Howard Financial Services Ltd

Item 5 – Fees and Compensation

   Investment Management
   The scope of work and advisory fees are agreed upon in our Comprehensive Wealth
   Management Advisory Agreement and corresponding exhibit(s). In most cases, advisory fees
   are charged as a percentage of assets under management, and are calculated and paid
   quarterly, in arrears, based on the average daily balance of all billable assets in a client’s
   account(s) during the applicable calendar quarter. Clients authorize HFS to deduct advisory
   fees directly from their custodial account(s). In certain circumstances, fees may instead be
   billed directly to the client. Authorization for fee deduction is provided in the client’s advisory
   agreement. Account(s) initiated or terminated during a calendar quarter will be charged a
   prorated advisory fee, based on the number of days remaining in the calendar quarter.
   Most of our clients that are not private placements are billed based on the tiered fee schedule
   shown below. It is a blended schedule which means different asset levels are assessed at
   different rates. Our highest advisory fee charged as a percentage of assets under management
   is 1.00% for clients that are not private placements. Some clients are billed at a fixed
   percentage and are not subject to the tiered schedule. Certain clients are charged an annual
   fixed fee, not to exceed $60,000, that is paid monthly or quarterly in arrears.
                              Fee                       Asset Level
                             1.00%                     $0 - $3,000,000
                             0.85%               $3,000,001 - $5,000,000
                             0.50%                  Above $5,000,000

In some situations, HFS will hold client accounts on our custodial platforms that are
considered to be outside of HFS’ customary oversight and management. These accounts may
be designated as “Courtesy Accounts” and are client-directed accounts. For Courtesy
Accounts, HFS may charge a fixed annual maintenance fee for each such account with a ceiling
of no more than $100, payable in arrears, in equal quarterly installments. HFS is not currently
charging this fee. Courtesy Accounts will be EXCLUDED from HFS Wealth Management
advisory fee calculations.
All advisory fees are negotiable and current client relationships exist where the fees are
higher or lower than the fee schedules outlined above. HFS may aggregate related accounts
for the purpose of calculating advisory fees. Related accounts may include accounts owned
by members of the same household, family members, or entities under common control.
Aggregating related accounts may allow clients to benefit from lower advisory fee tiers under
our blended fee schedule. The decision to aggregate accounts is made on a case-by-case basis
and must be agreed upon by the client.
In certain circumstances, clients may authorize HFS to deduct advisory fees from an account
that is different from the account receiving advisory services (for example, another account
within the client’s household or an account owned by a related party). In such cases, the
account owner providing the payment must provide written authorization permitting HFS
and the custodian to deduct advisory fees from that account. Clients are encouraged to review
custodial account statements to verify that advisory fees are deducted in accordance with
their authorization.
HFS may also select and appoint, per our discretion, one or more sub-advisor(s) to clients’
account(s). Such sub-advisor(s) shall have the same discretionary investment authority and
fee deduction authority of clients’ account(s) as is granted to HFS. Authority is granted with
the execution of our Comprehensive Wealth Management Advisory Agreement. All fees
charged by sub-advisor(s) are in addition to HFS’ advisory fees.
Investments related to HFS Capital Partners maintain their own fee structure, which is
disclosed in each respective private placement’s offering documents. HFS Capital Partners
investments are EXCLUDED from HFS Wealth Management advisory fee calculations.
Our advisory fees exclude costs and expenses imposed by custodians and sub-advisors. Such
costs and expenses can include, but are not limited to, custodial fees, transfer fees, wire fees,
and securities transaction fees. Mutual funds, money market funds, and exchange traded
funds also charge internal management fees which are disclosed in a fund’s prospectus. See

Item 7 – Types of Clients

  We generally provide investment advice to high-net-worth individuals, individuals, pension
  and profit-sharing plans, trusts, estates, charitable organizations, small business owners, and
  affiliated entities. The minimum account size for investment management is $750,000.
  We have discretion to waive the account minimum.