accounts, including those accounts not managed by Avalon. These services include:
• Advise and assist in the development of an investment policy statement including the determination of short- and long-term investment goals, downside risk tolerance, target returns and asset allocation ranges.
• Provide multi-manager advice based solely on information that is readily accessible through public sources or provided to Avalon by the Private Client for this purpose. The Private Client will make the final decision whether to engage any investment manager.
• Provide advice regarding the timing of an investment in various asset classes as outlined in the investment policy statement.
• Provide advice regarding rebalancing strategies and tactical shifts in the asset allocation.
• Provide consolidated reports of investments and performance measurement based on information supplied by the Client.
• Coordinate with third-party providers (tax professionals, estate attorneys, etc.) as needed. CONSULTING SERVICES Upon a Private Client’s request, Avalon will consult with and provide guidance to certain institutional clients that wish to evaluate existing service providers and investment managers. Services include:
• Evaluate existing investment consulting arrangements, providing an overview of services and associated costs
• Comparison of other investment consultants
• Negotiation or re-negotiation of fees
• Analysis of third-party managers and their associated fees
• Analysis of third-party service providers and their associated fees Sub-advisory Engagements Avalon also serves as a sub-advisor to unaffiliated registered investment advisors per the terms and conditions of a written Sub-advisory Agreement. With limited exception, the unaffiliated investment advisors that engage Avalon's sub-advisory services will maintain both the initial and ongoing day to-day relationship with the underlying client, including initial and ongoing determination of client suitability for Avalon's designated investment strategies. If the custodian/broker-dealer is directed by the unaffiliated investment advisor, Avalon will be unable to negotiate commissions and/or transaction costs, and/or seek best execution by selecting broker-dealers to execute client transactions that offer better pricing or execution quality. As a result, a client could pay higher commissions or other transaction costs or greater spreads or receive less favorable net prices on transactions than would otherwise be the case through alternative clearing arrangements recommended by Avalon. Higher transaction costs adversely impact account performance. Wrap/Separate Managed Account Program Engagements If Avalon is engaged to provide investment advisory services as part of an

unaffiliated wrap-fee program, Avalon will be unable to negotiate commissions and/or transaction costs and/or seek best execution. Under a wrap program, the wrap program sponsor arranges for the participant to receive investment advisory services, the execution of securities brokerage transactions, custody and reporting services for a single specified fee. Participation in a wrap program could cost the participant more or less than purchasing such services separately. The program sponsor will determine the broker-dealer through which transactions must be effected and the amount of transaction fees and/or commissions paid by the participant investor accounts. Please note: With limited exception, in these types of engagements the unaffiliated investment advisors that engage Avalon's services will maintain both the initial and ongoing day-to-day relationship with the underlying investor, including initial and ongoing determination of the investor’s suitability for Avalon's designated investment strategies. In addition, since the custodian/broker- dealer is determined by the unaffiliated program/platform sponsor, Avalon will be unable to negotiate commissions and/or transaction costs, and/or seek best execution by selecting broker- dealers to execute client transactions that offer better pricing or execution quality. As a result, the investor could pay higher commissions or other transaction costs or greater spreads or receive less favorable net prices, on transactions than would otherwise be the case through alternative clearing arrangements recommended by Avalon. Higher transaction costs adversely impact account performance. CLIENT ASSETS UNDER MANAGEMENT As of December 31, 2022, the Firm had $7.302 billion under management. This includes: (1) $7.024 billion of discretionary assets; and (2) $278 million of non-discretionary assets. Fees for Private Clients depend, in part, upon whether the client chooses an allocation across asset classes and pays the Advisory Fee (as defined below) and fees for Avalon Private Funds and Private Funds (a “Product Fee”) or chooses a single asset class and pays one or more Product Fees. As noted above, Since Avalon advises Private Clients on their asset allocation in light of that person’s circumstances, each Private Client’s total fees will vary depending on Avalon’s advice. Avalon’s Private Client contracts allow for termination without penalty upon 30 days written notice, or as otherwise stated in the contract. AVALON ADVISORY FEE Recognizing the advisory-oriented nature of our services for many of our clients, we instituted the Avalon Advisory Fee (“Advisory Fee”). Avalon generally manages assets for clients seeking discretionary advisory services. We have an experienced team of Investment Management