Reyes Financial Architecture Inc

ITEM 5: FEES AND COMPENSATION

Asset Management Fees
RFA bases its fees on a percentage of assets under management. The specific fees charged by RFA for
its investment management services will be set forth in the client’s Investment Advisory Agreement.
As indicated in Item 4 above, complimentary financial planning services are included as part of RFA’s
asset management services.

RFA generally charges a quarterly asset management fee based on the account’s assets under
management (“AUM”) based on the following annual percentages:

                Assets Under Management                        Annual Advisory Fee
               Below $500,000                                           2.45%
               $500,001 to $1,500,000                                   1.95%
               $1,500,001 to $2,500,000                                 1.75%
               Over $2,500,001                                          1.50%

Fees will be billed in advance based upon a percentage of the Client’s assets under management
(including any cash and cash equivalents) as of the close of business on the last business day of the
preceding calendar quarter. Quarterly fees are calculated the last business day of March, June,
September and December. Accounts opened within a given quarter are charged a pro rata share at the
end of the current quarter. In the event RFA’s services are terminated any pre-paid, unearned fees will
be promptly refunded to the Client. The number of days the Account was managed during the quarter
until termination is used to determine the percentage of the management fee earned (based on the total
number of days in the quarter) and the balance is refunded.

In computing the market value of any investment of the Account, each security listed on any national
securities exchange or otherwise subject to current last-sale reporting shall be valued at the last sale
price on the valuation date. Such securities which are not traded nor subject to last- sale reporting shall
be valued at the latest available bid price reflected by quotations furnished to RFA by such sources as
it deems appropriate. Any other security shall be valued in such a manner as shall be determined in
good faith by RFA to reflect its fair market value.

Lower fees for comparable services are potentially available from other sources. Under certain
circumstances, and at the sole discretion of RFA, fees can be negotiated by RFA.

For purposes of fee calculation, RFA aggregates all a client’s accounts managed by the Firm, along
with those belonging to certain family members living in the same household as the client. These
family members include a spouse or partner and dependent children. This is generally referred to as

“householding”. Thus, when a household’s account assets are aggregated, this could make such
accounts eligible for a lower annual advisory fee (i.e., a breakpoint) based on RFA’s tiered fee
schedule. Additional related accounts will be considered for inclusion, if requested by a client.

Fees do not include custodial fees or transaction fees. As outlined in our client agreement, our
advisory fees are deducted from the client account by the custodian and paid to RFA. All deductions
of advisory fees will be reflected on the custodian account statement provided to clients by the
custodian.

Other Fees and Expenses
Clients should understand that the different fees discussed above are specific to what RFA charges
and do not include certain charges imposed by third parties such as custodial fees, and mutual fund
fees and expenses. Client assets are also subject to, as applicable, transaction fees, brokerage fees and
commissions, retirement plan administration fees, mutual fund deferred sales charges, odd-lot
differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on
brokerage accounts and securities transactions.

For investment in mutual funds and exchange trade funds (“ETFs”), Clients will be charged internal
management fees, distribution fees and other expenses, which are described in each funds’ prospectus.
These fees are referred to as a fund’s “expense ratio” and are deducted at the mutual fund level when
calculating the fund’s net asset value (“NAV”). The deduction of these fees has a direct bearing on the
fund’s performance. If a mutual fund also pays sales charges (commonly referred to as sales loads), a
client would pay initial or deferred sales or surrender/redemption charges. In addition, certain open-
end mutual funds offer different share classes of the same fund, and one share-class can have an
expense ratio and sales/redemption fees that are higher than another share class. The most economical
share class will depend on certain factors, including but not limited to the amount of time the shares
are held by a client and the amount a client will be investing. Mutual fund expense ratios and
sales/redemption fees vary by mutual fund, so it is important to read the mutual fund prospectus to
fully understand all the fees charged.

Transaction costs also factor into the overall costs when investing in mutual funds. Such costs can be
charged by the broker-dealer for both purchases and redemptions. Some custodians offer certain
higher share class mutual funds for purchase at no transaction cost. Therefore, at times RFA will
purchase a more expensive share class when the firm determines, based on facts and circumstances
that such transaction would be the most economical for a client. RFA also will transfer a client into a
lower cost share class at a later date if the firm determines it is beneficial for the client and that share
class is available. For any new clients that hold mutual funds upon account opening, RFA usually
determines whether such mutual fund remains suitable for the client’s current objective and if
believed that it is, the Firm will check to see if a lower cost share class is available and then transfer
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ITEM 7: TYPES OF CLIENTS

Description
RFA generally offers investment advice to high-net-worth individuals, pension and profit- sharing
plans, trust, estates, corporations, or business entities.

Conditions for Managing Accounts
RFA typically requires a minimum of $1,000,000 to open an account. Under certain circumstances,
RFA will negotiate this minimum at its discretion. The Firm reserves the right to accept or decline a
potential client for any reason in its sole discretion. Prior to engaging the Firm to provide any of the
investment advisory services described in this Brochure, the client will be required to enter into one
or more written agreements with the Firm setting forth the terms and conditions under which the Firm
shall render its services.

There are times when certain restrictions are placed by a client, which prevents RFA from accepting or
continuing to manage the account. RFA reserves the right to not accept and/or terminate management of
a client’s account if it feels that the client-imposed restrictions which would limit or prevent it from
meeting and/or maintaining its overall investment strategy.

When RFA provides investment advice to a client, we are deemed a fiduciary under certain federal
regulations. As a fiduciary, RFA and its supervised persons are required to always act in our clients’

best interests, which means we must, at a minimum take the following steps:

    •   Meet a professional standard of loyalty and care when making investment
        recommendations.
    •   Always put our clients’ interests ahead of our own when making recommendations and
        providing services.
    •   Disclose conflicts of interest and how the Firm addresses such conflicts.
    •   Adopt and follow policies and procedures designed to ensure that we give advice and
        provide services that remain in each client’s best interest.
    •   Charge an advisory fee that is reasonable for our services.
    •   Not provide, or withhold, any information that could render our advice and/or
        services misleading.