RJJ Pasadena Securities Inc

ITEM 5: FEES AND COMPENSATION
Investment Management Services

Individual Managed Account Management Fee

The Firm provides investment management services to clients for a fee based upon a percentage
of assets under management (including cash and cash equivalents) using an average daily
balance method, calculated, and assessed quarterly, in advance. In special circumstances, and in
our sole discretion, we may negotiate a lesser management fee based upon certain criteria (i.e.,
anticipated future earning capacity, dollar amount of assets to be managed, related accounts,
account composition, pre-existing client relationship, account retention, etc.). The average daily
balance for each account is determined by calculating the total dollar value for every calendar
day during the previous quarter. The fee for the upcoming period is then calculated by
multiplying the average daily balance of the account by the following annual percentages:

RJJ Pasadena Securities, Inc.
Form ADV Part 2A
                         Account Size                            Annual Fees
                         Up to $250,000                            2.50%
                         $250,001 to $500,000                      2.25%
                         $500,001 to $750,000                      2.00%
                         $750,001 to $1,000,000                    1.75%
                         $1,000,001 – and over                     1.50%

Should a client open their account mid-quarter, their fee will be prorated based on the number of
days the account is open during that quarter. In the event the Firm’s services are terminated mid-
quarter, 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.
Wrap Account Management Fee

The Firm’s Wrap Account Management Fees are billed and payable quarterly in advance based
on the value of your account on the last day of the previous quarter (Note: all transaction, trade
fees and custodial costs will be paid by the Firm.) The fee for the upcoming period is then
calculated by multiplying the value of your account on the last day of the previous quarter by the
following annual percentages:

                            Assets Under                   Annual Fee
                            Management (without
                            Options)
                            Up to $250,000                 2.50%
                            $250,001 to $500,000           2.25%
                            $500,001 to $750,000           2.00%
                            $750,001 to $1,000,000         1.75%
                            $1,000,001 – and over          1.50%

                            Assets Under                   Annual Fee
                            Management (with
                            Options)
                            Up to $500,000                 3.00%
                            $500,001 to $750,000           2.75%
                            $750,001 to $1,000,000         2.50%
                            $1,000,001 to $2,000,000       2.25%
                            $2,000,001 – and over          2.00%

Please refer to RJJ’s Form ADV 2A Appendix Wrap Fee Brochure for more details regarding our wrap fee
program.
Although we believe our Investment Management Fees are competitive, the client is hereby advised that
lower fees for comparable services may be available from other sources. As a client, you should be aware
that the fee charged by our firm may be higher (or lower) than those charged by others in the industry, and
that it may be possible to obtain the same or similar services from other firms at lower (or higher) rates.

RJJ Pasadena Securities, Inc.
Form ADV Part 2A
Clients should be aware that fees in excess of 2% per year for an advisory program are considered to be
high, and that other advisory firms may be able to provide similar services at lower costs.
Our annual portfolio management fee is billed and payable quarterly in advance based on the aggregate
value (market value or fair market value in the absence of market value) of the client’s account on the last
day of the previous quarter. Each client will receive no less than a quarterly statement from Schwab that
includes an accounting of all holdings and transactions in the account for the reporting period.

ITEM 7: TYPES OF CLIENTS
We offer investment advisory services to individuals, pension and profit-sharing plans, charitable
organizations, corporations, and other business entities. In general, we require a minimum of
$100,000 to open and maintain an advisory account. At our discretion, we can or will waive this
minimum account size. For example, we can waive the minimum if you appear to have
significant potential for increasing your assets under our management. We can also combine
account values for you and your minor children, joint accounts with your spouse, and other types
of related accounts to meet the stated minimum.