Financial Advisory Corporation

Item 5 – Fees and Compensation (continued)

Retirement Plans
For retirement plan clients, FAC is deemed to be a fiduciary according to the Employee
Retirement Income and Securities Act (“ERISA”). Because of this, we are subject to
specific duties and obligations under ERISA and the Internal Revenue Code that include
among other things, restrictions concerning certain forms of compensation. To avoid
engaging in prohibited transactions, we only charge fees for investment advice and
services related to that advice and do not receive any commissions or other fees.

                                         FORM ADV PART 2A

Performance-Based Fees and Side-By-Side Management

Item 7

FAC provides advisory services to the following types of clients:

         •   High net worth individuals and families
         •   Individuals other than high net worth individuals
         •   Retirement plans
         •   Non-profit organizations

We do not have initial minimum account size requirements. However, as
previously disclosed in item 5, Fees and Compensation, we have a minimum
annual fee of $19,000. For most clients, this fee is appropriate for account sizes
with at least $2,000,000 in combined investment accounts.

                                               FORM ADV PART 2A

Methods of Analysis, Investment Strategies and Risk of Loss