Telos Capital Management Inc

ITEM 5 - FEES AND COMPENSATION
Fee Schedule

Investment Management Services
TCM charges advisory fees for investment management services based on a percentage of the market
value of the assets the client has directed to be under TCM’s management. In general, TCM charges
advisory fees pursuant to one of three negotiable fee schedules applicable to TCM Managed Portfolios,
TCM McCuen Portfolios, and Sherman Core Portfolios (I) & (O) (each, a “Portfolio Fee Schedule”):

TCM Managed Portfolios
(Applies to most clients not otherwise charged pursuant to the TCM McCuen Portfolios or Sherman Core
Portfolios (I) & (O) as described further below):

 Assets Under                Annual Fee Percentage
 Management                  (paid quarterly)
 Entire Portfolio Value                 1.00%

TCM McCuen Portfolios
(Applies only to former McCuen & Co. Inc. clients)

 Assets Under                Annual Fee Percentage
 Management                  (paid quarterly)
 Entire Portfolio Value            0.25% to 0.75%

Advisory fees associated with TCM Managed Portfolios and TCM McCuen Portfolios generally range
from 25 basis points to 100 basis points and take into consideration the unique individual needs of each
client.

Sherman Core Portfolios
(Applies only to client accounts managed by Bruce Sherman). In general, the following fee schedules
apply to our Sherman Core Portfolios:

 Sherman Core Portfolios (I) & (O)

 Fee-Based Relationship                   Sherman Core Portfolio (I) Sherman Core Portfolio (O)
 $0 - $199,999.99                                            2.00%                       1.00%
 $200,000 - $299,999.99                                      1.75%                       1.00%
 $300,000 - $999,999.99                                      1.50%                       0.85%
 $1,000,000 - $4,999,999.99                                  1.25%                       0.70%

Telos Capital Management, Inc.                       10                                  Part 2A Brochure

 $5,000,000 - $9,999,999.99                                         1.10%                           0.60%
 $10,000,000+                                                       0.85%                           0.55%

Category I: For Individual Equities Core Portfolios of (i) individual equities (including REITS), (ii) closed-
end mutual funds/ETFs, and/or (iii) cash/money market funds.

Category O: For Income and/or Stock Index fund Core Portfolio(s) of (i) open-end stock and bond mutual
funds/ETFs, (ii) individual bonds (iii) REITS, and/or (iv) cash/money market funds.

Once a client’s Sherman Core Portfolio for a specific category (I or O) reaches a breakpoint, TCM bills all
assets under management in that strategy at the lower rate.

Fee Schedule Negotiability and Variability
All Portfolio Fee Schedules are negotiable at our sole discretion and customized based on client account
criteria such as anticipated assets, portfolio management requirements, tax management
considerations, a client’s unique situation, legacy relationships with the investment adviser relationships
servicing the account, reporting requested by a client, services to be performed, and other factors we
deem relevant. Some accounts are charged pursuant to different fee schedules honoring prior
agreements. TCM aggregates account balances of clients within the same household for purposes of
achieving the advisory fee breakpoints within each of the schedules listed above. We also manage some
family, employee, former employee, related accounts, and small short-term cash management accounts
at no charge.

From time to time we also apply different asset-based fee rates to different asset type classifications
(typically as between equity and fixed income). To the extent equity investments are charged at a higher
rate, this presents a financial incentive for us to allocate more of a client’s assets to equities instead of
fixed income. TCM addresses this conflict of interest by making full and fair disclosure in this brochure,
by memorializing the specific Portfolio Fee Schedule in the client’s investment advisory agreement, and
by only recommending or implementing equity and fixed income investments that are in proportion to a
client’s best interests. Therefore, a client’s specific Portfolio Fee Schedule will vary from client to client.
Each client’s specific Portfolio Fee Schedule is memorialized in the TCM investment advisory agreement.
A client’s specific Portfolio Fee Schedule as memorialized in the TCM investment advisory agreement
may vary from the fee schedules set forth above.

The Portfolio Fee Schedule applies to cash positions maintained in client accounts, but not to any
outstanding margin balances.

Clients should also be aware that there is a conflict of interest with respect to the different Portfolio Fee
Schedules, and that TCM has an incentive to ascribe a higher Portfolio Fee Schedule to a client due to
the additional compensation it will earn as a result. A further conflict of interest is present specifically
with respect to the Sherman Core Portfolios (I) & (O) because the asset-based fee is higher for the types
of assets and investments comprised of Category I as compared to the types of assets and investments
comprised of Category O. Therefore, TCM is financially incentivized to recommend the types of assets
and investments comprised of Category I.

Telos Capital Management, Inc.                         11                                       Part 2A Brochure

TCM addresses these conflicts of interest by making full and fair disclosure in this brochure, by
memorializing the specific Portfolio Fee Schedule in the client’s investment advisory agreement, and by
only recommending or implementing assets and investments that are in a client’s best interests.

Limited Scope Financial Planning for Non-Investment Management Clients

Hourly Financial Planning
...

ITEM 7 - TYPES OF CLIENTS
TCM provides investment management services to individual investors, trusts, estates, charitable
organizations, participants of retirement plans, small businesses, and high-net-worth individuals.

Account Requirements
Generally, TCM requires clients to maintain a minimum account size of $250,000. We generally combine
family accounts to meet the account size minimum. TCM reserves the right to reduce or waive the
account minimum requirements at our discretion.