SFAM LLC

Item 5       Fees and Compensation

  A. SAWYER FALDUTO WRAP PROGRAM

     The current annual Program fee is negotiable but will not exceed 0.80% and is charged
     quarterly in arrears. The Program fee varies depending upon various objective and
     subjective factors. As a result, our clients could pay diverse fees based upon the type,
     amount and market value of their assets, the representative assigned to the account, the
     complexity of the engagement, the anticipated number of meetings and servicing needs,
     related accounts, future earning capacity, anticipated future additional assets, account
     composition, and negotiations with the client. As a result, similar clients could pay
     different fees, and higher fees will correspondingly impact a client’s net account
     performance. Moreover, the services provided by the Registrant to any particular client
     could be available from other advisers at a lower cost.

     The Registrant may charge a flat retainer fee for certain pension fund clients. Such fee
     is generally negotiable but will not exceed $1,000 per month.

  B. Clients may elect to have the Registrant’s advisory fees deducted from their custodial
     account. Both Registrant’s Investment Advisory Agreement and the custodial/ clearing
     agreement may authorize the custodian to debit the account for the Registrant’s

   investment management fee and to directly remit that fee to the Registrant in compliance
   with regulatory procedures. In the limited event that the Registrant bills the client
   directly, payment is due upon receipt of the Registrant’s invoice.

C. As discussed below, unless the client directs otherwise or an individual client’s
   circumstances require, the Registrant shall generally recommend that Schwab serve as
   the broker-dealer/custodian for client accounts. Broker-dealers such as Schwab charge
   brokerage commissions and/or transaction fees for effecting certain securities
   transactions (i.e., transaction fees are charged for certain no-load mutual funds,
   commissions are charged for individual equity and fixed income securities transactions),
   however, participants in the Program will not incur such costs, as they are generally
   included in the Program fee.

   Clients will remain responsible for the payment of mark-ups and mark-downs for fixed
   income transactions and other fees that are discussed in more detail in the Program
   brochure. In addition to Registrant’s investment fees, all mutual fund and exchange
   traded funds incur separate fees and expenses, which are borne by their shareholders.
   Clients will be indirectly responsible for the payment of these fees and expense, which
   include management fees.

   Tradeaway/Prime Broker Fees. Relative to its discretionary investment management
   services, individual fixed income transactions may be effected through broker-dealers
   other than the account custodian, in which event, the client generally will incur both the
   fee charged by the executing broker-dealer (commission, mark-up/mark-down) and a
   separate “tradeaway” or prime broker fee charged by the account custodian. However,
   the Registrant will pay the “tradeaway” or prime broker fee charged by the account
   custodian. This presents a conflict of interest as the Registrant has an incentive to
   purchase and sell securities through the account’s broker-dealer, even if better prices are
   available elsewhere. The Registrant maintains policies and procedures relating to “best
   execution” that seek to minimize this conflict of interest. In addition, the Registrant
   discloses this conflict of interest to clients so that they can make an informed decision
   about maintaining a relationship with the Registrant.

   Use of No Transaction Fee (“NTF”)
   The purchase or sale of transaction-fee (“TF”) funds available for investment through the
   Registrant will result in the assessment of transaction charges to your IAR or the
   Registrant. Although no-transaction-fee (“NTF”) funds do not assess transaction charges,
   most NTF funds have higher internal expenses than funds that do not participate in an
   NTF program. These higher internal fund expenses are assessed to investors who
   purchase or hold NTF funds. Depending upon the frequency of trading and hold periods,
   NTF funds may cost you more, or may cost the Registrant or your IAR less, than mutual
   funds that assess transaction charges but have lower internal expenses.

   In addition, the higher internal expenses charged to clients who hold NTF funds will
   adversely affect the long-term performance of their accounts when compared to share
   classes of the same fund that assess lower internal expenses. It is important to note that
   the Registrant will only purchase NTF funds when no other share class is available for
   purchase. For those advisory programs that assess transaction charges to clients, to

     Registrant, or the IAR, a conflict of interest exists because the Registrant and your IAR
     have a financial incentive to recommend or select NTF funds that do not assess
     transaction charges but cost you more in internal expenses than funds that do assess
     transaction charges but cost you less in internal expenses.

  D. Clients will be charged in arrears at the beginning of each calendar quarter based upon
     the value (market value or fair market value in the absence of market value, plus any
     credit balance or minus any debit balance), of the client's account at the end of the
     previous quarter, including any accrued interest. Fees are prorated for accounts opened
     during the quarter. The Registrant charges an additional fee for the current quarter if
     assets are deposited after the beginning of the quarter, prorated based on the number
     of calendar days remaining in the quarter. No portion of the fee will be credited to the
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Item 7       Types of Clients

     The Registrant’s clients shall generally include individuals, high net worth individuals,
     pension and profit sharing plans, charitable organizations, state or municipal government
     entities, and trade groups. Registrant shall generally price its advisory services based
     upon various objective and subjective factors. As a result, our clients could pay diverse
     fees based upon the type, amount and market value of their assets, the anticipated
     complexity of the engagement, the anticipated level and scope of the overall investment
     advisory services to be rendered, negotiations.

     Additional factors affecting pricing can include related accounts, employee accounts,
     competition, and negotiations. As a result of these factors, similarly situated clients could
     pay diverse fees, and the services to be provided by Registrant to any particular client
     could be available from other advisers at lower fees. All clients and prospective clients
     should be guided accordingly.