Financial Management Advisors Inc

Item 5 – Fees and Compensation

Fees are charged on a “fee for services rendered” basis. Fees are negotiable and may vary from client to client.
Fees are quoted in advance and must be accepted by client prior to project commencement or investment
management. Executing a signature on the Asset Management & Investment Advisory Agreement acknowledges
acceptance by client.

“FMA’s” negotiation of investment management fees are based on one or more of the following factors:

    •   The number of accounts, positions, account objectives, risk tolerances and restrictions requested by the
        client.
    •   The estimated amount of time expended in researching, analyzing and documenting the specific
        recommendation(s) and course(s) of action.
    •   The requests of each client regarding follow up and forms of communication requested
    •   The familiarity (or lack thereof) between FMA and the client based on experience and client interaction.
    •   A competitive analysis of other advisory firms’ fees.
    •   Whether the quarterly fee is deducted from the account or paid directly by client.
    •   The total amount of assets requested to be managed.

The client agrees to supply FMA with the ability to deduct fees from the account(s) on a quarterly basis. Advisory
fees are based upon a percentage of the average daily balance of assets under management at the time of
calculation. Advisory fees are determined for each calendar quarter by applying the applicable portion of the
annual percentage fee to the value of the assets then comprising the client’s portfolio. Clients may choose to pay
fees by check. If so, fees are due and payable upon receipt of the quarterly FMA invoice.

The following is an example of how a quarterly fee is calculated:

If $800,000.00 is the average daily balance for the quarter of assets under management at an annual fee of
1.7% would render the following quarterly bill.

1.7% annual fee divided by 4 individual quarterly periods = .00425

$800,000.00 x .00425 = $3400.00 Fee for the quarter

Annual percentages applied currently range from .15% to a maximum fee of 2%, but are subject to change, and
are subject to negotiation and individual determination based upon particular facts and circumstances of a client
and the extent of advisory services anticipated.

FMA expects to receive no additional compensation for the servicing of advice-based client accounts. FMA prefers
Clients use a non-commissionable product offering from a high-quality custodian that offers low or no fees, low
or no ticket charges and is generally a good fit for the client. When clients are found to have a need that may be
best served with a variable annuity, the compensation of any such commission is evaluated and considered when
charging investment advisory fees. The policy FMA has adopted is that during the first year of variable annuity
purchases no asset management fee will be charged. If the client wishes to have the advisor manage the account,
a nominal fee, generally $100 fixed, paid semi-annually, can be negotiated.
For the purpose of implementing recommendations and effecting transactions in the course of construction of a
client portfolio and ongoing monitoring or management, FMA may direct advisory clients to a licensed securities
broker-dealer with which he/she is affiliated as a registered representative. Investment Advisory Representatives
(IARs) who choose to effect transactions for advisory clients through a securities broker/dealer with which they

are affiliated, may receive certain types of transaction-based compensation, which is in addition to the advisory
fees paid to the IAR by clients. The policy FMA has adopted is to reduce the advisory fee by the amount of any
commission being generated by the client.

Receiving compensation by any method other than through advisory fees may cause a conflict of interest. Fees or
expenses that clients may pay in addition to the Advisor Fee include: IRA Maintenance Fees imposed by the
custodian, ticket charges imposed by the custodian, mutual fund expense ratios and 12b-1 fees charged by the
fund companies themselves. However, members of FMA do not participate in any portion of these fees when the
client is trading through an Investment Advisory Account. They are fees charged by third party vendors associated
with servicing the client accounts. Custodians and Fund Companies have their own fees and expenses and we will
be glad to help you understand the expenses imposed the by the custodians servicing your account.

FMA receives no commission compensation from Schwab Advisor Services with regard to client transactions. The
platform at Schwab Advisor Services is a quality, low or no fee, low or no ticket charge, brokerage option that has
been a good fit for investment management services.

FMA management programs are not considered “wrap fee programs” in that clients are responsible for paying any
and all transaction costs, including but not limited to, customary ticket charges, postage and service fees and
annual maintenance fees that may be issued by the custodians.

In general, investments utilized within our asset management programs are available for purchase through
brokers, agents, and/or other advisors that are not affiliated with FMA. However, if securities or insurance
products are purchased through members of FMA as brokers or insurance agents, then customary commission
can be produced to the selling broker/agent and therefore, costs to the client may be higher.

Hourly Charges and Fixed Fees Charged by Advisor

Advisor provides planning services consistent with the individual client's financial and tax situation, risk tolerance
and objectives. These fees are typically negotiated when special projects are needed by the client. An example
of special projects includes, but are not limited to: Financial Planning for Client, Family or Business, Education
...

Item 7 – Types of Clients

FMA’s clientele could be categorized as individuals, businesses, estates, partnerships, trusts and qualified plans.
The services offered to each may vary and is largely dependent upon the client’s unique circumstances. FMA has
each client execute an independent agreement and each agreement offers services separately to each individual
client. This brochure is not designed for non-discretionary qualified plans. Non-discretionary qualified plan clients
will receive a separate disclosure brochure.

FMA imposes account minimums for the Moderate Growth and Aggressive Growth programs in the amount of
$15,000. The Conservative Growth Program has an account minimum of $30,000. The Dynamic Investment
Management: Ultra Dynamic Strategy has an account minimum of $100,000. The Dynamic Investment
Management: Long Only Strategy and Dynamic Strategy have an account minimum of $25,000. These minimums
are negotiable. The firm requires clients to disclose current financial status and investment objectives to the
Advisor at the time of opening an investment account. These documents are updated as needed. Clients are
requested to inform the Advisor whenever the client has experienced a significant change in financial status or
condition or wish to change the investment objectives on the account. (Example: Client wishes to change
investment objective from the Aggressive Growth Program to the Moderate Growth Program. The client would
need to complete a new account form that evidences this request.)