American Financial Management Ltd

Item 5: Fees and Compensation
Method of Compensation and Fee Schedule
 MUTUAL FUND/VARIABLE ANNUITY
 All management fees and minimum account sizes are subject to negotiation. Client will not
 be charged over 2.0 % of Asset Under Management.
 The specific manner in which management fees are charged is established in a client’s
 written investment advisory agreement with AFM. Clients choose to be billed directly for
 management fees or to authorize AFM to directly deduct the management fees from their

managed or other accounts. The only payment frequency available for new clients is
quarterly. Legacy clients that previously selected annual or semi-annual payment
frequency will continue to billed as such,
In addition, clients may pay varying management fee amounts dependent upon the
investment advisory representative or third-party promoter with whom they have
contracted at AFM. AFM Investment Advisory Agreements are renewable at the client’s
discretion.
Annual Management Fee Schedule:
   A. shall be payable in arrears upon execution of the investment advisory agreement;
   B. based on the principal amount per contract invested;
   C. for subsequent year, shall be based on the market value of the account on the
      calendar quarter end (3/31, 6/30, 9/30, or 12/31).
Semi-Annual Management Fee Schedule:
   A. shall be payable in advance or arrears upon execution of the investment advisory
      agreement;
   B. shall be based on the principal amount per contract invested due by each semi-
      annual anniversary date, and based on the market value of the account On the
      calendar quarter end (3/31, 6/30, 9/30, and/or 12/31);
   C. shall be payable at .50% (one half) of the annual fee every six months, based on the
      market value of the account on 3/31, 6/30, 9/30, and/or 12/31).
Quarterly Management Fee Schedule:
   A. shall be payable in advance or arrears upon execution of the investment advisory
      agreement;
   B. shall be based on the principal amount per contract invested and pro-rated to the
      end of the next quarterly billing cycle;
   C. is payable at .25% (one quarter) of the annual fee at the beginning of each calendar
      quarter, based on the market value of the account on 3/31, 6/30, 9/30, or 12/31).
Refund Policy for Prepaid Fees:
Upon termination of any managed account, any prepaid, unearned management fees will be
promptly refunded, and any earned, unpaid fees will be due and payable. Refunds are
calculated on a pro-rata basis.
American Financial Managements fees are exclusive of brokerage commissions, transaction
fees, and other related costs and expenses which shall be incurred by the client. Clients may
incur certain charges imposed by custodians, brokers, third- party investment and other
third- parties such as fees charged by managers, custodial fees, deferred sales charges,
transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage
accounts and securities transactions. Mutual funds and exchange traded funds also charge
internal management fees, which are disclosed in a fund’s prospectus. Mutual funds and
variable annuities can pay commissions to their investment advisers, and certain funds and
variable annuities have other types of fees or charges, including 12b-1, administrative or
shareholder servicing fees, early redemption or certain other fees.

Such charges, fees and commissions are exclusive of and in addition to AFM’s
management’s fee, and American Financial Management shall not receive any portion of
these commissions, fees, and costs.
Risk Considerations: The concept of exchanging investments between one mutual
fund/variable annuity contract sub-account to another may result in profits and losses and
AFM cannot guarantee the results or that the objectives of the Asset Allocation/Risk
Management contract will be met. The client may have tax consequences inherent in each
such exchange. Market volatility may affect or limit the ability of AFM to exchange between
mutual funds/variable contract sub-accounts on a basis that is timely regarding price
trends and, as with any investment, especially volatile ones, discretion may be exercised
not to switch between mutual funds/variable annuity contract sub-accounts.
Foreign-based investments may include currency exchange rates as additional non-market-
based considerations. Political stability of countries may also influence, limit or preclude
the option to switch between investments. Client agrees to consider personal risk tolerance
and financial goals in assessing this Asset Allocation/Risk Management program and ability
to sustain a loss. Exchanges between mutual fund/variable annuity contract sub-accounts
are not made based upon a client's personal or individual needs and the assessment should
be made by the client in consultation with the client's investment advisor representative or
third-party promoter.
ASSET MANAGEMENT/ PARTICIPANT ACCOUNT MANAGEMENT
AFM offers discretionary direct asset management services to advisory Clients. AFM
charges an annual investment advisory fee based on the total assets under management
that will not exceed 2.0%.

 This is a flat rate schedule, the entire portfolio is charged the same asset management fee.
 For example, a Client with $1,000,000 under management would pay $20,000 on an
 annual basis. $1,000,000 x 2.0% = $20,000.
The annual fee is negotiable 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.). AFM considers cash to be an asset class, and as such is included in fee
calculations. Also, to be noted, at times fees will exceed the money market yield. Fees are
billed quarterly in arrears or advance based on the amount of assets managed as of the
close of business on the last business day of the previous quarter.
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Item 7: Types of Clients
Description
 AFM generally provides investment advice to individuals, pensions and profit-sharing
 plans. Client relationships vary in scope and length of service.
Account Minimums
 AFM does not require a minimum to open or maintain an account.