Description of Services and Fees FAI Capital Management, Inc. is a registered investment adviser based in Tampa, Florida. We are organized as a sub Chapter S corporation under the laws of the State of Florida. We have been providing investment advisory services since 2008. Jerry Ford is our principal owner. Currently, we offer the following investment advisory services, which are personalized to each individual client:
•Portfolio Management Services
•Advisory Consulting Services
•Selection of Other Advisers
•Sub-Advisory Services
•Swap Advisory Services
•Business Consulting Services
•Structured Products The following paragraphs describe our services and fees. Please refer to the description of each investment advisory service listed below for information on how we tailor our advisory services to your individual needs. As used in this brochure, the words "we", "our" and "us" refer to FAI Capital Management, Inc. and the words "you", "your" and "client" refer to you as either a client or prospective client of our firm. Also, you may see the term Associated Person throughout this brochure. As used in this brochure, our Associated Persons are our firm's officers, employees, and all individuals providing investment advice on behalf of our firm.
Portfolio Management Services We offer discretionary and non-discretionary portfolio management services. Our investment advice is tailored to meet our clients' needs and investment objectives. If you retain our firm for portfolio management services, we will meet with you to determine your investment objectives, risk tolerance, and other relevant information (the "suitability information") at the beginning of our advisory relationship. As part of our portfolio management services, we offer an investment policy statement that addresses specific areas of your interests or concerns regarding your financial resources, depending upon you unique circumstances, and serves as a guide for asset allocation.
As part of our portfolio management services, we may customize an investment portfolio for you in accordance with your risk tolerance and investing objectives. Once we construct an investment portfolio for you, we will monitor your portfolio's performance on an ongoing basis, and will re-balance the portfolio as required by changes in market conditions and in your financial circumstances.
If you participate in our discretionary portfolio management services, we require you to grant our firm discretionary authority to manage your account. Discretionary authorization will allow our firm to determine the specific securities, and the amount of securities, to be purchased or sold for your account without your approval prior to each transaction. Discretionary authority is typically granted by the investment advisory agreement you sign with our firm, a power of attorney, or trading authorization forms. You may limit our discretionary authority (for example, limiting the types of securities that can be purchased for your account) by providing our firm with your restrictions and guidelines in writing.
Non-discretionary portfolio management services are limited to governmental entities and charitable organizations. We will monitor your assets at least on a quarterly basis and will provide recommendations as to asset allocation. You are free at all times to accept or reject any investment recommendation from us. You are solely responsible for implementing any recommendations made by us under a non-discretionary portfolio management engagement.
4 Additionally, as part of our portfolio management services, we may use one or more sub-advisers to manage a portion of your account on a discretionary basis. The sub-adviser(s) may use one or more of their model portfolios to manage your account. We will regularly monitor the performance of your accounts managed by sub-adviser(s), and may hire and fire any sub-adviser without your prior approval. We may pay a portion of our advisory fee to the sub-adviser(s) we use; however, you will not pay our firm a higher advisory fee as a result of any sub-advisory relationships. The annual fee for portfolio management services is billed monthly or quarterly in arrears based on the daily asset value. Fees will be assessed pro rata in the event the portfolio management agreement is executed at any time other than the first day of a calendar month. On an annualized basis, our fee for non-discretionary portfolio management services ranges from 0.03% to 0.20% of assets under management and the fee for discretionary portfolio management services ranges from 0.05% - 0.25% .
Portfolio management fees may be negotiable depending on factors such as the amount of assets under management, range of investments, and complexity of your financial circumstances, among others. We will invoice you directly for the payment of fees.
If the portfolio management agreement is executed at any time other than the first day of a calendar quarter, our fees will apply on a pro rata basis, which means that the advisory fee is payable in proportion to the number of days in the quarter for which you are a client. Our advisory fee is negotiable, depending on individual client circumstances.
You may terminate the portfolio management agreement upon 30-days' written notice to our firm. You will incur a pro rata charge for services rendered prior to the termination of the portfolio management agreement, which means you will incur advisory fees only in proportion to the number of days in the quarter for which you are a client. Advisory Consulting Services We offer consulting services which primarily involves advising clients on specific financial-related topics. The topics we address may include, but are not limited to, risk assessment/management, investment planning, financial organization, or financial decision making/negotiation. Advisory services may also include the development of an investment policy statement. We charge either a fixed fee for advisory consulting services. Fixed fees are negotiable and range from $7,500 to $75,000, depending on the scope and complexity of services to be rendered. Alternatively, we may charge an hourly fee of up to $325 for senior staff, $295 225 for intermediate staff and $150 per hour for support staff. Our consulting fee is payable upon invoice of the agreed upon consulting services.
Selection of Other Advisers As part of our investment advisory services, we may recommend that you use the services of a third party investment adviser ("TPA") to manage your entire, or a portion of your, investment portfolio. After gathering information about your financial situation and objectives, we will recommend that you engage a specific TPA or investment program. Factors that we take into consideration when making our recommendation(s) include, but are not limited to, the following: the TPA's performance, methods of analysis, fees, your financial needs, investment goals, risk tolerance, and investment objectives. We will periodically monitor the TPA(s)' performance to ensure its management and investment style remains aligned with your investment goals and objectives.
We will either share in the advisory

fee you pay directly to the TPA or the assets managed by the TPA will be included in calculating our advisory fee. Advisory fees charged by TPAs are separate and apart from our advisory fees. The advisory fee you pay to the TPA is established and payable in accordance with the brochure provided by each TPA to whom you are referred. In the event our advisory fee is payable in addition to the TPA's fee, you should review the recommended TPA's brochure and take into consideration their fees along with our fees to determine the total amount of fees associated with 5 the recommended program. TPA fees may or may not be negotiable. Our compensation may differ depending upon the individual agreement we have with each TPA. As such, a conflict of interest may arise where our firm or our associated persons may have an incentive to recommend one TPA over another TPA with whom we have more favorable compensation arrangements.
You will be required to sign an agreement directly with the recommended TPA(s). You may terminate your advisory relationship with the TPA according to the terms of your agreement with the TPA. You should review each TPA's this brochure for specific information on how you may terminate your advisory relationship with the TPA and how you may receive a refund, if applicable. You should contact the TPA directly for questions regarding your advisory agreement with the TPA.
Sub-Advisory Services We offer sub-advisory services to unaffiliated third party money managers (the "Primary Investment Adviser"). As part of these services, we will manage assets delegated to our firm by the Primary Investment Adviser. While we are responsible for the overall management of the assets delegated to our firm, we will not communicate investment recommendations or selections directly to the Primary Investment Adviser's individual clients.
A formal agreement will govern the sub-advisory arrangement. Fees and payment arrangements are negotiable and will vary on a case-by-case basis.
Swap Advisory Services We also provide advice on the structuring and pricing of interest rate swaps associated with debt transactions. Specifically, we act on behalf of the borrowers in the capacity of a Qualified Independent Representative ("QIR").
As a general guideline, the typical fee for swap advisory services is less than or equal to .05% of the notional amount of a swap or the yield of escrow securities or the guaranteed investment contract which we arrange to obtain on behalf of the client.
We also provide periodic valuations of interest rate swaps for clients. The fee for this service is a fixed annual fee that depends on the complexity of the swap to be valued and the frequency of valuation.
Business Consulting Services Our advice to businesses includes cash flow analysis, preparing pro forma statements, investment research, and advising the client on capital arrangements, formation, and financing. Our business consulting services are limited to providing advice to the client; we do not assume or undertake authority on the client's behalf.
We charge a fixed or hourly fee for business consulting services that is negotiable depending on the scope and complexity of our services rendered. Our negotiated business consulting fee is set forth in the agreement with the client and payable in accordance with a schedule established at the onset of the engagement.
Structured Products FAI Capital Management, Inc. provides analytical services for designing and procuring portfolios in connection with activities including the refunding and/or defeasance of municipal bonds and the investment of bond proceeds. In these types of engagements we arrange for purchases of specific securities that are generally government obligations or structured investments including but not limited to forward delivery agreements, guaranteed investment contracts, and flexible repurchase agreements.
We work on our client's behalf to either arrange these purchases by obtaining bids on a competitive basis or, in rare instances, through negotiating on behalf of our client.
6 We usually charge a fixed fee for these types of engagements. Client's may pay the fee, or they may arrange or instruct the investment contract counterparty or underwriter in writing to pay our fee on the client's behalf. The fee is negotiable depending upon the complexity and scope of the plan for each engagement. As a general guideline, the typical fee for investment of municipal bond proceeds in a structured investment, or in a refunding bond escrow structuring and procurement engagement, is less than or equal to 0.2% of the cost of the portfolio or the sum of the total deposits under the agreement. In limited circumstances, the fee will be higher, often because the portfolio is small in size.
Types of Investments We offer advice on corporate debt securities, commercial paper, certificates of deposit, municipal securities, mutual funds and U.S. Government and agency securities. We provide Florida governmental entities access to collateralized depository products in banks designated as Qualified Public Depositories in accordance with Florida Statutes, Chapter 280, Security for Public Deposits.
Additionally, we may advise you on any type of investment that we deem appropriate based on your stated goals and objectives. We may also provide advice on any type of investment held in your portfolio at the inception of our advisory relationship. In the course of providing our services described above, we may offer general advice on securities or matters that relate to your investment plan. IRA Rollover Recommendations Effective December 20, 2021 (or such later date as the US Department of Labor ("DOL") Field Assistance Bulletin 2018-02 ceases to be in effect), for purposes of complying with the DOL's Prohibited Transaction Exemption 2020-02 ("PTE 2020-02") where applicable, we are providing the following acknowledgment to you. When we provide investment advice to you regarding your retirement plan account or individual retirement account, we are fiduciaries within the meaning of Title I of the Employee Retirement Income Security Act 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, so we operate under a special rule that requires us to act in your best interest and not put our interest ahead of yours. Under this special rule's provisions, we must:
•Meet a professional standard of care when making investment recommendations (give prudent advice);
•Never put our financial interests ahead of yours when making recommendations (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. Assets Under Management As of December 31, 2022, we provide continuous management services for $914,830,661 in client assets on a non-discretionary basis.