Townsend & Associates Inc

Item 5 – Fees and Compensation

In addition to the information provide in Item 4 – Advisory Business, this section provides additional details
regarding Townsend’s services along with descriptions of each service’s fees and compensation
arrangements.

                                       Financial Planning Services

Financial Plans, Financial Consultations and Asset Allocation Services

The investment advisor representatives (“IARs”) of Townsend offer financial planning services based on
the client’s specific needs and desires for future financial needs. The information gathered is presented in
a format that does not make any promises or guarantees, but rather uses illustrations to show potential
growth, all being hypothetical. Information is gathered using programs such as Financial Profiles,
Morningstar and others. As part of this service, the IARs may also provide information and advice to clients
regarding insurance products (i.e. life, health and long-term care), which products the IARs are licensed to
sell in their separate capacity as insurance agents.

A fixed fee of $265 is charged for completing a financial profile. Fees will be due prior to services being
provided.

If a client contracts for this service, Townsend will provide a custom financial plan consisting of a written
evaluation and analysis of the information provided by the client, regarding the client’s financial goals,
objectives and current situation within 90 days of the date of the executed agreement, provided the client
furnishes Townsend with all required information. Townsend will provide clients specific recommendations,
which may include, but not be limited to the following: tax planning, retirement plan recommendations
through the 401(k) Advantage program, risk management, investments, insurance, educational funding,
retirement planning, employee benefits, estate planning, corporate or business coordination with personal
situation, cash flow analysis, financing options and charitable donations.

In addition, the IARs offer individual financial consultation services to clients who do not wish to contract
with Townsend for financial planning services or to clients who have established and maintain an account(s)
for which the IARs will not act as registered representatives and will not implement transactions on behalf
of the client. Townsend will charge a fee of $285 per hour for these services. This fee is non-negotiable.
Townsend will charge 50% of the fee, based on an estimated number of hours of service required by the
client, in advance, with the remainder of the fee due and payable upon completion of the consultation
service(s).

After reviewing the plan with the client, if the client wishes to have the IARs implement the plan, they will
implement the plan in their separate capacities as registered representatives. The IARs will then provide
asset allocation services through ongoing monitoring, recommendations and advice to accounts
established with an outside custodian. At no time will Townsend and/or its IARs act as custodian of any
client account, nor will Townsend and/or its IARs have direct access to a client’s funds and/or securities
other than to deduct advisory fees.

All asset allocation services will be provided on a non-discretionary basis, and no transactions will be
implemented by the IARs without first obtaining prior consent from the client.

A fixed fee of up to $150 will be charged for continuing financial planning services for a one year period. At
the initial meeting, which is free, the client may be requested to provide copies of tax returns and other

Townsend & Associates Inc.                                             Disclosure Brochure & Brochure Supplements
4921-7117-4328, v. 1

documents that may be used for future recommendations. Clients contracting for asset allocation services
will also receive an updated financial profile on an annual basis. After the first year, if the client chooses to
renew the services of Townsend for an additional year, an annual fee of up to $150 will be charged. Fees
charged are not for trade implementation. Both the initial and annual fees are negotiable at the discretion
of Townsend and are based on the client’s financial situation and circumstances. In addition, if the client
chooses to implement the recommendations of the IARs, the IARs will earn commissions in their separate
capacities as registered representatives or independent insurance agents. Typically, fees for this service
are due at the time the agreement is executed. However, Townsend may choose to send a billing notice
directly to the client. At the discretion of Townsend, the annual fee may be negotiable based upon the
client’s financial situation and circumstances.

Services will terminate upon completion and presentation of a written plan or upon completion of the
consultations. The agreement for asset allocation services will remain in effect for a period of one year from
the date the agreement is executed. Either party may terminate services at any time by submitting written
notice to all appropriate parties. Termination will be effective upon receipt of such notice. If services are
terminated within five business days, services will be terminated without penalty. After the initial five
business days, fees will be refunded on a prorated basis based on the time and effort expended by
Townsend and/or its IARs prior to receipt of notice of termination. If the client is not satisfied with the written
plan presented by Townsend and the plan cannot be rewritten to the client’s satisfaction, the client may
return all written documents prepared and presented to the client by Townsend for a full refund of all fees
paid in advance.

401(k) Advantage Program

Townsend offers monitoring services to qualified retirement plan accounts established with outside
custodians. These services can be provided to individual non-discretionary client accounts within a plan or
...

Item 7 – Types of Clients

Townsend generally provides investment advice to the following types of clients:

        Individuals
        High-Net Worth Individuals
        Trusts, estates, or charitable organizations

All clients are required to execute an agreement for services in order to establish a client arrangement with
Townsend, the Outside Money Manager, and/or the sponsor of a third-party money manager platform.

                                Minimum Investment Amounts Required

The minimum investment required for clients contracting for asset allocation services is at the discretion of
the investment advisor representative providing the asset allocation services.

To establish an account at Fidelity or Schwab, Townsend requires a minimum of $500,000 in total assets
under management unless otherwise directed by an IAR. At the discretion of the IARs, client’s family
members will be allowed to aggregate or bundle household accounts to meet this account minimum.

Fee Dispersion:
Townsend, in its sole discretion, may waive its $500,000 minimum or , may charge a lesser or higher
investment advisory fee, charge a flat fee, waive applicable minimum asset or minimum fee levels, waive
its fee entirely, or charge fee on a different interval, 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, complexity of the engagement, anticipated services to be rendered,
grandfathered fee schedules, employees and family members, courtesy accounts, referrals from existing
clients, competition, negotiations with client, etc. Please Note: As result of the above, similarly situated
clients could pay different fees. In addition, similar advisory services may be available from other investment
advisers for similar or lower fees. ANY QUESTIONS: Townsend’s Chief Compliance Officer, Shawn Kelly,
remains available to address any questions that a client or prospective client may have regarding advisory
fees.

Townsend & Associates Inc.                                              Disclosure Brochure & Brochure Supplements
4921-7117-4328, v. 1