Paradigm Investment Advisory LLC

Item 5 – Fees and Compensation

A. Fees for Advisory Services

The Firm charges a monthly or quarterly annual advisory fee that is agreed upon with each client
and set forth in an agreement executed by the Firm and the client. The Firm’s annual advisory fee
is generally based on a percentage of the client’s assets under management or advisement with the
Firm. The Firm’s fee for investment advisory services is negotiable and varies based on several
factors, including, but not limited to, the size of the client relationship, the type, nature and
complexity of the investment strategies, products and investments utilized, service intensity,
degree of custom work, number of entities, number of family members served and travel
requirements.

If based on a percentage of assets under management or advisement, the advisory fee for the initial
quarter is payable on a pro rata basis, in arrears, based on the period ending value of the net
billable assets under management provided to the Firm by third-party sources such as pricing
services, custodians, fund managers and administrators, and client-provided sources. For
subsequent quarters, the management fee is generally payable in advance based on the average
daily value of the client’s account(s) on the last day of the previous quarter provided to the Firm
by third-party sources such as pricing services, custodians, fund managers and administrators, and
client-provided sources.

Clients have five (5) business days from the date of execution of the client agreement to terminate
the Firm’s services. The investment advisory agreement between the Firm and the client may be
terminated at will by either the Firm or the client upon written notice. The Firm does not impose
termination fees when the client terminates the investment advisory relationship, except when
agreed upon in advance. In the event the investment advisory agreement is terminated, the fee for
the final billing period is prorated through the effective date of the termination and the outstanding
or unearned portion of the fee is charged or refunded to the client, as appropriate.

Fees for Financial Planning and Consulting Services

Paradigm offers stand-alone financial planning services on an hourly or fixed fee basis. Hourly
fees are at a rate of up to $350. Fixed fees are negotiated based on the expected number of hours
to complete the engagement at the Advisor’s hourly rate. Fees may be negotiable at the sole
discretion of the Advisor, depending on the nature and complexity of services to be provided. Fees
may also be included in an overall investment management relationship. An estimate for total
hours and/or costs will be determined prior to establishing the advisory relationship.

Fees for Retirement Plan Advisory Services

The Fees for Retirement Plan Advisory services are negotiable and can either be calculated based
on a percentage of the assets under management in the same manner as Advisory Services or

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Paradigm Investment Advisory, LLC                                               Disclosure Brochure

under a flat or fixed fee arrangement. Flat/fixed fees are negotiable but generally range from
$10,000 to $250,000 on an annual basis, depending upon the level and scope of the services
required. Retirement Plan Advisory fees are generally charged quarterly in advance, calculated
on a per diem basis, upon the signing of an Agreement by the Client. Certain Retirement Plan
Advisory Clients can also be charged monthly in advance rather than quarterly. Fees for Clients
engaging Adviser mid-quarter (or mid-month if paid monthly) will be prorated on a per diem
basis.

Occasionally advisory services will be quoted on an hourly or per diem basis.

B. Payment of Fees

The Firm generally requires clients to have the Firm’s annual advisory fee deducted from the
client’s account(s) held at the client’s custodian. Upon engaging the Firm to manage such
account(s), a client grants the Firm this limited authority through a written instruction to the
custodian of his/her account(s). The client is responsible for verifying the accuracy of the
calculation of the advisory fee; the custodian will not determine whether the fee is accurate or
properly calculated.

The custodian of the client’s accounts provides each client with a statement, at least quarterly,
indicating separate line items for all amounts disbursed from the client’s account(s), including any
fees paid directly to the Firm.

The Firm reserves the right to liquidate transferred securities or decline to accept particular
securities into a client’s account. Clients may withdraw account assets at any time on notice to the
Firm, subject to the usual and customary securities settlement procedures. However, the Firm
generally designs its portfolios as long-term investments and the withdrawal of assets may impair
the achievement of a client’s investment objectives. The Firm may consult with its clients about
the options and implications of transferring securities. Clients are advised that when transferred
securities are liquidated, they may be subject to transaction fees, short-term redemption fees, fees
assessed at the mutual fund level (e.g. contingent deferred sales charges) and/or tax ramifications.

Financial planning fees are invoiced up to fifty percent (50%) upon execution of the financial
planning agreement with the balance due upon completion of the engagement deliverables.
The Advisor may invoice the Client for financial planning fees or arrange for the deduction of
planning fees from the Client’s account[s] at the Custodian.

C. Clients Responsible for Fees Charged by Financial Institutions

In connection with the Firm’s management of client assets, a client will incur fees and/or expenses
separate from the Firm’s annual advisory fee. These additional fees and charges may include
transaction charges and the fees/expenses charged by any custodian, broker-dealer, subadvisor,
...

Item 7 – Types of Clients
Paradigm offers investment advisory services to individuals, high net worth individuals, families,
trusts, estates, charitable organizations and businesses. The amount of each type of Client is
available on the Advisor's Form ADV Part 1A. These amounts may change over time and are
updated at least annually by the Advisor. Paradigm generally does not impose a minimum size for
establishing a relationship. However, smaller accounts may be subject to different investment
selection and strategies.