Kelley Investments LLC

Item 5 – Fees and Compensation

As described in greater detail below, Kelley Investments charges different fees based
upon services provided. The specific fees charged by the Firm will be set forth in the
Client’s Agreement. Fees are negotiable under certain circumstances at the sole
discretion of the Firm. In addition, the Firm has full discretion to waive its advisory fees
in their entirety.

A. Wealth Management Fees

For providing our Wealth Management Services, we asses an annual fee based on a
percentage of the market value of the account. The annual wealth management fee
charged ranges up to a maximum of 1.75% of the assets held in the account (including
cash and cash equivalents). The exact Wealth Management Fee is set forth in the
respective Client’s Agreement, and is based on several factors, including but not limited
to the following:

   •   The scope and nature of services request by Client which might involve:
           o Active Investment Management
           o Wealth Management
           o Estate Planning and Wealth Transfer Strategies
           o Risk Management, Asset Protection, and Insurance Reviews
           o Strategies to Minimize Taxes
           o Retirement Plan Consulting
           o Retirement Income Strategies
           o Charitable Giving Strategies
           o Executive Services
           o Closely-held Business Owners Services
           o Behavioral Finance Consulting
   •   Wealth education meetings
   •   The complexity and time involved in delivering wealth management services
   •   The total amount of household assets under management
   •   The number and type of Client accounts
   •   Anticipated or requested frequency of Client interactions
   •   Client’s historical investment activities
   •   The requested amount of our involvement/communications with other Client
       service providers (i.e., accountants, CPAs, etc.).

Our annual compensation is due and payable monthly in arrears on the first business day
of each calendar month. Our compensation is assessed based on the total market value
of all assets held in Client account(s) as of the close of business on the last business day
of the prior calendar month. We calculate the amount of our compensation each month
in good faith from asset balances reflected on the Client’s monthly account statement

provided by the third-party custodian, and we fully disclose this amount to Clients as part
of their monthly account statements. Our monthly calculation formula is:

       (Ending month account(s) value x Fee %) / 12 = Wealth Management Fee

Investment management fees will be deducted from the Client’s account by the custodian
as soon as practicable following the end of each applicable period. If requested by the
Client, the Firm may, in its sole discretion, invoice Client directly for fees as opposed to
debiting Client’s account. In such cases, invoices are due and payable upon receipt. Any
additional money and/or securities deposited or withdrawn by the Client are subject to the
same billing procedures as outlined above. Please note that we do not pro-rate fees.

You will be notified by us in writing should there be any changes to the compensation
schedule for your account(s). Your original compensation schedule will remain in effect
for thirty (30) days after you have received our written notification of any changes. The
new compensation schedule will automatically go into effect thirty (30) days after you
have been notified by us in writing, unless you inform us otherwise.

At times, the Firm will utilize margin in Client accounts (please refer to Item 8 below for
detailed information regarding the risks surrounding margin). When utilizing margin
strategies as part of a Client’s portfolio account, the Firm uses the “net value” of the
Client’s margin account assets for determining fees.

Unless instructed otherwise, each Client account managed by the Firm will be billed
individually for its respective share of fees owed. However, the Firm will at times bill Client
accounts disproportionately for fees should such actions be necessary due to insufficient
funds in any respective Client account, or if doing so is deemed by the Firm to be in the
best interest of Client.

B. Pension Consulting Fees
The Firm’s Pension Consulting fees are calculated and assessed quarterly, in arrears.
These fees are typically calculated by the plan’s record-keeper or other third-party service
provider, who then issues payment to us directly from the Client’s account as soon as
practicable following the last business day of the previous calendar quarter. If requested
by the Client, the Firm may, in its sole discretion, invoice Client directly for fees as
opposed to debiting Client’s Account. In such cases, invoices are due and payable upon
receipt.

Should a Client begin or terminate receiving Pension Consulting Services during a
quarter, the Firm’s fee will be prorated based on the number of days the account was
open during the quarter.

Fees are negotiable and arrangements with any particular Client can differ from those
described above. Negotiated fees will be captured in and agreed upon by the Client as
part of the Client’s Agreement. Although the Firm believes its Pension Consulting fees

are competitive, Clients should be aware that lower fees for comparable services may be
available from other sources.

C. Financial Planning Fees
For Clients who pay an annual advisory fee for our Discretionary Wealth & Portfolio
Management Services (Item 5-A) , we do not assess any independent fees for the
performance of our financial planning services. However, the scope and nature of
financial planning services are a factor used to determine the overall Wealth Management
Fee assessed Clients should the Client choose to engage the Firm for ongoing advisory
services.

At our discretion, we may also offer financial planning services independent of our
...

Item 7 – Types of Clients

A. Description
We provide active and on-going Wealth Management solutions for a wide range of
Clients including:

   •   Individuals
   •   High Net Worth Individuals
   •   Families
   •   Corporations
   •   Trusts
   •   Pension Plans
   •   Retirement Plans
   •   Foundations
   •   401-k Plans

B. Conditions for Managing Accounts
The Firm generally does not require a minimum initial investment to open an account.
However, the Firm reserves the right to accept or decline a potential Client for any reason
in its sole discretion. Prior to engaging the Firm to provide any of the investment advisory
services described in this Brochure, the Client will be required to enter into one or more
written Agreements with the Firm setting forth the terms and conditions under which the
Firm shall render its services.

There are times when certain restrictions are placed by a Client, which prevents us from
accepting or continuing to manage the account. We reserve the right to not accept and/or
terminate management of a Client’s account if we determine that the Client’s imposed
restrictions would limit or prevent us from meeting and/or maintaining our overall
investment strategy for the Client.

If a Client’s account is a pension or other employee benefit plan governed by the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Firm is
typically deemed a fiduciary to the plan. In providing investment management services,
the sole standard of care imposed upon the Firm is to act with the care, skill, prudence
and diligence under the circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims. The Firm will provide certain required disclosures to the
“responsible plan fiduciary” (as such term is defined in ERISA) in accordance with Section

408(b)(2), regarding the services the Firm provides and the direct and indirect
compensation the Firm receives by such Clients. Generally, these disclosures are
contained in this Form ADV Part 2A, the Client agreement and/or in separate ERISA
disclosure documents, and are designed to enable the ERISA plan’s fiduciary to: (1)
determine the reasonableness of all compensation received by the Firm; (2) identify any
potential conflicts of interests; and (3) satisfy reporting and disclosure requirements to
plan participants.