Tandem Investment Advisors Inc

Item 5 - Fees and Compensation
For direct relationships and indirect dual contract relationships, fee arrangements are established in your
written agreement with us. Fees are payable quarterly in advance, or arrears, at a rate of one quarter of the
estimated annual fee based on the closing value of your account for the previous quarter. Unless
otherwise directed, we bill the custodian for all management fees and the custodian deducts the fees from
your account and pays us. Initial fees are pro-rated for the portion of the quarter remaining based on the
inception date and value of your account under our management. If the advisory relationship is terminated
during any quarter, any pre-paid fees will be refunded with respect to the portion of the quarter remaining.
The relationship is terminable at any time by either party. If we terminate the relationship, written notice
will be given by U.S. mail. As a direct client or indirect dual-contract client, if you terminate the
relationship, we will comply and provide prompt written confirmation of this termination by mail. For
indirect clients where Tandem is the sub-advisor in a Wrap Program, the custodian usually charges the
client only one fee and a previously agreed upon portion of that fee is then paid to us as the portfolio
manager. Any pro-ration or credit of fees is the responsibility of the independent financial advisor or
Wrap Program sponsor.

If you hire us directly, without the assistance or partnership of an independent financial advisor, the
annual fee is typically 1.00% annually on the first $2 million of assets under our management. Fees are
negotiable when the assets under our management exceed $2 million. The minimum account size is
$500,000. If you are invested in the Conservative, Balanced and/or Aggressive ETF Models the fee is
typically 1.15% of assets under our management. Minimum account size is $15,000.

If you come to us indirectly, by means of an independent Financial Advisor or Wrap Program as part of a
dual-contract relationship, the advisory fees are negotiable and will vary from program to program, but
typically do not exceed 0.50% per year on a client’s account assets under management, calculated on a
quarterly basis as described above. The minimum account size is $100,000.

If you come to us indirectly, as part of a sub-advisory relationship, advisory fees are negotiable and will
vary from program to program, but typically do not exceed 0.37% per year on a client’s account assets
under management, calculated based on the Wrap Program’s specific billing procedures. The minimum
account size is $100,000.

For those clients who are invested in the non-discretionary model program available through several
Program Sponsors, advisory fees are negotiable and will vary from program to program, but typically do
not exceed 0.35% per year on a client’s account assets under management, calculated based on the Wrap
Program’s specific billing procedures. The minimum account size varies and is dependent on the Program
Sponsor/Firm.

Account minimums and fees are negotiable. Account minimum exceptions may be made as follows: if
one or more accounts of less than the stated minimum are closely related, the stated minimum may be
waived for individual accounts if the asset value of the accounts together exceeds the stated minimum; if
additional funding or accounts can be reasonably anticipated, the minimum amount may be waived; if an
account with less than the stated minimum is referred to us by an existing client, the minimum amount
may be waived; if a Wrap Sponsor or independent financial advisor specifically requests the minimum be
waived, we reserve the right to waive the minimum. Fee structures vary among financial advisory and
custodian firms that may recommend us or offer wrap services that include us.

Further, our role in indirect relationships differs from our role in direct relationships. In a direct
relationship, we are your main point of contact. In an indirect relationship, our role can often be limited to
that of a pure portfolio manager. In this case, the independent financial advisor is your main point of

contact. As a result, we recognize that not all relationships are identical and therefore reserve the right to
negotiate both fees and minimum account sizes. For all indirect client relationships, we receive no
compensation other than our contractually agreed upon management fees.

For purposes of determining the fee charged to an account, the value of all accounts held by the account
owner and/or members of the same household can be aggregated for fee calculation purposes at the
Client’s request and upon approval by Tandem. It is the Client’s responsibility to request that accounts be
treated as part of the same household. Householding of fees can provide fee breakpoint discounts if
certain asset thresholds are met. Individual retirement accounts and other personal retirement accounts
can be aggregated for this purpose, but retirement plan accounts subject to the Employee Retirement
Income Security Act of 1974 (“ERISA”) cannot be aggregated. For single-contract accounts where
Tandem does not control billing, it is the custodian’s responsibility to properly household accounts for
billing purposes per their own policies and procedures.

Occasionally, clients may ask Tandem to include in their managed accounts certain assets, for which
Tandem does not provide ongoing management or advisory services (the “unsupervised assets”). Tandem
does not include these unsupervised assets when determining the total assets under management upon
which the client’s fee is based. Tandem does not regularly research, review, monitor, or otherwise
evaluate a client’s unsupervised assets. Clients requesting this courtesy service should recognize that
Tandem may be unaware of certain factors that could lead an unsupervised asset to change in value, and
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Item 7 - Types of Clients
We provide portfolio management services to individuals, retirement plans, trusts, estates, corporations,
registered investment companies (including mutual funds), other investment advisors, banks, endowments
and foundations (as described in Item 4 above). We do not limit the types of clients we serve to those
listed above but do not serve any other type at this time.

A thorough discussion of the minimum account size we require may be found in Item 5 – Fees and
Compensation. Generally speaking, we require a minimum account size of $500,000 for accounts of
clients hiring us directly and $100,000 for accounts hiring us indirectly, that is by means of an
independent financial advisor or Wrap Program.

As discretionary portfolio managers we do not provide investment advice but are fiduciaries within the
meaning of Title I of the Employee Retirement Income Security Act (ERISA) and/or the Internal Revenue
Code, as applicable, which are laws governing retirement accounts. The way we make money creates
some conflicts with your interests.

As a fiduciary, we must:

    •        Meet a professional standard of care when making investment recommendations (if given)
             (give prudent advice);
    •        Never put our financial interests ahead of yours when making recommendations (if given)
             (give loyal advice);
    •        Avoid misleading statements about conflicts of interest, fees, and investments;
    •        Follow policies and procedures designed to ensure that we give advice that is in your best
             interest;
    •        Charge no more than is reasonable for our services; and
    •        Give you basic information about conflicts of interest.

Tandem does not currently provide investment advice with regard to the rollover of assets from a
retirement plan or individual retirement account. Clients should consult with their financial advisor to
determine the most appropriate rollover option.
In the event a direct client, who is not working with a financial advisor, asks for Tandem’s advice with
regard to an ERISA plan rollover, Tandem is required to and will complete a suitability analysis and
educate the client on the strategies being offered, fees assessed, and risks involved.