Valley Financial Group Inc

Fees and Compensation

Our Wrap Fees
All investment management clients will be required to execute an Investment Management Agreement
that will describe the type of management services to be provided and the fees, among other items.
Clients are advised that they may pay fees that are higher or lower than fees they may pay another
advisor for the same services, and may in fact pay lower fees for comparable services from other
sources. Clients are under no obligation at any time to engage or to continue to engage, VFG for
investment services. VFG asset management fees generally range from 0% to 1% per annum of the
net market value of a client’s account managed by VFG, as shown in the schedule below. Clients may
pay a different fee in each account dependent on the assets within that account. Fees are negotiable
and may be higher or lower than this range, based on the nature of the account, and the origin of the
client. Factors affecting fee percentages include the size of the account, complexity of asset structures,
and any other unique factors that may exist. All clients, but especially those with smaller accounts,
should be advised they may receive similar services from other professionals for higher or lower
overall costs. Financial Planning fees are included in the asset management fee.

For clients whose assets are managed by the firm, investment advisory fees will be debited directly
from each client’s account. The advisory fee is paid quarterly, in advance, and the value used for the
fee calculation is the net value as of the last market day of the previous quarter, including any cash in
the client’s account. For example, if your annual fee is 1.00%, each quarter we will multiply the value
of your account by 1.00%, then divide by the number of days in that calendar year and multiply that
number by days in the quarter to calculate our fee. To the extent there is cash in your account, it will
be included in the value for the purpose of calculating fees only if the cash is part of an investment
strategy. Once the calculation is made, we will instruct your account custodian to deduct the fee from
your account and remit it to VFG. Clients whose fees are directly debited will provide written
authorization to debit advisory fees from their accounts held by a qualified custodian chosen by the
client. VFG is to invoice the qualified custodian for fees. Each quarter, the client will receive a
statement from their account custodian showing all transactions in their account, including the fee.
VFG encourages clients to carefully review the statements and confirmations sent to them by their
custodian, and to compare the information on reports prepared by VFG against the information in the
statements provided directly from the custodian. Please alert VFG of any discrepancies.

There are a number of other fees that can be associated with holding and investing in securities. For
clients participating in VFG’s wrap program, these include some fees that may be paid by VFG on
your behalf, such as transaction fees for the purchase or sale of a mutual fund or Exchange Traded
Fund, or commissions for the purchase or sale of a stock, as discussed above. All other fees will be
deducted from your account. Expenses of a mutual fund or ETF will not be included in management
fees, as they are deducted from the value of the shares by the manager. When selecting mutual funds
that have multiple share classes for recommendation to clients, VFG will take into account the internal
fees and expenses associated with each share class, and it is VFG policy to choose the lowest-cost
share class available, absent circumstances that dictate otherwise. For complete discussion of expenses
related to each mutual fund or ETF, you should read a copy of the prospectus issued by that fund. VFG
can provide or direct you to a copy of the prospectus for any fund that we recommend to you. Fees
charged by independent third party managers are also separate and additional to any fees paid to VFG,
and such managers will be authorized to separately debit fees from client accounts.

Please make sure to read Item 12 of the Informational Brochure, where we discuss broker-dealer and
custodial issues.

      Pro-rata Fees
      If you become a client during a quarter, you will pay a management fee for the number of days left in
      that quarter. If you terminate our relationship during a quarter, you will be entitled to a refund of any
      management fees for the remainder of the quarter. Once your notice of termination is received, we
      will assess pro-rated fees for the number of days between the end of the prior billing period and the
      date of termination to be paid in whatever way you direct (check, wire). VFG will cease to perform
      services, including processing trades and distributions, upon termination. Assets not transferred from
      terminated accounts within 30 (thirty) days of termination may be “de-linked”, meaning they will no
      longer be visible to VFG and will become a retail account with the custodian.

Item 5: Account Requirement and Type of Clients

      Clients participating in the program may include individuals, families, trusts, charitable organizations
      and foundations, businesses, and pension plans. VFG does not impose a stated minimum fee or
      minimum portfolio value for starting or maintaining an investment advisory relationship.

Item 6: Portfolio Manager Selection and Evaluation

      The wrap fee program offered by VFG is sponsored by the firm. The only fees covered under the wrap
      fee program are transaction fees associated with the purchase and sale of securities in an account
      managed by VFG as well as asset based fees. All client accounts managed by VFG, including wrap
      fee program clients, are managed with similar processes, although account recommendations may
      differ.

      Methods of Analysis, Investment Strategies and Risk of Loss
...

Item 7:       Types of Clients

      Clients advised may include individuals, families, trusts, charitable organizations and foundations,
      businesses, and pension plans. VFG does not impose a stated minimum fee or minimum portfolio value
      for starting or maintaining an investment advisory relationship.