, for more information).