First Foundation Advisors

Item 5           Fees and Compensation

     A. Clients can engage the Registrant to provide investment advisory services and financial
        planning as part of a single engagement or may separately engage the Registrant for financial
        planning and consulting services. The details for each of these engagements are described
        in detail below.

         INVESTMENT ADVISORY SERVICES
         The client can engage the Registrant to provide discretionary investment advisory services and
         financial planning services on a fee-only basis. The Registrant’s annual investment advisory fee
         is based upon a percentage (%) of the market value (including accruals) of the assets placed
         under the Registrant’s management as follows:
                   Market Value of Portfolio             % of Assets

                   Equity and Balanced Accounts Program
                   On the First $3,000,000           1.00% Annual Fee
                   On the Next $2,000,000            0.75%
                   Amount over $5,000,000            0.50%

                   Fixed Income Accounts Program
                   On the First $2,000,000                0.50% Annual Fee
                   On the Next $3,000,000                 0.40%
                   On the Next $5,000,000                 0.30%
                   Amount over $10,000,000                0.25%

                   Fixed Income Short Duration Accounts Program
                   On the First $5,000,000          0.25% Annual Fee
                   On the Next $10,000,000          0.20%
                   On the Next $15,000,000          0.15%
                   On the Next $25,000,000          0.10%
                   Amount Over $55,000,000          0.05%

         Although the Registrant will strive to allocate client assets consistent with the client’s
         designated investment objective, the fact that the Registrant earns a higher fee for management
         of equity and balanced account strategies, presents a conflict of interest since the Registrant
         has an economic incentive to allocate more assets to equity securities to earn more
         compensation. ANY QUESTIONS: The Registrant’s Chief Compliance Officer, Bob Roché,
         remains available to address any questions regarding this conflict of interest.

         The Registrant’s investment advisory fee is negotiable at Registrant’s discretion, depending
         upon objective and subjective factors including but not limited to: the amount of assets to be
         managed; portfolio composition; the scope and complexity of the engagement; the anticipated
         number of meetings and servicing needs; related accounts; future earning capacity; anticipated
         future additional assets; the professional(s) rendering the service(s); prior relationships with
         the Registrant and/or its representatives, competition, and negotiations with the client.

         In limited circumstances, the Registrant may agree to a flat annual fee. As a result of these
         factors, similarly situated clients could pay different fees, the services to be provided by the
         Registrant to any particular client could be available from other advisers at lower fees, and
         certain clients may have fees different than those specifically set forth above.

 Margin Accounts: Risks/Conflict of Interest. Registrant does not recommend the use of
 margin for investment purposes. A margin account is a brokerage account that allows investors
 to borrow money to buy securities and/or for other non-investment borrowing purposes. The
 broker/custodian charges the investor interest for the right to borrow money and uses the
 securities as collateral. By using borrowed funds, the customer is employing leverage that will
 magnify both account gains and losses. Should a client determine to use margin, Registrant
 will include the entire market value of the margined assets when computing its advisory
 fee. Accordingly, Registrant’s fee shall be based upon a higher margined account value,
 resulting in Registrant earning a correspondingly higher advisory fee. As a result, the potential
 of conflict of interest arises since Registrant may have an economic disincentive to recommend
 that the client terminate the use of margin. Please Note: The use of margin can cause
 significant adverse financial consequences in the event of a market correction.
 ANY QUESTIONS: Registrant’s Chief Compliance Officer, Bob Roché, remains
 available to address any questions that a client or prospective client may have
 regarding the use of margin.

 Please Note: Cash Positions. Registrant continues to treat cash as an asset class. As such,
 unless determined to the contrary by Registrant, all cash positions (money markets, etc.) shall
 continue to be included as part of assets under management for purposes of calculating
 Registrant’s advisory fee. At any specific point in time, depending upon perceived or
 anticipated market conditions/events (there being no guarantee that such anticipated market
 conditions/events will occur), Registrant may maintain cash positions for defensive purposes.
 In addition, while assets are maintained in cash, such amounts could miss market advances.
 Depending upon current yields, at any point in time, Registrant’s advisory fee could exceed
 the interest paid by the client’s money market fund.
 ANY QUESTIONS: Registrant’s Chief Compliance Officer, Bob Roché, remains
 available to address any questions that a client or prospective may have regarding the
 above fee billing practice.

 FINANCIAL PLANNING AND CONSULTING SERVICES (STAND-ALONE)
 To the extent requested by a client, the Registrant may provide financial planning and/or
 consulting services (including investment and non-investment related matters, such as estate,
 tax and insurance planning, etc.) on a stand-alone separate hourly rate basis. Registrant’s
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Item 7           Types of Clients

         The Registrant’s clients shall generally include individuals, families, pension and profit-sharing
         plans, business entities, trusts, estates and charitable organizations. In addition, the Registrant
         serves as a sub-adviser to an investment adviser to a registered investment company. The
         Registrant generally requires a minimum asset base of $500,000 for investment advisory
         services. The Registrant, in its sole discretion, may charge a lesser investment advisory fee,
         waive or modify its asset minimum, charge a flat fee, or waive its fee entirely based upon
         certain criteria (i.e. anticipated future earning capacity, anticipated future additional assets,
         dollar amount of assets to be managed, related accounts, account composition, complexity of
         the engagement, grandfathered fee schedules, merger related fee schedules, Registrant
         employees and family members, courtesy accounts, competition, negotiations with client, etc.).
         Please Note: As result of the above, similarly situated clients could pay different fees. In
         addition, similar advisory services may be available from other investment advisers for similar
         or lower fees. ANY QUESTIONS: Registrant’s Chief Compliance Officer, Bob Roché,
         remains available to address any questions that a client or prospective client may have
         regarding advisory fees.