Long Island Wealth Management Inc

Item 5 – Fees and Compensation
Investment Management
Fees are paid quarterly in arrears according to the below fee schedule based on the average of the beginning
and ending quarterly balance.

                                Assets Under Management               Annual Rate
                                      Under $1 Million               0.65% to 1.00%
                                    $1 Million and Above             0.25% to 0.75%

   •   Fees are negotiated at the sole discretion of the advisor based on the scope, complexity, amount of time
       and expertise required to manage the account.

   •   Clients will receive quarterly statements from the Custodian that provides details of the advisory fees.

   •   The investment advisory fee in the first period of service is pro-rated from the inception date of the
       account[s] to the end of the first quarter.

   •   The firm will not have the authority or responsibility to value portfolio securities.

Mutual Fund Share Class Disclosures
Section 206 of the Investment Advisers Act of 1940 (“Advisers Act”) imposes a fiduciary duty to act in a
client’s best interests and specifically prohibits investment advisers, directly or indirectly, from engaging in any
transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective
client.

However, the fiduciary duty to which advisers are subject is not specifically defined in the Advisers Act or the
Commission rules but reflects a Congressional recognition “of the delicate fiduciary nature of an investment
advisory relationship” as well as a Congressional intent to eliminate, or at least expose, all conflicts of interest
which might incline an investment adviser, consciously or unconsciously, to render advice which was not
disinterested.

The purpose of 12b-1 fees, as approved by the SEC, are to cover marketing expenses and shareholder services
such as the support services. The more beneficial share class depends on an analysis of all fees including ticket
charges and expected 12b-1 fees. Investing in a 12b-1 fee paying share class can be less expensive for a client
than investing in a share class with a lower expense ratio if the ticket charges on the lower-cost share class
exceed the amount of ongoing 12b-1 fees.

 Disclosure Document

Depending on the anticipated trading volume, and the asset management fee that is determined based on
account size, complexity and time requirements, investment advisor representatives have a fiduciary duty to
determine the mutual fund share class that is in the best interest of each client as part of the overall fee analysis.
For a wrap fee account, a different conflict of interest is introduced because the advisor now has an incentive to
not trade as frequently (reverse churning) to avoid the ticket charges which can compromise the active
management of an advisory account. This conflict is mitigated by an investment adviser representative’s
fiduciary duty to act in a client’s best interest while also considering the higher asset management fee charged
for wrap fee accounts.

Advisor will seek to determine the most advantageous share class available to each client. While institutional
share classes are usually the lowest cost alternative, under certain circumstances clients may be better served to
pay a higher annual expense ratio and avoid a transaction fee on each trade. When selecting a mutual fund for a
client’s advisory account, the Investment Advisor Representative has a fiduciary duty to select the share class
that helps manage the overall fee structure of the account. The overall fee structure includes such fees as: Asset
Management Fees, Expense ratio, which includes 12b-1 fees, generally .25% for A shares and/or trade ticket
charges.

   •   Investment Advisor Representatives must anticipate and monitor trading volume, and the asset
       management fee that is determined based on account size, complexity and time requirements.

   •   Advisor will review mutual fund positions that clients transfer “in kind” to be included in assets
       managed by Advisor and will advise the client as to alternatives available to them regarding share
       classes.

   •   Advisor recognizes that in some situations, alternative share classes might not be available. For
       example, 529 and 401(k) Plans often have a limited array of investments and share classes available.

Legacy Mutual Fund Holdings
When the client transfers assets into a managed account, the portfolio advisor will review the client’s mutual
fund holdings. If not one of Advisor’s recommended funds, the mutual fund will generally be sold unless the
client needs to avoid a taxable gain or directs the Company to hold the position. In some circumstances, if the
legacy holding fits into the asset allocation of the portfolio, it may be held going forward.

When legacy holdings are maintained in a client’s account, the client’s primary advisor or the Head Trader (or
his designee) is responsible for conducting an initial analysis of the mutual fund share class that he or she
believes is in the client’s best interest to hold based on the account size, investment strategy and eligibility
requirements.

If in the client’s best interest to convert to an alternative share class and the position meets the minimum
investment and eligibility criteria, Advisor will place instructions for the custodian to convert the position on its
next available share class conversion date. If not converted, the position will be re-evaluated during the next

 Disclosure Document

account review. All steps taken will be documented either in the client’s file or in the trading records of the
firm.

Portfolio Makeover $500 project fee
   • A review and analysis of your existing portfolio and asset allocation with
       written recommendations.

   •   Consideration of ways to lower your current investment expenses and ensure that your portfolio
...

Item 7 – Types of Clients
Advisory services are primarily offered to individuals, individual retirement accounts, high net worth clients,
trusts, estates and charitable organizations.