Perennial Advisors Group LLC

Item 5: Fees and Compensation

Fees for Advisory Services
We base our fees on a percentage of assets under management and various fixed fees, which
are described below.

Compensation – Wealth Management Services
For Wealth Management services, clients are assigned varying fee schedules under one of the
following fee structures: a percentage of assets under management using a tiered, graduated
fee schedule, a flat percentage-based fee, or a flat annual fee. As a result, some clients may pay
a fee that is higher or lower than other clients

Some legacy clients are charged a flat Wealth Management fee ranging up to $35,000 annually.

Some clients are charged a percentage of assets under management, up to 1.50%.
Fees are billed on a quarterly basis, in arrears, based upon the market value of the accounts,
including cash, on the last day of the previous quarter as valued by the Custodian.

Compensation – Financial Planning Services
We typically offer financial planning services as part of our Wealth Management Services,
however, should the client engage us for stand-alone financial planning services, we charge a
fixed fee of $5,000. Financial planning fees are invoiced by us upon completion of the agreed
upon deliverable[s] and are due upon receipt of our invoice.

Calculation and Payment
The specific manner in which we charge fees is established in a client’s written agreement with
us. Clients may elect to be invoiced directly for fees or to authorize us to directly debit fees
from client accounts.

Other Fees
There are no additional types of fees or expenses that our clients pay in connection with the
delivery of advisory services.

Agreement Terms
Either party may terminate an agreement at any time by notifying the other in writing. If the
client made an advance payment, we would refund any unearned portion of the advance
payment. If the client made a payment in arrears, we would collect any earned yet unpaid fees.

Investment Management Services
We are compensated for investment management services at the end of the quarter after
services are rendered. Either party may terminate the investment advisory agreement, at any
time, by providing advance written notice to the other party.

Financial Planning Services
We are compensated for financial planning services upon completion of the engagement
deliverable[s]. Either party may terminate the financial planning agreement, at any time, by
providing advance written notice to the other party. The client may also terminate the financial
planning agreement within five (5) business days of signing the agreement at no cost. After the
five-day period, the client will incur charges for bona fide advisory services rendered to the
point of termination and such fees will be due and payable by the client.

Cash Balances
Some of your assets may be held as cash and remain uninvested. Holding a portion of your
assets in cash and cash alternatives, i.e., money market fund shares, may be based on your
desire to have an allocation to cash as an asset class, to support a phased market entrance
strategy, to facilitate transaction execution, to have available funds for withdrawal needs or to
pay fees or to provide for asset protection during periods of volatile market conditions. Your
cash and cash equivalents will be subject to our investment advisory fees unless otherwise
agreed upon. You may experience negative performance on the cash portion of your portfolio if
the investment advisory fees charged are higher than the returns you receive from your cash.

Retirement Plan Rollover Recommendations
As part of our investment advisory services to our clients, we may recommend that clients roll
assets from their employer’s retirement plan, such as a 401(k), 457, or ERISA 403(b) account
(collectively, a “Plan Account”), to an individual retirement account, such as a SIMPLE IRA, SEP
IRA, Traditional IRA, or Roth IRA (collectively, an “IRA Account”) that we will advise on the
client’s behalf. We may also recommend rollovers from IRA Accounts to Plan Accounts, from
Plan Accounts to Plan Accounts, and from IRA Accounts to IRA Accounts.

If the client elects to roll the assets to an IRA that is subject to our advisement, we will charge
the client an asset-based fee as set forth in the advisory agreement the client executed with our
firm. This creates a conflict of interest because it creates a financial incentive for our firm to
recommend the rollover to the client (i.e., receipt of additional fee-based compensation).
Clients are under no obligation, contractually or otherwise, to complete the rollover. Moreover,
if clients do complete the rollover, clients are under no obligation to have the assets in an IRA
advised on by our firm. Due to the foregoing conflict of interest, when we make rollover
recommendations, we operate under a special rule that requires us to act in our clients’ best
interests and not put our interests ahead of our clients’.

Under this special rule’s provisions, we must:

   •   meet a professional standard of care when making investment recommendations (give
       prudent advice);
   •   never put our financial interests ahead of our clients’ when making recommendations
       (give loyal advice);
   •   avoid misleading statements about conflicts of interest, fees, and investments;
   •   follow policies and procedures designed to ensure that we give advice that is in our

        clients’ best interests;
   •    charge no more than a reasonable fee for our services; and
   •    give clients basic information about conflicts of interest.

Many employers permit former employees to keep their retirement assets in their company
plan. Also, current employees can sometimes move assets out of their company plan before
they retire or change jobs. In determining whether to complete the rollover to an IRA, and to
the extent the following options are available, clients should consider the costs and benefits of
...

Types of Clients
We provide services to individuals, high net worth individuals, trusts, estates and charitable
organizations.

Account Minimums
We require a minimum account under certain circumstances of $500,000 for investment
advisory clients, although this may be reduced at our sole discretion.