Kovack Advisors Inc

ITEM 5: FEES AND COMPENSATION

ASSET MANAGEMENT FEES
KAI charges an annual fee based on a percentage of the market value of the assets being managed. The maximum annual fee will be
2.90% of the assets being managed by KAI and/or by a recommended TAMP. Fees may be calculated based on a flat percentage of the
assets, a tiered schedule, or other break points, as agreed upon and set forth in the client agreement. TAMPs debit the advisory fee as
agreed upon between the Client and the TAMP. The TAMP will share a portion of the fee with KAI. KAI does not determine the value of
Clients' assets being managed. The account fee will be determined by the account balance as published by the relevant account
custodian(s) and/or as listed on a national securities exchange or NASDAQ at the closing price, on the valuation date, on the principal
market where the securities are traded. KAI will rely on the valuation by an independent third party for non-listed securities or where a
published valuation is not readily available. Interest on any margin debt incurred by the Client is in addition to the account fee.

Asset management fees are negotiable depending on factors such as the amount, type, and complexity of the asset management services
provided, the nature and complexity of the assets being managed, the complexity of your financial circumstances, as well as the level of
administration requested either directly or assumed by the Client, among others. Assets in each of your account(s) are included in the fee
assessment unless specifically identified in writing for exclusion. Since this fee is negotiable, the exact fee paid by you will be clearly stated
in the management agreement signed by you and us.

Asset management fees are billed quarterly or monthly in advance and are based on the value of your portfolio at the end of the prior
billing cycle. Terms of payment are stated in the management agreement signed by you and us. If you provide written authorization to us,
the advisory fee will be deducted from your account held with a non-affiliated, qualified custodian. The qualified custodian will provide you
with an account statement at least quarterly. This statement will detail all account activity, including the advisory fees deducted from your
account(s).

Additionally, where appropriate, fees may be prorated based on deposits or withdrawals during a billing cycle and, likewise, where
appropriate, may be prorated or subject to refunds if any fees are paid in advance, based on the date of termination. The period for which
the initial payment shall be due will run from the opening date through the last business day of the next full billing cycle and will be prorated
accordingly. Thereafter, the fee will be based on the full billing cycle as specified in the account opening documents.

Our annual fee is exclusive of, and in addition to, brokerage commissions, transaction fees, custodial fees, postage fees, and other
transactional and account-related costs and expenses. You are responsible for brokerage costs incurred unless we agree to bill only on
the amount of the assets, whereby we cover any transaction costs, or your IAR negotiates with you to cover the ticket charges (Transaction
Fees) in your account charged by the clearing firm. This presents a conflict of interest since your KAI IAR may have an incentive to trade
your account less frequently to avoid incurring the transaction costs or to use a broker-dealer or custodian that charges lower transaction
fees, although a more favorable transaction might be available through another broker-dealer or custodian. In recognition of the ticket
charges or Asset-Based Pricing a client’s Investment Adviser Representative may incur on a client’s behalf, the client may pay a higher
negotiated annual Advisory Fee. This Advisory Fee may be higher than fees that could be obtained at other investment advisers. Clients

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FORM ADV PART 2A BROCHURE
with less actively traded accounts may, therefore, benefit from paying the Advisory Fees, costs, and expenses themselves and paying a
lower overall negotiated annual Advisory Fee.

As described in the Item 13 Account Reviews section below, KAI conducts periodic supervisory reviews of advisory accounts for
consistency with its fiduciary duty obligations and best execution.

The investment management agreement between you and KAI will continue in effect until either party terminates the management
agreement upon written notice in accordance with the terms of the investment management agreement. KAI’s annual fee will be prorated
through the date of termination. Any prepaid, unearned fees will be promptly refunded to the Client.

In some cases, KAI may provide research and/or monitoring of certain assets without providing any active management of such assets. In
such cases, such assets will be designated as “Unmanaged Advised Assets” and will not be charged any advisory fees. Such Unmanaged
Advised Assets will be designated in the management agreement.

Billing on Cash Positions
The firm treats cash and cash equivalents as an asset class. Accordingly, unless otherwise agreed in writing, all cash and cash equivalent
positions (e.g., money market funds, etc.) are included as part of assets under management for purposes of calculating the firm’s advisory
fee. At any specific point in time, depending upon perceived or anticipated market conditions/events (there is no guarantee that such
anticipated market conditions/events will occur), the firm may maintain cash and/or cash equivalent positions for defensive, liquidity, or
other purposes. While assets are maintained in cash or cash equivalents, such amounts could miss market advances and, depending
upon current yields, at any point in time, the firm’s advisory fee could exceed the interest paid by the client’s cash or cash equivalent
positions.

Billing on Margin
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ITEM 7: TYPES OF CLIENTS

KAI generally provides investment advice to the following types of Clients:

•   Individuals
•   High net worth individuals
•   Bank or thrift institutions
•   Pension and profit-sharing plans
•   Charitable organizations
•   Corporations or other businesses

KAI generally has account minimums, depending on the account option selected. Household accounts can be aggregated to meet
minimums, and the minimums can be waived. Minimums generally range from $10,000 to $100,000. TAMP, TPMM, and Independent
Advisor accounts may have different minimums. Please review the relevant third party’s disclosure documents and/or account agreements
provided for information regarding account minimums.