HMS Financial Services LLC

Item 5: Fees and Compensation
Description

HMS bases its fees on a percentage of assets under management. The annualized Advisory Service
Agreement fee is based on a percentage of the investable assets in all managed accounts according to
the following schedule:

        Client Assets Under Management                       Annualized Management Fee (%)
  Up to $500,000                                                           1.00%
  $500,001 to $1,500,000                                                   0.75%
  $1,500,001 to $3,000,000                                                 0.50%
  $3,000,001 to $5,000,000                                                 0.35%
  Above $5,000,000                                                         0.10%

The minimum annual fee is $375 and is negotiable. Current client relationships may exist where the fees
are higher or lower than the fee schedule above. Fees may be negotiable.

Fee Billing

Investment management fees are billed quarterly, in arrears, meaning that we invoice you after the three-
month billing period has ended. Payment in full is expected upon invoice presentation. Clients may
authorize Custodians to deduct fees directly from client accounts. The client must consent in advance to
direct debiting of their investment account.

Other Fees

Custodians may charge transaction fees on purchases or sales of certain mutual funds, stocks, and
exchange-traded funds. These transaction charges are small and incidental to the purchase or sale of a
security. The selection of the security is more important than the nominal fee that the custodian charges
to buy or sell the security.
HMS, in its sole discretion, may waive its minimum fee and/or charge a lesser investment advisory fee
based upon certain criteria (e.g., historical relationship, type of assets, anticipated future earning
capacity, anticipated future additional assets, dollar amounts of assets to be managed, related accounts,
account composition, negotiations with clients, etc.).

Mutual Funds - Expense Ratios and Share Class Selection

Mutual funds charge a management fee for their services as investment managers. The management
fee is called an expense ratio. For example, an expense ratio of 0.50 means that the mutual fund
company charges 0.5% for their services. These fees are in addition to the fees paid by you to HMS.
Please note that the performance figures quoted by mutual fund companies in various publications are
after their fees have been deducted.
Mutual Funds typically offer multiple share classes available for investment based upon certain eligibility
and/or purchase requirements. For instance, in addition to the more commonly offered retail mutual fund
share classes (typically, Class A, B and C shares), mutual funds may also offer institutional, or advisor
share classes (the “lower cost share classes”) or other share classes that are designed for purchase in
an account enrolled in advisory programs. These lower cost share classes usually have a lower expense
ratio than other shares classes. In addition, lower cost share classes often do not charge a 12b-1 fee.
The Firm will utilize the most appropriate mutual fund share classes for its portfolio allocations available
to it. Regardless, clients may still be invested in funds with higher internal expenses when no lower cost
share classes for a fund are available to the custodian or the client is not eligible due to investment
minimums or other requirements.

Past Due Accounts and Termination of Agreement

HMS reserves the right to stop work on any account or directly debit certain client accounts that are more
than 30 days overdue. In addition, HMS reserves the right to terminate any financial planning
engagement where a client has willfully concealed or has refused to provide pertinent information about
financial situations when necessary and appropriate, in the judgment of HMS, to providing proper
financial advice.

Item 7: Types of Clients & Account Requirements
Description

HMS provides services to the following types of clients:
           •   Individuals and High Net Worth Individuals;
           •   Trusts, Estates or Charitable Organizations;
           •   Pension and Profit-Sharing Plans;
           •   Corporations, Limited Liability Companies and/or Other Business Types.
Client relationships vary in scope and length of service.

Account Minimums

HMS does not maintain an account minimum, but we reserve the right to refuse to provide services for
accounts representing a minimally invested relationship with our firm.
In general, if an account falls below $37,500 in value, the minimum annual fee of $375 is charged,
however this may be waived or lowered depending upon the type of client or account. HMS has the
discretion to waive the account minimum. Accounts of less than $37,500 may be set up when the client
and the advisor anticipate that the client will add additional funds to the accounts or have the intention of
expanding the investment management relationship over a reasonable amount of time. If HMS elects to
accept these low balance accounts without the expectation of additional funds, the firm will do so on an
accommodation basis and provide a reduced minimum annual fee commensurate with the account. Other
exceptions will apply to employees of HMS and their relatives, or relatives of existing clients.
Unless otherwise stipulated with respect to new client accounts or relationships, clients receiving ongoing
asset management services will be assessed a $375 minimum annual fee. Clients with assets below the
minimum account size may pay a higher percentage rate on their annual fees than the fees paid by clients
with greater assets under management.

Retirement Accounts

As part of our investment advisory services to you, HMS may recommend you roll assets from your
employer’s retirement plan, such as a 401(k), 457, or ERISA 403(b) account (collectively, a “Plan
Account”), to an individual retirement account, such as a SIMPLE IRA (Individual Retirement Accounts),
SEP IRA, Traditional IRA, or Roth IRA (collectively, an “IRA Account”) our firm will manage on your
behalf. We may also recommend rollovers from IRA Accounts to Plan Accounts, from Plan Accounts to
Plan Accounts, and from IRA Accounts to IRA Accounts. When we provide any of the foregoing rollover
recommendations we are acting as fiduciaries within the meaning of Title I of the Employee Retirement
Income Security Act (“ERISA”) and/or the Internal Revenue Code (“IRC”), as applicable, which are laws
governing retirement accounts.

If you elect to roll the assets to an IRA subject to our management, HMS will charge you an asset-based
fee as set forth in the advisory agreement you executed with our firm. This creates a conflict of interest
because it creates a financial incentive for our firm to recommend the rollover to you (i.e., receipt of
additional fee-based compensation). You are under no obligation, contractually or otherwise, to complete
the rollover. Moreover, if you do complete the rollover, you are under no obligation to have the assets in
an IRA managed by our firm. Due to the foregoing conflict of interest, when we make rollover
recommendations, we operate under a special rule that requires us to act in your best interests and not
put our interests ahead of yours. Under this special rule’s provisions, we must:
       meet a professional standard of care when making investment recommendations (give prudent
       advice);
       never put our interests ahead of yours when making recommendations (give loyal advice);
       avoid misleading statements about conflicts of interest, fees, and investments;
       adhere to the policies and procedures designed to ensure that we give advice that is in your best
       interests;
       charge no more than a reasonable fee for our services; and
       give you basic information about conflicts of interest.

Many employers permit former employees to keep their retirement assets in their company plan. Also,
current employees can sometimes move assets out of their company plan before they retire or change
jobs. In determining whether to complete the rollover to an IRA, and to the extent the following options
are available, you should consider the costs and benefits of a rollover. Note that an employee will typically
have four options in this situation:
       leave the funds in your employer’s (former employer’s) plan;
       move the funds to a new employer’s retirement plan;
       cash out and take a taxable distribution from the plan; or
       move the funds into an IRA rollover account.

Each of these options has positives and negatives. Because of that, along with the importance of
understanding the differences between these types of accounts, we will provide you with a written
explanation of the advantages and disadvantages of both account types and the basis for our belief that
the rollover transaction we recommend is in your best interests.