Capital Financial LLC

Item	5	–	Fees	and	Compensation

Asset	Allocation	And	Portfolio	Management	Services:

CF's	annual	fee	for	these	services	is	a	percentage	of	the	client’s	assets	under	the	firm’s
management.	This	is	the	standard	fee	schedule:

    Up	to	$500,000	                                      1.0%

    $500,001	to	$1,000,000	                              0.8%

    $1,000,001	to	$5,000,000	                            0.5%

    $5,000,001	and	above	                                0.3%

These	are	marginal	rates.	For	example,	an	account	valued	at	$1,250,000	would	pay,	under
the	fee	schedule	above,	1.0%	on	the	first	$500,000,	plus	0.8%	on	the	next	$500,000,	plus
0.5%	on	the	remaining	$250,000.		These	fees	are	negotiable	at	the	sole	discretion	of	the	firm.
The	fee	to	be	charged	each	client	will	be	stipulated	within	each	client’s	advisory	agreement
and	 will	 apply	 to	 all	 assets	 of	 the	 client	 or,	 if	 stipulated	 in	 the	 agreement,	 the	 client's
household.

Clients	are	billed	in	advance,	either	monthly	or	quarterly,	depending	on	the	asset	class	and
custodian,	and	as	specified	in	the	client's	advisory	agreement.		For	any	client	who	engages	CF
during	a	billing	period,	the	investment	advisory	fee	is	assessed	pro	rata	from	the	inception
date	of	the	account(s)	to	the	end	of	the	billing	period.		CF	generally	requires	clients	to	instruct
the	custodian	to	debit	CF's	advisory	fees	from	the	client's	account.		In	special	cases,		in	its	sole
discretion,	CF	will	agree	to	invoice	clients	for	the	fee	due.

Cash	Management	Strategy	And	Planning	Services	For	Membership	Associations:

CF	 is	 compensated	 for	 this	 investment	 advice	 by	 a	 percentage	 of	 the	 client	 membership
association’s	assets	under	CF’s	management.	CF’s	standard	fee	is	35	bps	(0.35%)	per	year;
these	fees	are	negotiable	in	CF’s	sole	discretion.	The	fee	to	be	charged	each	client	is	specified
in	the	advisory	agreement	with	the	client.	Fees	are	billed	in	arrears	on	either	a	monthly	or
quarterly	 basis.	 CF	 receives	 written	 authorization	 from	 the	 client	 to	 deduct	 advisory	 fees
from	the	account	held	with	a	qualified	custodian.	CF	sends	the	qualified	custodian	notice	of
the	amount	of	the	fee	to	be	deducted	from	the	client’s	account	and	sends	the	client	an	invoice

itemizing	the	fee	amount	and	formula	used	to	calculate	the	fee,	the	amount	of	assets	under
management	upon	which	the	fee	is	based,	and	the	time	period	corresponding	to	the	fee.	Fees
charged	by	the	qualified	custodian	are	paid	by	CF	and	not	the	client.

GENERAL	INFORMATION	ABOUT	FEES	APPLICABLE	TO	ALL	CLIENTS

Custodian	 Statements.	 Each	 client's	 qualified	 custodian(s)	 sends	 account	 statements	 to
clients	at	least	quarterly.	The	statements	show	all	transactions,	including	the	deduction	of
advisory	fees.

Additional	Fees	And	Expenses.	In	addition	to	CF's	investment	advisory	fees,	asset	allocation
and	portfolio	management	clients	will	pay	direct	and	indirect	expenses	including	custodians'
charges	 for	 commissions,	 transaction	 fees,	 service	 fees,	 AssetMark's	 Platform	 Fee,	 asset-
based	custody	fees,	and	all	other	fees	described	in	the	custodial	agreement.	Clients	will	also
incur	 charges	 imposed	 by	 other	 third-parties	 in	 connection	 with	 the	 client's	 investments,
including	mutual	fund	fees,	confirmation	fees,	surcharges,	fees	charged	by	third	party	money
managers	 or	 sub-account	 managers,	 clearing,	 custody	 and	 other	 transaction	 charges	 and
service	fees,	and	IRA	and	Qualified	Retirement	Plan	fees.

CF	has	a	shareholder	service	agreement	with	one	money	market	mutual	fund	provider	and
receives	compensation	from	the	mutual	fund	company	in	the	amount	of	25	bps	(0.25%)	per
year	based	on	the	client’s	average	invested	balance	in	the	fund.		To	ensure	that	this	does	not
create	a	conflict	of	interest,	CF	credits	this	compensation	directly	against	the	advisory	fees
that	the	client	would	otherwise	have	paid	CF	on	these	assets,	and	CF	waives	the	remainder
of	the	advisory	fee	that	would	otherwise	be	due	to	CF	on	account	of	these	assets.

Fee	Differentials.	As	indicated	above,	CF's	fees	are	negotiable	at	the	firm's	discretion.	As	a
result,	any	client	could	pay	fees	that	are	higher	or	lower	than	the	fees	charged	to	other
clients,	based	upon	the	market	value	of	their	assets,	the	complexity	of	the	engagement,	and
the	level	and	scope	of	the	overall	investment	advisory	and/or	consulting	services	to	be
rendered.	As	a	result	of	these	factors,	the	services	to	be	provided	by	CF	to	any	particular
client	could	be	available	from	other	advisers	at	lower	fees.	All	clients	and	prospective
clients	should	be	guided	accordingly.

Termination.	All	advisory	agreements	may	be	terminated	as	set	forth	in	the	advisory
agreement.	For	any	client	whose	engagement	with	the	Firm	terminates	during	a	month,	CF's
fee	is	assessed	pro	rata	through	and	including	the	date	of	termination.	Fees	will	be	debited
from	the	client's	account	or,	if	fees	remain	due	and	payable	after	the	client's	assets	transfer,
clients	will	receive	an	invoice	with	the	amount	due.	Any	transactional	or	custodial	charges
levied	by	the	custodian	after	the	termination	of	the	advisory	agreement	will	remain	the
client’s	responsibility	and	not	the	responsibility	of	CF.	CF	has	no	obligation	to	refund	third-
party	fees	to	its	clients.

Item	7	–	Types	of	Clients

CF	provides	asset	allocation	and	portfolio	management	services	for	business	organizations,
membership	 associations,	 not-for-profit	 associations	 individuals	 and	 high	 net	 worth
individuals.

CF	 provides	 cash	 management	 strategy	 and	 planning	 services	 only	 to	 membership
associations,	including	community	associations,	not-for-profit	associations	and	labor	unions.