Smith Salley & Associates LLC

Item 5 - Fees and Compensation

General Fee Information
Fees paid to us are exclusive of all custodial and transaction costs paid to your custodian, brokers or
other third-party consultants. Please see Item 12 – Brokerage Practices for additional information.
We primarily invest your funds in individual stocks and bonds, although in the occasional situation
if you have assets invested in other types of investment vehicles, the fees paid to us are also separate
and distinct from the fees and expenses charged by those other investments such as mutual funds,
ETFs (exchange traded funds) or other investment pools to their shareholders (generally including a
management fee and fund expenses, as described in each fund’s prospectus or offering materials).
You should review all fees charged by funds, brokers, us and others to fully understand the total
amount of fees you pay for investment and financial-related services.

Wealth Management Fees
Fees charged for our Wealth Management Services are negotiable and based upon, among other
things, anticipated future earning capacity, anticipated future additional assets, value of assets to be
managed, related accounts, account composition, asset types, account retention and services to be
provided. Based upon negotiability factors, our advisory fee may be up to a maximum amount of
1.00% annually, and a tiered fee schedule may apply. Based on the foregoing, some clients will pay
more or less than other clients for the same management services. Further, some clients’ fee

schedules are based on prior contractual arrangements and/or historical fee schedules that differ
from our current fee arrangements.

There is no minimum annual fee for any account. Your specific annual fee structure is described in
your Investment Advisory Agreement (“Agreement”) with us.

Fees are billed on a quarterly basis in arrears, based upon the average daily balance of the assets in
the preceding calendar quarter. If management begins after the start of a quarter, fees will be
prorated accordingly. With your authorization, unless other arrangements are made, fees are
debited directly from your account(s).

Either of us may terminate the Agreement at any time, subject to any written notice requirements
included in the Agreement. In the event of termination, any fees due to us from you will be invoiced
or deducted from your account prior to termination.

Prior to adopting the fee schedule above, our fee schedule to manage debt portfolios was lower than
our fee schedule to manage equity and other asset class strategies. Further, we have the authority to
allocate assets among asset classes. Clients who are subject to such legacy fee arrangements should
be aware that we have a conflict of interest because a decision we make to allocate more of a portfolio
to an asset class (e.g., equities) with a higher fee increases our compensation. We mitigate this conflict
through disclosure and by having policies and procedures designed to confirm that portfolio
allocations are appropriately aligned with clients’ investment objectives and risk tolerances.

Separate Account Manager Fees
Each Manager will assess its own fee, which will be charged according to the Manager’s established
fee schedule and billing methodology. This will be disclosed to the client prior to the time of the
engagement.

Fees Applicable to Investments in Alternative Investments/Private Funds
When you invest in an Alternative Investment, you will be assessed our agreed upon portfolio
management fee as set forth in your Agreement with us. Our portfolio management fee will be
separate and additional to the management fees and expenses assessed by the Alternative
Investment. Additionally, such investments may charge performance-based fees. A performance-
based fee arrangement is one in which you are assessed a percentage of the net profits of your
investment. The applicable fees and expenses of each Alternative Investment are outlined in its
offering documents and should be reviewed prior to investing.

Most Alternative Investments are not publicly traded and therefore do not have a daily indication of
their fair market value. It is our policy to use the most recent value provided by the issuer for billing
purposes. In some cases where no updated valuations are provided, we will use the investment cost
as the valuation until an updated valuation is received. If there is any reason to believe the value may
be lower, it may be necessary to estimate value based on information received until an actual
valuation is received. Therefore, the advisory fee related to Alternative Investments may be higher
or lower than it would have been had an actual fair market been available and used.

Tax Preparation and Filing Services
In most cases, the cost of tax preparation and filing services will be included within the client’s
advisory fee and no separate fee will be charged. In certain circumstances involving increased
complexity, we may charge an additional hourly fee not to exceed $500 per/hour plus any out-of-

pocket expenses. Any additional fee will be disclosed and agreed to by the client prior to performing
the services.

Additional Compensation from Insurance Products
SSWM is also a licensed insurance producer and certain investment adviser representatives (IARs)
providing investment advice on behalf of our firm are licensed as insurance producers. We help
clients obtain insurance products from unaffiliated insurance companies by introducing clients to
certain third-party insurance agencies (the “Agencies”) under which the Agencies assist our clients
with regulated insurance sales activity. If we refer one of our clients to an Agency and there is a
subsequent purchase of insurance through the Agency, we will receive a portion of the upfront
and/or ongoing commissions paid to the Agency by the insurance carrier with which the policy was
placed. The amount of insurance commission revenue earned by SSWM is considered for purposes
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Item 7 - Types of Clients

We serve individuals, high net worth individuals, corporations, banks, trusts, and charitable
organizations. With some exceptions, the minimum portfolio value eligible for conventional
investment advisory services is $500,000 and $1,000,000 for management of individual bond
portfolios. Under certain circumstances and in our sole discretion, we may negotiate such minimums.
We do not impose a minimum annual fee for any account.