Shapiro Financial Security Group Inc

Item 5. Fees and Compensation

Shapiro Financial offers its services on a fee basis, structured as hourly and/or fixed fees, as well as fees
based upon assets under management.

Financial Planning and Consulting Fees

Shapiro Financial charges a fixed fee and/or hourly fee for financial planning and consulting services. These
fees are negotiable, but generally range from $1,000 to $7,500 on a fixed fee basis and/or from $70 to $350
on an hourly rate basis, depending upon the level and scope of the services and the professional rendering
the financial planning and/or the consulting services. The firm’s typical on-going comprehensive financial
planning retainer fee is $750 to $2,500. The first payment is generally due at the first meeting, a second
payment is due at the second meeting and the balance is due at the third meeting.

Prior to engaging Shapiro Financial to provide financial planning and/or consulting services, the client is
required to enter into a written agreement with Shapiro Financial setting forth the terms and conditions of
the engagement.

Investment Management Fee

Shapiro Financial provides discretionary and non-discretionary investment management services for an
annual fee based upon a percentage of the market value of the assets being managed by the firm. The
firm’s annual fee is exclusive of, and in addition to brokerage commissions, transaction fees, and other
related costs and expenses which are incurred by the client. Shapiro Financial does not, however, receive
any portion of these commissions, fees, and costs. Shapiro Financial’s annual fee is prorated and charged
quarterly, in advance, based upon the market value of the assets on the last day of the previous quarter.
The annual fee varies depending upon the market value of the assets under management, as follows:

                       Up to $100,000                                           1.25%
                        Next $150,000                                           1.00%
                        Next $250,000                                           0.80%
                        Next $500,000                                           0.65%
                      Above $1,000,000                                        Negotiable

Certain clients with accounts less than $50,000 are usually billed using hourly rates, or a negotiated
management fee, based upon certain criteria (i.e., anticipated future earning capacity, anticipated future
additional assets, dollar amount of assets to be managed, related accounts, account composition, pre-
existing client, account retention, pro bono activities, etc.).

                                     Shapiro Financial Security Group, Inc. Disclosure Brochure

Fees Charged by Financial Institutions
As further discussed in response to Item 12 (below), Shapiro Financial generally recommends that clients
utilize the brokerage and clearing services of primarily Fidelity Institutional Wealth Services (“Fidelity”) for
investment management accounts.

Shapiro Financial only implements its investment management recommendations after the client has
arranged for and furnished Shapiro Financial with all information and authorization regarding accounts with
appropriate financial institutions. Financial institutions include, but are not limited to, Fidelity, any other
broker-dealer recommended by Shapiro Financial, broker-dealer directed by the client, trust companies,
banks etc. (collectively referred to herein as the “Financial Institution”).

Clients incur charges imposed by the Financial Institution and other third parties such as custodial fees,
brokerage commissions, transaction fees, charges imposed directly by a mutual fund or ETF in the account,
which are disclosed in the fund’s prospectus (e.g., fund management fees and other fund expenses),
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.

Shapiro Financial’s agreement with any Financial Institution authorizes Shapiro Financial to debit the client’s
account for the amount of Shapiro Financial’s fee and to directly remit that management fee to Shapiro
Financial. Any Financial Institution recommended by the firm has agreed to send a statement to the client,
at least quarterly, indicating all amounts disbursed from the account including the amount of management
fees paid directly to Shapiro Financial.

Fees for Management During Partial Quarters of Service

For the initial period of investment management services, the fees are calculated on a pro rata basis.

The Agreement between Shapiro Financial and the client will continue in effect until terminated by either
party pursuant to the terms of the Agreement. Shapiro Financial’s fees are prorated through the date of
termination and any remaining balance is charged or refunded to the client, as appropriate.

Clients are permitted to make additions to and withdrawals from their account at any time, subject to
Shapiro Financial’s right to terminate an account. Shapiro Financial reserves the right to decline to accept
additions of particular securities into a client’s account. Clients may withdraw account assets with notice to
Shapiro Financial, subject to the usual and customary securities settlement procedures. However, the firm
designs its portfolios as long-term investments and the withdrawal of assets could impair the achievement
of a client’s investment objectives. Shapiro Financial is available to consult with its clients about the
options and ramifications of transferring securities. However, clients are advised that when transferred
securities are liquidated, they are subject to transaction fees, fees assessed at the mutual fund level (i.e.
contingent deferred sales charge) and/or tax ramifications.

                                     Shapiro Financial Security Group, Inc. Disclosure Brochure
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Item 7. Types of Clients

Shapiro Financial generally provides its services to individuals. However, the firm may also provide advice
to trusts, estates, corporations and business entities.

Minimum Fee

As a condition for starting and maintaining a relationship, Shapiro Financial generally imposes a minimum
annual fee of $500. This minimum fee could have the effect of making the firm’s service impractical for
clients, particularly those with portfolios less than $40,000 under the firm’s management. Shapiro Financial,
in its sole discretion, has the option to waive its minimum annual fee based upon certain criteria including
anticipated future earning capacity, anticipated future additional assets, dollar amount of assets to be
managed, related accounts, account composition, pre-existing client, account retention, and pro bono
activities.

                                    Shapiro Financial Security Group, Inc. Disclosure Brochure