North Bay Wealth Management

Fees and Compensation

The following types of fees will be assessed:

Asset Management – Fees are charged quarterly in advance and are based primarily on asset size
and the level of complexity of the services provided. In individual cases, NBWM has the sole
discretion to negotiate fees that are lower than the standard fee shown or to waive fees. Fees are
not based on the share of capital gains or capital appreciation of the funds or any portion of the
funds. Comparable services for lower fees may be available from other sources. Fees for the
initial quarter will be prorated based upon the number of calendar days in the calendar quarter that
the advisory agreement is in effect. Fees are based on the market value of the assets on the last
business day of the previous quarter. Annual fees range from .80% - 1.25%, depending on the
amount of assets under management (“AUM”) – See chart below. Consulting services are included
in these fees for asset management services.

Fee Schedule for Asset Management:

   Total Account Value                                 Maximum Annual Advisory Fee

 First $2,000,000                                                   1.25%

 Next $4,000,000                                                    1.00%

 Next $4,000,000                                                    0.90%

 Over $10,000,000                                                   0.80%

As authorized in the client agreement, the account custodian withdraws North Bay Wealth
Management’s advisory fees directly from the clients’ accounts according to the custodian’s
policies, practices, and procedures. The custodial statement includes the amount of any fees paid
to NBWM for advisory services. You should carefully review the statement from your
custodian/broker-dealer’s statement and verify the calculation of fees. Your custodian/broker-
dealer does not verify the accuracy of fee calculations.

Fees are charged in advance on a quarterly basis, meaning that advisory fees for a quarter are
charged on the first day of the quarter. Clients may terminate investment advisory services
obtained from NBWM, without penalty, upon written notice within five (5) business days after
entering into the advisory agreement with NBWM. The client is responsible for any fees and
charges incurred by the client from third parties as a result of maintaining the account such as
transaction fees for any securities transactions executed and account maintenance or custodial fees.
Thereafter, the client may terminate advisory services upon written notice delivered to and
received by NBWM. Clients who terminate investment advisory services during a quarter are
charged a prorated advisory fee based on the date of NBWM’s receipt of client’s written notice to
terminate. Any earned but unpaid fees are immediately due and payable, and any prepaid and

unearned fees will be immediately refunded. All funds under management shall be liquidated or
transferred at market value as of the date of liquidation or transfer.

Additional Fees and Expenses

In addition to advisory fees paid to NBWM as explained above, clients may pay custodial service,
account maintenance, transaction, and other fees associated with maintaining the account. These
fees vary by broker and/or custodian. Clients should ask NBWM for details on transaction fees or
other custodial fees specific to their account, as these fees are not included in the annual advisory
fee. NBWM does not share any portion of such fees. Additionally, for any mutual funds
purchased, the client may pay their proportionate share of the funds’ distribution, internal
management, investment advisory and administrative fees. Such fees are not shared with NBWM
and are compensation to the fund manager. Clients are urged to read the mutual fund prospectus
prior to investing.

Mutual fund companies impose internal fees and expenses on clients. These fees are in addition
to the costs associated with the investment advisory services as described above. Complete details
of such internal expenses are specified and disclosed in each mutual fund company’s prospectus.
Clients are strongly advised to review the prospectus(es) prior to investing in such securities.

Mutual funds purchased or sold in broker-dealer accounts may generate transaction fees that would
not exist if the purchase or sale were made directly with the mutual fund company. Mutual funds
held in broker-dealer accounts also charge management fees. These mutual fund management fees
may be more or less than the mutual fund management fees charged if the client held the mutual
fund directly with the mutual fund company.
Clients may purchase shares of mutual funds directly from the mutual fund issuer, its principal
underwriter, or a distributor without purchasing the services of NBWM or paying the advisory fee
on such shares (but subject to any applicable sales charges). Certain mutual funds are offered to
the public without a sales charge. In the case of mutual funds offered with a sales charge, the
prevailing sales charge (as described in the mutual fund prospectus) may be more or less than the
applicable advisory fee. However, clients would not receive NBWM’s assistance in developing
an investment strategy, selecting securities, monitoring performance of the account, and making
changes as necessary.

Please refer to Item 12 “Brokerage Practices” of this brochure for additional information.

Form ADV, Part 2A, Item 6

          Performance-Based Fees and Side-By-Side Management

North Bay Wealth Management does not charge performance-based fees or participate in side-by-
side management. Side-by-side management refers to the practice of managing accounts that are
charged performance-based fees while at the same time managing accounts that are not charged
performance-based fees. Performance-based fees are fees that are based on a share of capital gains
or appreciation of the assets of a client. Our fees are calculated as described in Fees and
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Types of Clients

NBWM offers investment advisory services to individuals and high net worth individuals Pension
and profit sharing plans (other than plan participants), Charitable organizations, and Corporations
or other businesses not listed above. There is a minimum account size of $1,000,000 to open and
maintain an advisory account but account size is up to the discretion of the firm.

Form ADV, Part 2A, Item 8

       Methods of Analysis, Investment Strategies, and Risk of Loss

NBWM’s methods of analysis and investment strategies incorporate the client’s needs and
investment objectives, time horizon, and risk tolerance. NBWM is not bound to a specific
investment strategy for the management of investment portfolios but rather consider the risk
tolerance levels pre-determined at the account opening, as well as on an on-going basis. Examples
of methodologies that our investment strategies may incorporate include:

Asset Allocation – Asset Allocation is a broad term used to define the process of selecting a mix
of asset classes and the efficient allocation of capital to those assets by matching rates of return to
a specified and quantifiable tolerance for risk.

Dollar-Cost Averaging – Dollar-cost averaging is the technique of buying a fixed dollar amount
of securities at regularly scheduled intervals, regardless of the price per share. This will gradually,
over time, decrease the average share price of the security. Dollar-cost averaging lessens the risk
of investing a large amount in a single investment at the wrong time.

Technical Analysis – involves studying past price patterns and trends in the financial markets to
predict the direction of both the overall market and specific stocks.

Long-Term Purchases – securities purchased with the expectation that the value of those securities
will grow over a relatively long period of time, generally greater than one year.

Short-Term Purchases – securities purchased with the expectation that they will be sold within a
relatively short period of time, generally less than one year, to take advantage of the securities’
short term price fluctuations.

Our strategies and investments may have unique and significant tax implications. Regardless of
your account size or other factors, we strongly recommend that you continuously consult with a
tax professional prior to and throughout the investing of your assets.

Investing in securities involves risk of loss that clients should be prepared to bear. Although we
manage your portfolio with strategies and in a manner consistent with your risk tolerances, there
can be no guarantee that our efforts will be successful. You should be prepared to bear the risk of
loss.

All investments involve the risk of loss, including (among other things) loss of principal, a
reduction in earnings (including interest, dividends, and other distributions), and the loss of future
earnings. These risks include market risk, interest rate risk, issuer risk, and general economic risk.
Regardless of the methods of analysis or strategies suggested for your particular investment goals,
you should carefully consider these risks, as they all bear risks.

NBWM’s primary goal for investing is to help the client maintain purchasing power over the long
term. This may result in short term variability and loss of principal. Time horizon and risk
tolerance are key determinates of the proper asset allocation. NBWM’s approach focuses on taking
appropriate risks for which clients are compensated (i.e. market risk) and seeking to limit or
eliminate risks that do not provide compensation over the long term (i.e. individual stock risk or
lack of portfolio risk).

Below are some more specific risks of investing:

Market Risk. The prices of securities in which clients invest may decline in response to certain
events taking place around the world, including those directly involving the companies whose
securities are owned by the client or an underlying fund; conditions affecting the general economy;
overall market changes; local, regional or global political, social or economic instability; and
currency, interest rate and commodity price fluctuations. Investors should have a long-term
perspective and be able to tolerate potentially sharp declines in market value.

Management Risk. NBWM’s investment approach may fail to produce the intended results. If
our perception of the performance of a specific asset class or underlying fund is not realized in the
expected time frame, the overall performance of client’s portfolio may suffer.

Equity Risk. Equity securities tend to be more volatile than other investment choices. The value
of an individual mutual fund or ETF can be more volatile than the market as a whole. This volatility
affects the value of the client’s overall portfolio. Small- and mid-cap companies are subject to
additional risks. Smaller companies may experience greater volatility, higher failure rates, more
limited markets, product lines, financial resources, and less management experience than larger
companies. Smaller companies may also have a lower trading volume, which may
disproportionately affect their market price, tending to make them fall more in response to selling
pressure than is the case with larger companies.

Fixed Income Risk. The issuer of a fixed income security may not be able to make interest and
principal payments when due. Generally, the lower the credit rating of a security, the greater the
risk that the issuer will default on its obligation. If a rating agency gives a debt security a lower
rating, the value of the debt security will decline because investors will demand a higher rate of
return. As nominal interest rates rise, the value of fixed income securities is likely to decrease. A
nominal interest rate is the sum of a real interest rate and an expected inflation rate.

Municipal Securities Risk. The value of municipal obligations can fluctuate over time, and may
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