BEACON FINANCIAL ADVISORS LTD

Firm Brochure (Part 2A of Form ADV) BEACON FINANCIAL ADVISORS, LTD. ("BEACON") 1800 ST. JAMES PLACE, SUITE 101 HOUSTON, TEXAS 77056 PHONE 713.622.9981 FAX 713.622.5814 Email firstname@bfaltd.com This brochure provides information about the qualifications and business practices of BEACON. If you have any questions about the contents of this brochure, please contact us at: Phone 713.622.9981 Email firstname@bfaltd.com (e.g. josh@bfaltd.com) The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission, or by any state securities authority. Additional information about BEACON is available on the SEC’s website at http://www.adviserinfo.sec.gov. FEBRUARY 2025 Beacon Financial Advisors, Ltd.  Material Changes Here we describe any material changes, if applicable, since the last annual update of our Firm Brochure. Annual Update The Material Changes section of this brochure will be updated annually when material changes occur since the previous release of the Firm Brochure. Material Changes since the Last Update The last annual update of our Firm Brochure was February 2024. In this February 2025 annual update to our Firm Brochure the material changes are: NONE Full Brochure Available Whenever you would like to receive a complete copy of our Firm Brochure free of charge, please contact us at: o Phone 713.622.9981 or Fax 713.622.5814 o Email firstname@bfaltd.com. (e.g. josh@bfaltd.com) o Website http://www.bfaltd.com, (click on DISCLOSURE then ADV). Writers and Readers Writers - "we", "us", and "our" refer to BEACON Readers - "you" and "your" refer to our Clients and prospective clients Charts, Graphics, Tables, and Text Boxes, etc. - dispersed throughout our BROCHURE are various visual aids we hope will assist your understanding of our services and investment strategies. These visual aids are not required by government rules to be in our BROCHURE. Furthermore, these visual aids do not depict or represent an actual client outcome, or promote specific advice. i Beacon Financial Advisors, Ltd.  Table of Contents Material Changes ..................................................................................................................... i Annual Update ......................................................................................................................... i Material Changes since the Last Update .................................................................................. i Full Brochure Available ............................................................................................................ i Writers and Readers ................................................................................................................. i Advisory Business .................................................................................................................... 1 Firm Description ...................................................................................................................... 1 Principal Owners ..................................................................................................................... 2 Types of Advisory Services ...................................................................................................... 2 Tailored Relationships ............................................................................................................. 3 Types of Agreements .............................................................................................................. 3 Financial Planning Agreement ................................................................................................. 3 Investment Management Agreement ..................................................................................... 4 Asset Management ................................................................................................................. 6 Termination of Agreement ...................................................................................................... 6 Fees and Compensation........................................................................................................... 7 Description .............................................................................................................................. 7 Fee Billing ................................................................................................................................ 7 Other Fees ............................................................................................................................... 8 Expense Ratios ........................................................................................................................ 8 Graphical Illustration of Fees and Compensation .................................................................... 8 Performance-Based Fees ......................................................................................................... 9 Why we do not use Performance-Based Fees ......................................................................... 9 Types of Clients ....................................................................................................................... 9 Description .............................................................................................................................. 9 Account Minimums ................................................................................................................. 9 Attributes of Types of Clients We Serve ................................................................................ 10 Methods of Analysis, Investment Strategies and Risk of Loss ................................................ 10 Methods of Analysis .............................................................................................................. 10 TOC 1 Beacon Financial Advisors, Ltd.  Investment Strategies ........................................................................................................... 11 Risk of Loss ............................................................................................................................ 13 Disciplinary Information ........................................................................................................ 17 Legal and Disciplinary ............................................................................................................ 17 Other Financial Industry Activities and Affiliations ................................................................ 17 Financial Industry Activities ................................................................................................... 17 Affiliations ............................................................................................................................. 17 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading ............ 18 Code of Ethics........................................................................................................................ 18 Participation or Interest in Client Transactions ..................................................................... 18 Personal Trading ................................................................................................................... 19 Brokerage Practices ............................................................................................................... 19 Selecting Brokerage Firms ..................................................................................................... 19 Best Execution ....................................................................................................................... 22 Soft Dollars ............................................................................................................................ 23 Order Aggregation ................................................................................................................. 23 Review of Accounts ............................................................................................................... 23 Periodic Reviews ................................................................................................................... 23 Review Triggers ..................................................................................................................... 23 Regular Reports ..................................................................................................................... 24 Client Referrals and Other Compensation .............................................................................. 25 Incoming Referrals ................................................................................................................ 25 Referrals Out ......................................................................................................................... 25 Other Compensation ............................................................................................................. 25 Custody ................................................................................................................................. 25 Account Statements .............................................................................................................. 25 Performance Reports ............................................................................................................ 26 Net Worth Statements .......................................................................................................... 26 Investment Discretion ........................................................................................................... 26 Discretionary Authority for Trading ...................................................................................... 26 TOC 2 Beacon Financial Advisors, Ltd.  Limited Power of Attorney .................................................................................................... 27 Voting Client Securities .......................................................................................................... 27 Proxy Votes ........................................................................................................................... 27 Financial Information ............................................................................................................ 28 Financial Condition ................................................................................................................ 28 Part 2B of Form ADV - known as the Brochure SUPPLEMENT, Part 2B is included with Part 2A (the BROCHURE) when delivered to clients and prospective clients. Government rules do not require the SUPPLEMENT (2B) be filed online with the BROCHURE (2A). Brochure Supplement (Part 2B of Form ADV) ........................................................................ 29 Education and Business Standards ........................................................................................ 29 Professional Certifications ..................................................................................................... 29 JOSHUA J. HEBERT, CERTIFICATIONS ..................................................................................... 31 TOC 3 Beacon Financial Advisors, Ltd.  Advisory Business Here we describe our firm, our owners, the two principal services we offer to provide, the agreements that govern those services, and our fee-only method of compensation. Firm Description Beacon Financial Advisors, Ltd., (“BEACON”) was founded in 1993. Our founding member had over forty (40) years’ experience in financial services, succeeded by our current principal member with over twenty (20) years’ experience. BEACON is strictly a fee-only financial planning and investment management firm. BEACON does not sell annuities, insurance, stocks, bonds, mutual funds, limited partnerships, or other commissioned products. BEACON is not affiliated with entities that sell financial products or securities. No commissions in any form are accepted. No finder’s fees are accepted or solicited. Other professionals (e.g., lawyers, accountants, insurance agents, etc.) are engaged directly by you on an as-needed basis. Our client service-brief Beacon's Approach to Client Service: TEAMWORK...Assigning the Team Members is an easy-to-follow chart that describes the role we play as a key member of your financial "team" and the role of other team members (accountant, attorney, etc.). Below are the roles for you, the client, and BEACON, the advisor (ask us for a complete copy). THE CLIENT  Joe Q. & Joan G. Investor  Owner, Chairman and Chief Executive Officer  Highest authority on team  Entity to whom all team members are ultimately responsible and accountable (directly or indirectly)  Power to hire, fire all team members  Delegates certain well-specified functions to other team members THE ADVISOR  Beacon Financial Advisors, Ltd.  Hired by CLIENT  Chief Financial and Operating Officer  Registered Investment Advisor (follows regulatory rules by SEC, states)  Writes Investment Policy Statement and sets asset allocation for CLIENT  Recommends CUSTODIAN and selects INVESTMENT PARTNERS  Prepares CLIENT financial plan and monitors ongoing implementation  Overall COORDINATOR and CATALYST for CLIENT by and between all other team members to accomplish all agreed-upon action steps  Reports investment results to CLIENT  Paid directly by CLIENT via fees - 1 - Beacon Financial Advisors, Ltd.  For prospective clients, the initial meeting with BEACON is free of charge (complimentary) and is an exploratory interview to determine if our services may be beneficial to you. The meeting generally lasts 1-2 hours by one of three methods: In Beacon's Houston office (or your home or office if outside Houston). Via telephone. Via online/virtual video conferencing (e.g., Go-To-Meeting). Principal Owners BEACON is a Texas Limited Liability Company with "members". Presently Joshua J. Hebert is a 100% member. Types of Advisory Services BEACON provides two principal advisory services as described below. Our services are generally provided to individuals and families, and their related pension and profit-sharing plans, 401k plans, trusts, charitable entities, and estates. Financial Planning - identification of your financial assets and liabilities, cash flow management, tax planning, insurance review, education funding, retirement planning, and estate planning. We call this the quantitative part of your investment policy. Investment Management - determination of your investment OBJECTIVES and CONSTRAINTS, identification of your risk profile, and the implementation and management of an investment plan we jointly agree is appropriate for you. We call this the qualitative part of your investment policy. Our client service-brief Your INTEGRATED Financial Life: BEACON'S Approach includes an easy-to-follow chart shown below that depicts the content areas of our two primary services (ask us for a complete copy): YOUR FINANCIAL LIFE IS INTEGRATED...GOOD DECISIONS CONSIDER THE WHOLE Other Financial Decisions Cash Sources & Uses Investment Policy Statement Tax Planning (Income/Estate/Gift) Salary Continuation (Disability) Retirement Planning Life Insurance (Capital Needs) Education Funding “...your financial plan is not a 3-ring leather binder that gathers dust—it is a lifetime endeavor.” - 2 - Beacon Financial Advisors, Ltd.  An important consideration for you is BEACON provides investment management services for all our clients. We provide financial planning services to most of our clients that have specifically engaged us for that service. We do NOT provide financial planning services apart from investment management services. Another important consideration for you is BEACON'S investment research and advice covers exclusively regulated investment companies, commonly known as mutual funds. We discuss this more fully later in the Investment Strategies sub-section of Methods of Analysis, Investment Strategies and Risk of Loss. As of 12/31/24, BEACON had approximately $290,280,043 in assets under management. Approximately $284,767,792 is managed on a discretionary basis, and $5,512,251 is handled on a non-discretionary basis. Discretion means you have given us the authority to place buy and sell orders in your accounts, and non-discretion means only you have the authority to place orders. BEACON segregates and includes both types in our portfolio performance reporting to you. Tailored Relationships Your unique goals and objectives are documented in our client relationship management and portfolio management systems. In developing your investment policy, you may impose constraints (restrictions) on investing in certain broad asset classes. We call these client mandates. Types of Agreements The following agreements define the two principal advisory services described previously in Types of Advisory Services. Financial Planning Agreement A financial plan is designed to help you with all aspects of financial planning coupled with ongoing investment management. Our Financial Planning Agreement considers two phases: Compilation and Data Confirmation - the initial phase of collecting your information, compiling your present financial situation, and financial confirming accuracy and completeness with you, etc. Ongoing Plan Implementation - this second (and ongoing) phase takes the form of client meetings to review our recommendations and those of your other advisors (as applicable). BEACON prepares a Meeting Itinerary prior to the meetings, and afterwards we prepare a meeting follow-up memo detailing the major points and action items. The Meeting Itinerary and meeting follow-up memo may include, but is not limited to: a net worth statement; a cash flow statement; a review of investment accounts, including reviewing asset allocation and providing rebalancing recommendations; strategic income tax planning; a review of retirement accounts and plans including - 3 - Beacon Financial Advisors, Ltd.  recommendations; a review of insurance policies and recommendations for changes, if necessary; one or more retirement scenarios; estate planning review and recommendations; and education planning with funding recommendations. In addition to the two phases discussed above, we offer two types of financial planning engagements (if you have also engaged us for investment management and if financial planning is appropriate for you): Comprehensive - covers all the major financial planning subject areas. The fee for comprehensive depends on the facts learned at the start of the engagement. The minimum fee is $3,000 (or the fee range is $3,000 to $15,000+) and is negotiable. Since financial planning is a discovery process, situations may occur that you are unaware of certain financial exposures or predicaments. In the event that your situation is substantially different than disclosed at the start, a revised fee will be provided for mutual agreement. You must approve the change of scope in advance of the additional work being performed when a fee increase is necessary. Focused or Hourly - cover specific financial planning topic area(s). The fee for focused/hourly is based on BEACON'S hourly billing rates discussed with you before any work is performed. In the past all of BEACON'S revenue has been from investment management. Our financial planning services have been provided at no additive cost to our investment management services--something we call "value added." While this may change in the future, this remains a negotiable fee. Investment Management Agreement As noted above in Types of Advisory Services you choose to have BEACON manage your assets. Realistic and measurable goals (OBJECTIVES and CONSTRAINTS) are recorded in your investment policy statement. As goals and objectives change over time, recommendations are made and implemented on an ongoing basis. The scope of work and fee for an Investment Management Agreement is provided to you in writing prior to the start of the engagement. Our Investment Management Agreement includes: BEACON'S Services Develop, with you, a written Investment Policy Statement which specifies your investment OBJECTIVES and CONSTRAINTS. Prepare an Investment Recommendation Matrix which identifies how your portfolio should be allocated by asset class, and also lists the individual investments deemed to be suitable for your portfolio. The asset allocation target may be periodically changed or your portfolio re-balanced due to changes in your circumstances or market conditions. Implement the agreed-upon Investment Recommendation Matrix. - 4 - Beacon Financial Advisors, Ltd.  Monitor the portfolio to assure current asset allocation is in line with target asset allocation and make re-balancing changes as needed. Also, review the individual Investment MEMOs, investments and report to you with ADVISORYs, and ALERTs as necessary, and during client meetings. Measure and Report investment results to you via your online, secure Client Portal and Document Vault. Additionally, on a monthly basis you will receive statements directly from the brokerage firm (e.g., Schwab Advisor Services) as well as confirmations of any transactions in each portfolio sub-account. BEACON will also receive this information from the broker. You can elect to receive either postal or email statements for the brokerage statements. You are always urged to compare the custodians (Schwab Advisor Services et al) account statements with your Client Portal. Your Responsibility Participate in meetings with BEACON as scheduled for review. Notify BEACON of significant cash flows (deposits and withdrawals) affecting your portfolio sub-accounts if not previously part of your Investment Policy Statement. Update BEACON of any material changes in your financial circumstances that may alter your Investment Policy Statement. Permit BEACON to execute agreed-upon trades in your portfolio sub-accounts with your written authorization to the broker or asset custodian. Your authorization will be evidenced by a limited power of attorney in favor of BEACON and will follow those terms and conditions. Acknowledge that investment results are not guaranteed by BEACON. The annual Investment Management Agreement fee is based on a percentage of the investable assets according to the following sliding-scale (tiered) schedule: 1.00%_ on the first $1,000,000; 0.75%_ on the next $1,000,000 (from $1,000,001 to $2,000,000); and 0.50%_ on the assets above $2,000,000. The minimum annual fee for investment management is $5,000 and is negotiable. The Investment Management Agreement is an ongoing (i.e., evergreen) agreement. The length of service is at your discretion. You or BEACON may terminate an Investment Management Agreement by written notice to the other party. At termination, fees will be billed on a pro rata basis for the portion of the quarter completed. The portfolio value at the completion of the prior full billing quarter is used as the basis for the fee computation, adjusted for the number of days during the billing quarter prior to termination. - 5 - Beacon Financial Advisors, Ltd.  Asset Management As noted previously BEACON'S investment research and advice covers exclusively regulated investment companies, commonly known as mutual funds. We discuss this more fully later in the Investment Strategies sub-section of Methods of Analysis, Investment Strategies and Risk of Loss. To understand the "kind" of investments in your brokerage accounts, we first distinguish between BEACON-managed (discretionary) accounts and your self- directed (non-discretionary) accounts. Discretionary accounts are managed by us. Non-discretionary accounts are managed by you with our administrative assistance. Most of our clients have only discretionary accounts. Your assets in BEACON-managed (discretionary) accounts are invested exclusively in no-load mutual funds accessed through brokers like Schwab Advisor Services. Mutual fund companies charge you an investment management fee that is disclosed in the fund prospectus. Brokerages may charge a transaction fee (not a “load”) for the purchase of some no-load, institutional share-class funds. BEACON does not receive any compensation, in any form, from fund companies or any third parties. Your assets in self-directed (non-discretionary) accounts can be invested in a wide range of securities* including individual stocks and bonds. The brokerage firm charges a transaction fee for stock and bond trades. BEACON does not receive any compensation, in any form, from your account trades in self-directed accounts. *Investments may also include: equities (stocks), warrants, corporate debt securities, commercial paper, certificates of deposit, municipal securities, investment company securities (variable life insurance, variable annuities, and mutual funds shares), U. S. government securities, options contracts, futures contracts, and interests in partnerships. Initial public offerings (IPOs) are not generally available through BEACON. Termination of Agreement You may terminate either of the two agreements at any time by notifying BEACON in writing and paying the rate for the time spent on the investment advisory engagement prior to notification of termination. If you made an advance payment, BEACON would refund any unearned portion of the advance payment. BEACON may terminate either of the two agreements at any time by notifying you in writing. If you made an advance payment, BEACON would refund any unearned portion of the advance payment. - 6 - Beacon Financial Advisors, Ltd.  Fees and Compensation Here we describe our fees, and the other likely costs you can expect from brokerages and mutual fund companies. Description BEACON bases its investment management fees on a percentage of assets under management, an approach that is widely used in the industry. (As noted previously, our financial planning fees include hourly charges and fixed. Financial planning work is priced according to the degree of complexity associated with the client’s situation). The annual Investment Management Agreement fee is based on a percentage of the investable assets according to the following sliding-scale (tiered) schedule: Discretionary (managed) accounts: 1.00%_ on the first $1,000,000; 0.75%_ on the next $1,000,000 (from $1,000,001 to $2,000,000); and 0.50%_ on the assets above $2,000,000. Non-Discretionary (client directed) accounts*: 0.35%_ on $all; (*if you want an institutional account with BEACON to benefit from tax-lot accounting, income tax reporting, and performance measurement reporting; often a non-discretionary account is used when you have given us a client-mandate to hold specified prior position(s) for personal, investment, tax, other reasons). The minimum annual fee for investment management is $5,000 and is negotiable. BEACON, in its sole discretion, may waive its minimum fee and/or charge a lesser investment management fee based upon certain criteria (e.g., historical relationship, type of assets, anticipated future earning capacity, anticipated future additional assets, dollar amounts of assets to be managed, related accounts, account composition, negotiations with clients, etc.). This is depicted on your quarterly Fee- For-Service Schedule as a professional courtesy discount. Fee Billing Investment management fees are billed quarterly, in advance, meaning that we invoice you before the three-month billing period has begun. Payment in full is expected upon invoice presentation. Your fees may be deducted (debited) from your designated client brokerage account to facilitate billing (see later section on Custody). You must consent in advance to direct debiting of your brokerage account. This is always done per a limited power of attorney form you sign with the custodian of your account(s). You select the account debit approach or opt to be billed directly. Fees for financial planning work, if applicable, are billed in the same way as above. - 7 - Beacon Financial Advisors, Ltd.  Other Fees Custodians and brokers may charge transaction fees on purchases or sales of certain no-load mutual funds. These transaction charges are usually small and incidental to the purchase or sale of a security. In our opinion, the selection of the security is more important than the nominal fee that the custodian charges to buy or sell the security. For more information see Brokerage Practices. Expense Ratios Mutual funds generally charge a management fee for their services as investment managers. The management fee is the largest part of what is called an expense ratio. For example, an expense ratio of 0.54 means that the mutual fund company charges 0.54% for all their services. The mutual fund expense ratio is in addition to the fees you pay BEACON. Performance figures quoted by mutual fund companies in various publications are after their expense ratio has been deducted. Graphical Illustration of Fees and Compensation The chart below is a visual of the different components of Total Costs you can expect (the actual %'s vary year to year and the chart below is illustrative and not indicative of any actual cost for a specific client or group). The bar chart shows BEACON'S fees, the average expense ratios of the mutual funds we use, and the transactions fees and/or commissions charged for brokerage purchase and sale trades. FOR ILLUSTRATION PURPOSES - Charts, Graphics, Tables, and Text Boxes, etc. - dispersed throughout our BROCHURE are various visual aids we hope will assist your understanding of our services and investment strategies. These visual aids are not required by government rules to be in our BROCHURE. Furthermore, these visual aids do not depict or represent an actual client outcome, or promote specific advice. - 8 - Beacon Financial Advisors, Ltd.  Performance-Based Fees Here we explain that we do not assess performance-based fees. Why we do not use Performance-Based Fees Our fees are not based on a share of the capital gains or capital appreciation of your managed securities. BEACON does not use a performance-based fee structure because of the potential conflict of interest and the high cost to you. Our general observation about Performance-based compensation is: Performance-based compensation may create an incentive for the adviser to recommend an investment that may carry a higher degree of risk to the client, and often include investments that are highly illiquid like private placement equities, etc., or are unusually complex. Performance-based fees are commonly quite high. For example, in the hedge-fund industry performance-based fees typically range from 1% to 2% of the assets managed, plus 20% to 25% of the gains/appreciation (not of the losses). Types of Clients Here we describe our client-types and their attributes. Description BEACON primarily provides our services to individuals and families, and their related pension and profit-sharing plans, 401k plans, trusts, charitable entities, and estates. These individuals and families include professionals like attorneys and physicians, as well as corporate employees. Many of our clients are retired from the workplace. Our client engagements vary in scope and length of service. The scope of service is primarily dependent on your complexity and needs. Regarding length of service, our goal is an evergreen working relationship with you. We have provided continuous service to many clients for ten, twenty, and thirty years or more. Account Minimums BEACON does not specify a minimum account size of assets under management, however our minimum annual fee for investment management is $5,000. Using our fee schedule this translates to a starting account size of $500,000 or more. - 9 - Beacon Financial Advisors, Ltd.  BEACON, in its sole discretion, may waive its minimum fee and/or charge a lesser investment management fee based upon certain criteria (e.g., historical relationship, type of assets, anticipated future earning capacity, anticipated future additional assets, dollar amounts of assets to be managed, related accounts, account composition, negotiations with clients, etc.). This is depicted on your annual Fee-For- Service Schedule as a professional courtesy discount. While every client engagement is unique, clients' engaging BEACON for both investment management plus financial planning services typically have investable assets of $1,000,000 or more, and clients' engaging BEACON for only investment management typically have $500,000 or more. Attributes of Types of Clients We Serve We believe our services are best suited for clients that consider the following factors to be important to their selection of an investment manager and financial advisor: investment management are lifelong Believe investing is an integral part of financial planning, not an end in itself. Pursue a balanced, global portfolio construction approach with no load mutual funds (often institutional class). Recognize financial planning and endeavors as contrasted with one-time engagements. Understand their financial life is integrated and will teamwork with Beacon in managing the totality of their financial and investment life. Prefer a personable, independent firm for whom they are always important clients. Methods of Analysis, Investment Strategies and Risk of Loss Here we explain our investment strategy that we refer to as balanced, global investing using mutual funds. We further explain how we research our mutual fund partners. Finally, we discuss investing risk generally and how risk of loss is an important consideration in any investment strategy including ours. Importantly, our methods of analysis and investment strategy do not involve unusual risks. Methods of Analysis Security analysis methods generally may include charting, fundamental analysis, technical analysis, and cyclical analysis. We primarily use mutual fund partners that apply fundamental analysis for the holdings in your account/portfolio. The main source of information we use to select our mutual fund partners is conducting meetings either face-to-face, online, or by phone. We review research papers they present as foundational principals on their methods, as well as their proxy - 10 - Beacon Financial Advisors, Ltd.  materials and shareholder letters. As supporting materials, we also use purchased and/or publicly available research resources. Investment Strategies We believe in (what we term) "balanced, global" portfolio construction and management. Rather than focus exclusively on a single asset class (stocks or bonds, etc.), we inclusively use multiple asset classes when building portfolios for you. Balanced means we diversify across asset types with different risk / reward profiles. Global means assets span the investment world’s borders to take advantage of attractive investment opportunities wherever they present themselves. Investment advisors are often categorized by the investment "style" used such as growth, momentum, value, indexing, etc. In our role as investment advisor, we are free to use various money managers (via mutual funds), thus enabling you to enjoy the diversification benefit of multiple styles in your portfolio. We’re not locked into a single investment worldview, allowing for flexibility in our decisions. We most often use "active" investment managers that make investment decisions based on extensive research, in contrast with "passive" strategies like index funds. We believe asset prices (stocks, bonds, etc.) can stray from their fundamental value in part because many investors buy and sell based on emotions like greed, fear and panic, producing short- term volatility. We believe that investing for the long term, based on thorough fundamental research and valuation discipline, is appropriate for any market environment. In contrast to "buy and hold" we emphasize "buy and closely monitor." We believe in owning real businesses, not in "trading stocks." That is the guiding principle helping us select mutual fund partners for your portfolio. We practice integrated asset allocation and believe that asset allocation---the way your portfolio holdings are divided among stocks, bonds and other asset classes---is an important determinant of your investment results over time. We also believe international (non-U.S.) assets are important in modestly reducing long-term portfolio risk while preserving and enhancing long-term return potential. We use eight (8) distinct asset classes overall with this categorization: Strategic Asset Classes: Tactical Asset Classes:____________ U.S. Stocks (small, mid & large capitalization) Real Estate Stocks (REITs) International (non-US) Developed Market Stocks Emerging Market (non-U.S.) Stocks U.S. Bonds International (non-U.S.) Bonds Cash Equivalents Commodity-linked assets We define strategic asset classes as those used all the time in your balanced, global portfolio, and generally make up 75% or more of your total portfolio. We define tactical asset classes as those used when we believe economic conditions favor one or more, and these asset classes generally make up from 0% to 25% of your balanced, global portfolio. - 11 - Beacon Financial Advisors, Ltd.  The raison d'être of our investment strategy is it is based on articulating and accomplishing your financial life goals (see reasons for both financial planning and investment management in Advisory Business, Types of Advisory Services). This is important because it is distinguished from shortsighted strategies like trying to "beat the market." We use a logical, disciplined 7-step process to construct your investment portfolios. 1. Know Thy Client - Set your investment policy with your financial goals. 2. Take The Temperature - Assess capital markets and assign asset class targets. 3. Pick The Players - Select mutual fund partners. 4. Get Going - Implement your investment plan. 5. Times Are A’Changing - Monitor and respond to changed markets and changes in your financial status. 6. Buy Low, Sell High - Re-balance your portfolio. 7. How’d I Do? - Measure and present investment performance to you. We believe portfolio management is an evolving process that is also iterative or repetitive. After reaching the final step in our 7-step process, changed circumstances--often yours--may dictate a re-trace of earlier steps. Our booklet, Balanced, Global Portfolios Using Mutual Funds, describes the thoughtful investment process we use to manage your money. We highlight the major aspects of each step to offer you clearer insight and full disclosure into our investment management methodology and perspective (ask us for a complete copy of Balanced, Global Portfolios Using Mutual Funds). Our client service-brief Beacon's Approach To Client Service: TEAMWORK...Assigning The Team Members describes the role our mutual fund partners play as a member of your financial "team" and the role of other team members (accountant, attorney, etc.). Below are the roles for you, the client, and INVESTMENT PARTNERS, the mutual funds (ask us for a complete copy). THE CLIENT  Joe Q. & Joan G. Investor  Owner, Chairman and Chief Executive Officer  Highest authority on team  Entity to whom all team members are ultimately responsible and accountable (directly or indirectly)  Power to hire, fire all team members  Delegates certain well-specified functions to other team members INVESTMENT PARTNERS  Mutual Fund Managers, often institutional share classes  Hired by ADVISOR to perform industry and security analysis, issue selection, and currency management within a particular asset class for CLIENT’S portfolio  Outsourced Consultant  Reports investment results to ADVISOR and CLIENT  Recognizes ownership by CLIENT  Contracts with CUSTODIAN for shelf-space  Paid indirectly by CLIENT via operating expenses deducted from returns - 12 - Beacon Financial Advisors, Ltd.  Risk of Loss As an investor you are faced with a diverse universe of financial assets to build your investment portfolio. Many investors go about it thematically, something like this:  Growth is a goal, so I'll invest in stocks.  Income and stability are goals, so I'll invest in bonds.  Safety and liquidity are goals, so I'll invest in money market funds. This common approach seems logical, but we believe it is flawed, because for most investors all the goals above--growth, income, stability, safety, liquidity, etc.--are important and there is no one "right" type of investment. A bit later on we'll discuss why we favor asset allocation (i.e., diversification) that mixes different types of risky investments to reduce risk (our "balanced, global" approach). Before doing so, let's mention several prominent investment risks. All investment types or approaches or strategies have different risks that challenge investors. Investors contend with the following major investment risks depending on the security type (list is not all inclusive of every type of investment risk): Interest-rate Risk: Fluctuations in interest rates may cause investment prices to fluctuate. For example, when interest rates rise, yields on existing bonds become less attractive, causing their market values to decline. Market Risk: The price of a security (e.g., stock, bond, or the net asset value of a mutual fund) may decline in reaction to tangible and intangible events and conditions. This type of risk is caused by external factors independent of a security’s underlying fundamentals. For example, political, geopolitical, economic and social conditions may trigger market events. Inflation Risk: When any type of inflation is present, a dollar today will not buy as much as a dollar next year, because purchasing power is eroding at the rate of inflation. Currency Risk: Some international (non-US) investments are subject to fluctuations in the value of the dollar against the currency of the investment’s originating country. This is also referred to as exchange rate risk. Reinvestment Risk: This is the risk that future proceeds from investments may have to be reinvested at a potentially lower rate of return (i.e., interest rate). This primarily relates to fixed income securities (e.g., bonds). Business Risk: These risks are associated with an industry or a particular company within an industry. For example, oil-drilling companies depend on finding oil and then refining it, a lengthy process, before they can generate a profit. They carry a higher risk of profitability than an electric company, which generates its income from a steady stream of customers who buy electricity Technological no matter what the economic environment is like. - 13 - Beacon Financial Advisors, Ltd.  developments can render once profitable products less profitable or even obsolete, as another example. Liquidity Risk: Liquidity is the ability to readily convert an investment into cash. Generally, assets are more liquid if many traders are interested in a standardized product. For example, Treasury Bills are highly liquid, while real estate properties are not. Financial Risk: Excessive borrowing to finance a business’ operations increases the risk of profitability, because the company must meet the terms of its obligations in good times and bad. During periods of financial stress, the inability to meet loan obligations may result in bankruptcy and/or a declining market value. Beacon’s Approach to Risk Management BEACON'S VIEW: "We believe your greatest risk is exhausting your money before exhausting your time. While we cannot eliminate declines in the value of your total portfolio over short periods (volatility), we emphasize the long-term benefits of diversification and steadfastness to your plan as the best ways to manage your greatest risk." "A goal without a plan is just a wish." Antoine de Saint-Exupéry French Writer 1900-1944 We help you articulate and implement our investment strategy with full consideration to YOUR FINANCIAL LIFE thru TIME (chart below). YOUR FINANCIAL GOALS drive your policies of savings, investment, and spending. These set the foundation for establishing your investment return target and risk tolerance range. We run extensive SIMULATIONS to gauge the probability you will exhaust your money. After we determine your target return and risk, we then can allocate (diversify) your assets (more about risk and asset allocation to follow). "A plan without execution is just a dust bin." SOURCE: BEACON FINANCIAL ADVISORS, LTD. Beacon Financial Advisors, Ltd. 20XX FOR ILLUSTRATION PURPOSES - Charts, Graphics, Tables, and Text Boxes, etc. - dispersed throughout our BROCHURE are various visual aids we hope will assist your understanding of our services and investment strategies. These visual aids are not required by government rules to be in our BROCHURE. Furthermore, these visual aids do not depict or represent an actual client outcome, or promote specific advice. - 14 - Beacon Financial Advisors, Ltd.  Our approach to manage investment risk(s) is to consider risk from the perspective of your total portfolio. Our experience affirms our belief that your greatest risk is exhausting your money before exhausting your time. We believe the best way to create and preserve your money/wealth is to take advantage of risk. We noted previously in Investment Strategies the raison d'être of our investment strategy is that it is based on articulating and accomplishing your financial life goals in contrast to shortsighted efforts like "beating the market." For us the starting point is your Investment Policy Statement (IPS). Benefits of an Investment Policy Statement (IPS) - An IPS has a plethora of benefits for both Beacon and you. An IPS is to investing what a road map is to the vacationing -family on a cross-country trip, serving to plot the ultimate destination as well as the course. Perhaps the chief benefit is that an IPS helps avoid misunderstandings and paves a path for clear and open communication. Next, you are confronted with the realities of investing versus simply relying upon wishful thinking or unreasonable expectations. Beacon must get IN YOUR HEAD right from the start, and we spend time educating and informing you as necessary. After all, many of our clients are physicians, attorneys, business professionals, etc., not investment experts. Beacon benefits from the IPS in that we increase our understanding and appreciation of your concerns. We are able to move away from vague ideas and onto concrete, measurable targets. We learn your expectations and are better able to meet them through confident initial investing and ongoing management in accordance with your IPS. Features of an Investment Policy Statement (IPS) - The key areas that must be BRIDGED are your objectives and constraints. An IPS is not cast in concrete. We constantly review financial considerations with you that can impact and change your IPS. Your IPS affords substantive benefits. You can use the business cycle to your advantage and avoid the emotional swings of the differing winds of opinion. You will develop expectations aligned with your goals, and the ever-evolving investment climate. Circumstances will change, and surely there will be bumps in the road. After all, financial markets can be volatile. However, we believe if you make investment decisions based on your reasonable goals, you'll find that a road map makes the JOURNEY a lot more enjoyable to the DESTINATION of successful investing and financial independence. BEACON'S VIEW: VOLATILITY is meant to describe times when the value of assets in your portfolio decline in price (usually short-term). RISK is meant to describe the chances of not meeting your goals (principally long-term). We believe VOLATILITY can provide opportunity to rebalance your portfolio [a.k.a. buy low(er), sell high(er)]. - 15 - Beacon Financial Advisors, Ltd.  Bridging Components of Your Investment Policy Statement Your OBJECTIVES  Return  Risk Tolerance Your CONSTRAINTS  Need for Liquidity  Income Requirements  Time Horizon  Tax Considerations  Legal and Regulatory Issues  Personal Preferences Asset Allocation (i.e. diversification) - Asset allocation is to investing as interior painting is to home decorating. Homemakers take care to tastefully coordinate furniture and room accompaniments with the color of drapes and walls. The painter can mix and match paints and thinners to get just the right shade. Similarly, BEACON works hard to determine exactly what you want from your financial and investment plan. Afterwards, our asset allocation work signals our attempt to get just the right mix of investment risk and return suitable to your tastes. Asset allocation has three (3) dimensions and makes risk work for you: 1. Return - the rate of return, or total return, is the sum of all income, gains and losses in the period (realized and unrealized); return is generally the most understood dimension among investors. 2. Volatility - the measure of price movement in your portfolio from period to period, usually measured by the standard deviation of returns. BEACON pays lots of attention to assessing volatility. 3. Correlation - the degree to which assets in the portfolio move in concert with, or opposite of, each other. By selectively deploying and mixing weakly or poorly correlated, “risky” assets in a portfolio, the overall result to the entire portfolio can be something "less risky". BEACON'S VIEW: We believe it is always appropriate for you to remain diversified, and to maintain a long- term investment focus. BEACON will not deviate from your investment plan unless you mandate we do so by participating in making a change to your investment plan. - 16 - Beacon Financial Advisors, Ltd.  Disciplinary Information Here we describe there have been no legal and/or disciplinary incidents that involved us and clients, past or present. Legal and Disciplinary Beacon and its employees have not been involved in legal or disciplinary events related to clients, past or present. Other Financial Industry Activities and Affiliations Here we describe/explain any relationship or arrangement that is material to our advisory business or to you with related person and if the relationship or arrangement creates a material conflict of interest for you and us. Financial Industry Activities BEACON is not registered as a securities broker-dealer, or a futures commission merchant, commodity pool operator or commodity trading advisor. Affiliations BEACON has no relationship or arrangements that are material to our advisory business or you with a related person who is an investment company, other investment advisor, financial planning firm, commodity pool operator, commodity trading adviser or futures commission merchant, banking or thrift institution, accounting firm, law firm, insurance company or agency, pension consultant, real estate broker or dealer, or an entity that creates or packages limited partnerships. BEACON describes later in Brokerage Practices the arrangement we have with Schwab Advisor Services™ (formerly called Schwab Institutional®), a division of Charles Schwab & Co., Inc. (“Schwab”), a registered broker-dealer, member SIPC, as the qualified custodian. - 17 - Beacon Financial Advisors, Ltd.  Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Here we note that we are a fiduciary to you with a duty to act solely in your best interest. We have a written policies and procedures manual instructing our employees in practical ways to put your interests first. Code of Ethics The employees of BEACON have committed to a Code of Ethics that is available for review by you and prospective clients upon request. We will provide a copy of the Code of Ethics to you or prospective clients upon request. Our Code of Ethics includes the following core principles: Objectivity Full Disclosure Integrity and Honesty Competence Confidentiality Professionalism Regulatory Compliance Participation or Interest in Client Transactions BEACON does not act as a principal, broker, or agent regarding securities you buy or sell. We have no financial interest in any securities you buy or sell. As noted earlier in Methods of Analysis, Investment Strategies and Risk of Loss our recommendations to you exclusively include no-load mutual funds. BEACON does not have, nor expects to have, any mutual fund shares like those we recommend to you (e.g., stocks, bonds, etc.). As noted earlier in Advisory Business/Principal Owners, BEACON is a limited liability company (LLC) taxed like a partnership. Practically that means all net income flows to the LLC members. It is likely BEACON will have a bank account and/or a brokerage account with funds held in sweep and/or purchased money market funds for normal operating expenses. BEACON'S employees may buy or sell securities that are also held by clients. As noted above, our recommendations to you exclusively include no-load mutual funds. From a philosophical perspective, we believe in "eating our own cooking" meaning our employees personal portfolios may hold the same no-load mutual funds we recommend to you. We believe this approach more closely aligns interests between us and you concerning our role in your securities transactions. "...we believe in "eating our own cooking" meaning our employees personal portfolios may hold the same no-load mutual funds we recommend to you. We believe this approach more closely aligns interests between us and you concerning our role in your securities transactions." - 18 - Beacon Financial Advisors, Ltd.  Personal Trading The Chief Compliance Officer of BEACON is Joshua J. Hebert. He reviews all employee trades each quarter. As noted above in our "eat your own cooking" observation, since all employee trades are mutual fund trades, the trades do not affect or impact the securities markets. Brokerage Practices Here we describe the factors we consider in recommending brokerage firms and determine the reasonableness of their compensation (fees, commissions, etc.). Selecting Brokerage Firms Brokerage Firm(s) BEACON recommends/requires - BEACON does not maintain custody of your assets that we manage on which we advise (i.e., we don't have possession of your money). We may be "deemed" [by government regulations] to have custody of your assets if you give us authority to withdraw assets from your account such as remitting our fees from your accounts (see section on Custody). Your assets must be maintained in an account at a "qualified custodian," generally a broker- dealer or bank. BEACON recommends (and in some cases requires) that you use Charles Schwab & Co., Inc. (“Schwab”), a registered broker-dealer, member SIPC, as the qualified custodian. Schwab will hold your assets in a brokerage account and buy and sell securities when BEACON instructs them to. However, you will decide whether to open the account(s) with Schwab. BEACON does not open accounts for you. Rather, BEACON assists you in opening Schwab account(s), and in doing so you enter into an account agreement directly with Schwab. Some of your accounts that BEACON manages may be required to be held in custody at custodians other than Schwab. For instance, your employer's retirement account (e.g., 401k, 403b, 401a, 457b, etc.) is offered exclusively through an approved broker (e.g., Fidelity, TIAA-CREF, Vanguard, etc.) and you haven't the option to use Schwab. BEACON is independently owned and operated and is not affiliated with Schwab and has no compensatory arrangement with Schwab. BEACON does not receive fees or commissions from any of these arrangements with Schwab or any custodian/broker. How We Select Brokers/Custodians - BEACON seeks to use a custodian/broker that will hold your assets and execute transactions on terms that are, overall, most advantageous when compared to other available providers and their services. We consider a wide range of factors, including: - 19 - Beacon Financial Advisors, Ltd.  Combination of transaction execution services and asset custody services (generally without a separate fee for custody) Capability to execute, clear, and settle trades (buy and sell securities for your account). Capability to facilitate transfers and payments to and from accounts (wire transfers, check requests, bill payment, etc.) Breadth of available investment products (stocks, bonds, mutual funds, etc.), especially a large platform of no-load and institutional share class mutual funds. Quality of services, especially a dedicated group of professionals assigned to work exclusively with BEACON and you. Competitiveness of the price of those services (commission rates, margin interest rates, other fees, etc.) and willingness to negotiate the prices. Reputation, financial strength, security and stability. Prior service to BEACON and you. Products and Services Available to Us from Schwab: Schwab Advisor Services™ is Schwab's division serving independent investment advisory firms like BEACON. Schwab provides us and you with access to its institutional brokerage services (trading, custody, reporting, and related services), many of which are not typically available to Schwab retail customers. Schwab also makes available various support services. Some of those services help us manage or administer our clients' accounts. Schwab's support services generally are available on an unsolicited basis (we don't have to request them) and at no charge to us. Following is a more detailed description of Schwab's support services. Services That Benefit You - Schwab's Institutional brokerage services include access to a broad range of investment products, execution of securities transactions, and custody of client assets. The investment products available through Schwab include some to which we/you might not otherwise have access to or that would require a significantly higher minimum initial investment by our clients. Schwab’s services described in this paragraph generally benefit you and your account. Services that May Not Directly Benefit You - Schwab also makes available to us other products and services that benefit us but may not directly benefit you or your account. These products and services assist us in managing and administering our clients' accounts. They include investment research, both Schwab's own and that of third parties. We may use this research to service all or a substantial number of our clients' accounts. (Of note, while BEACON has access to this research via Schwab we do not rely only on this source. We may pay license fees directly to independent research to aid in our overall research effort). In addition to investment research, Schwab also makes available software and other technology that: Provide access to client account data (such as duplicate trade confirmations and account statements). - 20 - Beacon Financial Advisors, Ltd.  Facilitate trade execution. Provide pricing and other market data. Facilitate payment of our fees from our clients' accounts (as described in Fees and Compensation, Fee Billing). Assist with back-office functions, recordkeeping, and client reporting. Services That Generally Benefit Only Us - Schwab also offers other services intended to help us manage and further develop our business enterprise. These services include: Educational conferences and events. Consulting on technology, compliance, legal, and business needs. Publications and conferences on practice management and business succession. Schwab may provide some of these services itself. In other cases, it will arrange for third-party vendors to provide the services. Schwab may also discount or waive its fees for some of these services or pay all or part of a third party's fees. Generally, the services described in this paragraph are provided on a company-wide basis by Schwab and are not designed for BEACON’S exclusive use. BEACON does not accept offers that are exclusively for BEACON, such as occasional business entertainment Schwab may offer our personnel and those of other RIA firms. Our Perspective on Schwab's Services - The availability of these services from Schwab benefits us because we do not have to produce or purchase them. We don't have to pay for Schwab's services. These services are not contingent upon us committing any specific amount of business to Schwab in trading commissions or assets in custody. This may give us an incentive to recommend/require that you maintain your account with Schwab, based on our interest in receiving Schwab's services that benefit our business rather than based on your interest in receiving the best value in custody services and the most favorable execution of your transactions. This is a conflict of interest. We believe, however, that taken in aggregate our selection of Schwab as custodian and broker is in the best interests of our clients. Our selection is primarily supported by the scope, quality, and price of Schwab's services (as described previously in How We Select Brokers/Custodians) and not Schwab's services that benefit only us. Periodically BEACON negotiates with Schwab the terms of our Pricing Schedule as part of our Pricing Agreement with Schwab. While our Pricing Schedule includes terms for equities, mutual funds, options contracts, fixed income, etc., of interest to BEACON and our clients are the pricing terms for transaction-fee mutual funds. As BEACON seeks to use mostly institutional share class mutual funds, the Schwab transaction-fees are most applicable. Schwab has been responsive in extending to BEACON a Pricing Schedule that we consider competitive and beneficial to you (see Best Execution next page). - 21 - Beacon Financial Advisors, Ltd.  As described in Advisory Business, Firm Description, our client service-brief Beacon's Approach To Client Service: TEAMWORK...Assigning The Team Members has an easy-to-follow chart that describes the role Schwab plays as a member of your financial "team" and the role of other team members (accountant, attorney, etc.). On the top of the next page are the roles for you, the client, your other advisors, and Schwab, the broker/custodian, and (ask us for a complete copy): THE CLIENT  Joe Q. & Joan G. Investor  Owner, Chairman and Chief Executive Officer  Highest authority on team  Entity to whom all team members are ultimately responsible and accountable (directly or indirectly)  Power to hire, fire all team members  Delegates certain well-specified functions to other team members OTHERS  CPA, attorney, insurance, etc.  services for CLIENT’S financial plan (tax compliance, legal, insurance, etc.)  Receive coordination from ADVISOR  Consultant  Paid directly by CLIENT THE CUSTODIAN  Schwab Advisor Services  Hired by CLIENT via recommendation by ADVISOR  Chief Treasury & Compliance Officer  Guardian/safe keeper of CLIENT assets  Takes investment direction from ADVISOR (Beacon) as “Investment Manager” for CLIENT  Recognizes ownership by CLIENT  Monthly statement to CLIENT  Paid indirectly by client via transaction fees for security purchases and sales Best Execution BEACON reviews the execution of trades at Schwab each morning after trades are placed. Normally if a problem arises Schwab will contact us before executing the trade. Trading fees charged by Schwab are also reviewed on this schedule. BEACON does not receive any portion of the trading fees. Your Brokerage and Custody Costs - For our clients' accounts that Schwab maintains, Schwab does not charge you separately for custody services but is compensated by charging you commissions or other fees on trades that it executes or that settle into your Schwab account. We negotiated Schwab's commission rates applicable to your - 22 - Beacon Financial Advisors, Ltd.  client accounts. This negotiation benefits you because the overall commission rates you pay are lower than they would be otherwise. Normally your accounts will consist entirely of mutual fund shares, and BEACON exclusively uses only "no-load" mutual funds. In some instances, with small dollar trades, the mutual funds we buy are part of Schwab's One Source platform and there is no commission (or transaction fee) paid to Schwab by your account. In other instances, the mutual funds we buy are subject to nominal transactions fees paid by your account to Schwab. Presently regardless of the $ size of the purchase or sale we make in your account in our selected institutional share-class mutual funds your Schwab transaction fee will not exceed $18/trade. Soft Dollars Presently BEACON does not have any soft dollar arrangements with any third parties, including Schwab, other than those services described in Selecting Brokerage Firms. Order Aggregation As previously noted, BEACON exclusively uses no-load mutual funds in your accounts that we direct (discretionary). Since all these trades are mutual funds trade aggregation is not applicable to you. Review of Accounts Here we describe our method of reviewing your accounts, the frequency and nature of the reviews, the persons that perform the reviews, and how we report to you. Periodic Reviews Account reviews are performed by principal Joshua J. Hebert. Our review/monitoring process benchmarks your current portfolio versus your target portfolio as identified in your Investment Policy Statement (IPS). Our review process includes a daily review of all transactions affecting each account. On a daily basis your accounts are reconciled on a value and cost basis method by electronic means between our portfolio accounting/management system and the broker records of our primary brokerage Schwab Advisor Services. Account reviews are performed more frequently when market conditions dictate. Review Triggers Other conditions that may trigger a review are changes in the tax laws, new investment information, and changes in your own situation. - 23 - Beacon Financial Advisors, Ltd.  Regular Reports Our method of client reporting is providing you your own online, secure Client Portal and Document Vault (see illustration below). This is in addition to the normal brokerage statements you will receive from the custodian (e.g., Schwab) for your accounts typically on a monthly basis. Your online Client Portal includes numerous reports including performance, capital flows, holdings, realized gains & losses, transactions and projected income for your total portfolio as well as each account that makes up your total portfolio. FOR ILLUSTRATION PURPOSES below is a visual of your Client Portal - 24 - Beacon Financial Advisors, Ltd.  Client Referrals and Other Compensation Here we explain that we do not pay or receive referral fees. Incoming Referrals BEACON has received many client referrals over the years. The referrals are from current clients, estate planning attorneys, accountants, employees, personal friends of employees and other similar sources. The firm does not compensate referring parties for these referrals. Referrals Out BEACON does not accept referral fees or any form of remuneration from other professionals when a BEACON prospect or client is referred to them. Other Compensation BEACON does not receive any other monetary compensation from any third party aside from your fees for our services. We receive an economic benefit from Schwab in the form of the support products and services it makes available to us and other independent investment advisors whose clients maintain their accounts at Schwab. You do not pay more for assets maintained at Schwab as a result of these arrangements, yet we benefit from the referral arrangement, so this is a conflict of interest. These products and services, how they benefit us, and the related conflicts of interest are described above in Brokerage Practices. The availability to us of Schwab's products and services is not based on us giving particular investment advice to you, such as buying securities for you. Custody Here we explain that we are not a qualified custodian and normally* do not have actual custody of your assets. We note the importance of your comparing the brokerage statements with any reports we provide you. Account Statements All your investments are held at qualified custodians like Schwab, which means the custodians provide account statements directly to you at your email or postal address of record at least quarterly and in most instances monthly. You should carefully review those statements promptly when you receive them. - 25 - Beacon Financial Advisors, Ltd.  Custodians like Schwab maintain actual custody of your assets. As noted above your custodian will send account statements to you. As noted below, you are urged to compare your account statements received directly from your custodian to the Client Portal reports we provide to you. You may have authorized our quarterly advisory fees be debited (e.g., withdrawn) from your investment account--*government regulations deem us to have custody in this instance. We provide you with a quarterly Fee-For-Service Schedule in your Client Portal Document Vault that details the fee calculation. We are not required to provide your Fee-For-Service Schedule to Schwab, and Schwab does not verify the accuracy of our advisory fee calculation. Performance Reports You are urged to compare your account statements received directly from the custodians (e.g., Schwab) to your Client Portal provided by BEACON. Previously in Review of Accounts/Regular Reports, we described the reports we customarily provide in your online, secure Client Portal. As a footnote on your Client Portal, we place the following legend as a reminder to you to compare/contrast: "Clients are urged to compare the custodians (Schwab et al) account statements with your Client Portal monthly ending values". Net Worth Statements We periodically provide many clients with net worth statements and net worth graphs that are generated from our CRM system (client relationship management). Net worth statements contain approximations of bank account balances and/or held- away accounts provided by you, as well as the value of land and hard-to-price real estate. The net worth statements are used for long-term financial planning where the exact values of assets are not material to the financial planning tasks. Investment Discretion Here we explain that when you give us authority to manage securities in your account(s) we exercise this authority consistent with your investment policy we helped you prepare. Discretionary Authority for Trading As discussed previously in Advisory Business/Asset Management, you normally will place your assets in a brokerage account designated as a discretionary account. BEACON accepts discretionary authority to manage securities accounts on your behalf. BEACON has the authority to determine, without obtaining your specific - 26 - Beacon Financial Advisors, Ltd.  consent, the securities to be bought or sold, and the amount of the securities to be bought or sold. At any time, you may contact us if there are any changes in your financial situation or investment objectives, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. You approve the custodian to be used when you open your brokerage account(s). BEACON does not receive any portion of the transaction fees or commissions paid by you to the custodian on executed trades. Discretionary trading authority facilitates placing trades in your accounts on your behalf so that we may promptly implement the investment policy that you have approved in writing. As discussed previously in Advisory Business/Asset Management, there are instances when you could have a brokerage account designation as non-discretionary. In that case we do not have authority to buy or sell securities. Limited Power of Attorney A limited power of attorney is a trading authorization for the purpose of authorizing us to have investment discretion. You sign a limited power of attorney so that we may execute the trades that you have approved. The limited power of attorney is part of the brokerage account application you open with the custodian. Voting Client Securities Here we describe our role in voting proxies for you in certain circumstances, and those when you can vote your proxies. Proxy Votes A proxy is a designated person acting for you. Whether you own common stock (shares) of a company or shares in a mutual fund, there are times when you have the right to vote on matters put before shareholders. The matters can range from financial issues to social issues, or can be as straightforward as voting to ratify or not the board of directors, or the outside accounting firm or legal counsel, etc. If you so designate on your brokerage application, BEACON votes proxies for mutual fund securities over which it maintains discretionary authority consistent with our proxy voting policy. The brokerage application addresses proxy voting with language like "Issuer Communications and Related Actions." If you do not designate for us to vote your proxy, that remains your duty. In this case the custodian will provide you with the proxy materials. A free copy of the BEACON proxy voting policy is available upon request. - 27 - Beacon Financial Advisors, Ltd.  Financial Information Here we disclose our general financial condition. Financial Condition BEACON does not have any financial impairment that will preclude us from meeting engagement commitments to you. Regulations require we provide you with our balance sheet in certain circumstances. In our case, a balance sheet is not required to be provided because BEACON does not serve as a custodian for your funds or securities and does not require prepayment of fees of more than $1,200 per client six months or more in advance. Neither BEACON nor any of our principals or employees has ever been the subject of a bankruptcy petition. - 28 - Beacon Financial Advisors, Ltd.  Brochure Supplement (Part 2B of Form ADV) Education and Business Standards BEACON requires that advisors in its employ have a bachelor's degree and further coursework demonstrating knowledge of financial planning and investment management. Examples of acceptable coursework include: an MBA, a CFP®, a CFA, etc. Additionally, advisors must have work experience that demonstrates their aptitude for financial planning and investment management. Professional Certifications Employees (present and past) have earned certifications and credentials that are required to be explained in further detail. Certified Financial Planner (CFP®): Certified Financial Planners are licensed by the CFP Board to use the CFP mark. CFP certification requirements: Bachelor’s degree from an accredited college or university. Completion of the financial planning education requirements set by the CFP Board (www.cfp.net). Successful completion of the 10-hour CFP® Certification Exam. Three-year qualifying full-time work experience. Successfully pass the Candidate Fitness Standards and background check. Chartered Financial Analyst (CFA): Chartered Financial Analysts are licensed by the CFA Institute to use the CFA mark. CFA certification requirements: Hold a bachelor's degree from an accredited institution or have equivalent education or work experience. Successful completion of all three sequential, six-hour exam levels of the CFA Program. Have 48 months of acceptable professional work experience in the investment decision-making process. Fulfill society requirements, which vary by society. Unless you are upgrading from affiliate membership, all societies require two sponsor statements as part of each application; these are submitted online by your sponsors. Agree to adhere to and sign the Member's Agreement, a Professional Conduct Statement, and any additional documentation requested by CFA Institute (www.cfainstitute.org). - 29 - Beacon Financial Advisors, Ltd.  CFA Background: The CFA charter is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute--the largest global association of investment professionals. There are currently about 150,000 CFA charter holders working in more than 165 countries and regions. High Ethical Standards: The CFA Institute Code of Ethics and Standards of Professional conduct, enforced through an active professional conduct program, require CFA charter holders to: Place their clients' interests ahead of their own Maintain independence and objectivity Act with integrity Maintain and improve their professional competence Disclose conflicts of interest and legal matters Global Recognition: Passing the three CFA exams is a difficult feat that requires extensive study (successful candidates report spending an average of 300+ hours of study per level). Earning the CFA charter demonstrates mastery of many of the advanced skills needed for investment analysis and decision making in today's quickly evolving global financial industry. As a result, employers and clients are increasingly seeking CFA charter holders--often making the charter a prerequisite for employment. Additionally, regulatory bodies in numerous countries recognize the CFA charter as a proxy for meeting certain licensing requirements, and more than 125 colleges and universities around the world have incorporated a majority of the CFA Program curriculum into their own finance courses. Comprehensive and Current Knowledge: The CFA Program curriculum provides a comprehensive framework of knowledge for investment decision making and is firmly grounded in the knowledge and skills used every day in the investment profession. The three levels of the CFA Program test a proficiency with a wide range of fundamental and advanced investment topics, including ethical and professional standards, fixed-income and equity analysis, alternative and derivative investments, economics, financial reporting standards, portfolio management, and wealth planning. The CFA Program curriculum is updated every year by experts from around the world to ensure that candidates learn the most relevant and practical new tools, ideas, and investment and wealth management skills to reflect the dynamic and complex nature of the profession. To learn more about the CFA charter, visit www.cfainstitute.org. - 30 - Beacon Financial Advisors, Ltd.  ADVISOR(S): Note: BEACON uses a team-approach to manage your portfolios. Furthermore, we have an investment method that is applied consistently to all our clients' portfolios. Said another way, no advisor provides their own investment advice to you apart from the BEACON method. JOSHUA J. HEBERT, CERTIFICATIONS Educational Background: Year of birth: 1982. Institutions (after high school): 2000 - 2004: Louisiana State University, Baton Rouge, Louisiana. Bachelor of Science, Accounting. 2007 - 2009: University of Houston, Houston, Texas. Masters (MBA), Finance. 2004 - 2005: Institute of Internal Auditors (IIA) Certified Internal Auditor (CIA®) – certification NOT active. 2010 - 2011: Certified Financial Planner Board of Standards, Inc. St. Thomas University, Houston, Texas. Certified Financial Planner licensee (CFP®) Business Experience (preceding 5 years): Beacon Financial Advisors, Ltd. (Houston, Texas) principal 2004 - 2007: Ernst & Young, LLP, (Houston, Texas) Auditor. 2007 - Present: and Advisor. Disciplinary Information: None. Other Business Activities: None. Additional Compensation: None. Supervision: JOSHUA J. HEBERT is a BEACON PRINCIPAL and CHIEF COMPLIANCE OFFICER. He reviews all firm work through frequent office interactions as well as remote interactions. He also reviews firm activities through our client relationship management system. Josh’s contact information is josh@bfaltd.com; 713.622.9981 ext. 12 - 31 - Beacon Financial Advisors, Ltd.