SFMG LLC

ITEM 5. FEES AND COMPENSATION

We are a fee-only firm and receive no compensation for the sale of any product. In the past some
of our personnel have sold insurance products to clients, for which continuing commission checks
still arrive. We donate the full amount of these commission checks to charity.

For Wealth Management services, SFMG charges an annual wealth management fee based on
the total assets under management as follows:

                   Investment Assets Under Management           Annual Rate
                   First $1,000,000                             1.25%
                   Next $2,000,000                              0.80%
                   Assets over $3,000,000                       0.60%

This is a blended fee schedule, meaning different asset levels are assessed different fees, as
shown above. Your assets will be assessed a fee at each level, then those fees are combined for
your overall fee. For example, a client with $5,500,000 under management would pay an
annualized rate of 1.25% on the first $1,000,000, 0.80% on the next $2,000,000 and 0.6% on the

                                                                              SFMG Wealth Advisors
                                                                            Form ADV - Firm Brochure
                                                                                         March 2026

next $2,500,000, for a blended rate of 0.79%. Fees are billed quarterly, in advance, based on the
portfolio valuation as determined by the account custodian, third-party administrator, or other
valuation measures, at the close of market on the last business day of each quarter. The annual
fee is negotiable based upon certain criteria (e.g., historical relationship, type of assets,
anticipated future earning capacity, anticipated future additional assets, dollar amounts of assets
to be managed, related accounts, account composition, negotiations with Clients, etc.). Lastly,
please note that SFMG may group certain related Client accounts, often known as
“householding,” for the purposes of achieving the minimum account size and in order to attain
the lowest fee rate across all accounts.

SFMG believes its fees are reasonable in relation to the fees charged by other investment
advisers. The amount and method by which fees are charged is established in each client’s written
agreement with SFMG.

Fees related to accounts for new client relationships are charged at the end of the initial period
in arrears and in advance for the next quarter, based on the value of the account on the last
business day of the calendar quarter. All flows for the initial quarter are charged on a pro rata
basis and based on actual days in the quarter the assets were introduced into the account.
Therefore, for new client accounts established during a calendar quarter, the first fee paid by the
client may appear larger as it combines two quarters, the first full calendar quarter fee paid in
advance and a prorated fee for the preceding quarter in which the account was established, paid
in arrears. Flows into an account on a single day totaling under $5,000 will be considered de
minimis and excluded from the billing calculation.

Thereafter, we adjust the quarterly fee on a pro rata basis for flows of cash or assets into or out
of the account that are equal to or exceed $100,000 in any one day. Fee adjustments for flows
into and out of the account are calculated based on the actual days in the quarter.

Not all of our clients are on the same fee schedule as our fees, and the assets we bill on have
changed over the life of the firm. Additionally, our fees are negotiable, and we reserve the right
to negotiate any fees based on numerous factors. Therefore, some clients pay more or less than
others for similar services.

We do not purchase securities on margin as a practice, but accounts may go into margin
temporarily due to pending trade settlements from other firm directed trades. Therefore, at
times, clients may incur margin interest costs because of these transactions. There are times
when a client will choose to use margin as a form of alternative borrowing for various non-
investment purposes. When this is the case, we do not include the margin balance when
calculating the fee. Alternatively, an account may enter margin if the account “overdrafts”
because of a cash distribution. These overdraft margin amounts are usually covered within a few
days, but as a result, the client may incur margin interest costs. However, if the overdraft margin
amounts are in place at quarter end, they are netted with the investment values when calculating
the management fee.

                                                                              SFMG Wealth Advisors
                                                                            Form ADV - Firm Brochure
                                                                                         March 2026

If you have invested in a private partnership which we have recommended, we determine the
valuation for billing purposes using several different methods described below:

       The initial year, we use your total contributed capital for billing purposes until updated
       valuations are received from the Fund Sponsor. As you make additional contributions
       during the year and between valuation updates, we adjust the private partnership’s billing
       valuation accordingly. We will attempt to obtain the most recent valuations from the Fund
       Sponsors, but updates to these may lag by a quarter or more, depending upon when we
       are able to obtain the valuations. In the event that a Fund Sponsor is unable to provide
       ongoing valuations, your contributed capital into the partnership will be used as the
       valuation for billing purposes. In addition, these assets will be included in the normal fee
...

ITEM 7. TYPES OF CLIENTS

We generally provide investment advice to:
   • Individuals and families
   • High net worth individuals and families
   • Pension and Profit-Sharing plans
   • Trust, estates, or charitable organizations
   • Corporations or other business not listed above

SFMG seeks to have a minimum relationship size of $1,000,000 for Wealth Management clients
but does reserve the right to waive these minimums or accept or decline a potential client for
any reason in its sole discretion.

SFMG has a Wealth Advisor who holds the Certified Divorce Financial Analyst designation.
Through this designation they can provide consulting services to clients involved in the
Collaborative Law Divorce Process.