CLS Financial Advisors Inc

Item 5: Fees and Compensation

We are fee-only advisors, meaning we are compensated only by our clients and do not receive
compensation or commissions from any other parties. We believe this method of compensation
minimizes conflicts of interest. We base our fees on hourly charges, fixed fees, and a percentage of
assets under management which are described below.

Compensation – Investment Management Services
Our investment management fees are as follows:

If total assets are under $1,000,000, the annual fee schedule is:

                  Total Assets Under Management                 Annual Fee
                                                            1.25% per annum or
                           $0 to $1,000,000
                                                          $9,000, whichever is less

If total assets are over $1,000,000, the annual fee schedule is:

                    Total Assets Under Management                   Annual Fee
                          First $0 to $1,000,000                      $9,000
                 Plus amounts $1,000,000 to $3,500,000                0.75%
                      Plus amounts over $3,500,000                    0.50%

The asset-based fee is billed on a quarterly basis, in arrears, based upon the market value of the
Household Assets, including cash, on the last day of the quarter as valued by the custodian.

Generally, our minimum annual fee for Investment Management services is $9,000.

Calculation of Fees and Payments
The specific manner in which we charge fees is established in a client’s written agreement with us.
For first-year clients, the fee will be based on the market value of the account as of the day we
were able to view the account at the custodian holding the client’s assets. Fees for partial quarters
at the beginning or termination of the agreement will be prorated.

In consideration of our services, the client will pay us a quarterly fee billed at the end of the
quarter paid directly to us from the assets held in the portfolio. The client agrees to execute any
authorization(s) required by any Custodian in furtherance of the direct fee deduction
arrangement. Alternatively, the quarterly fee may be paid by invoice with payment due within 30
days from the date of the invoice. A late fee of 1.5% per month is charged upon any balance
unpaid within one month of the invoice date. The fee will be calculated quarterly based on the
market value of the account on the last trading day of the previous calendar quarter.

We may modify the terms of the fee agreement by giving clients 30 days written notice in
advance.

All invoiced balances due, per the calculations shown above, are rounded either up or down to the
nearest dollar.

Compensation – Limited Consulting Services
Consulting fees will be charged in one of two ways:

   •   As a fixed fee, typically ranging from $1,000 to $10,000, depending on the nature and
       complexity of each client’s circumstances, or
   •   On an hourly basis of $350 per hour.

All consulting fees are due in arrears, upon completion of the services.

Other Fees
There are no additional types of fees or expenses that our clients pay in connection with the
delivery of advisory services.

Cash Balances
Some of your assets may be held as cash and remain uninvested. Holding a portion of your assets
in cash and cash alternatives, i.e., money market fund shares, may be based on your desire to have
an allocation to cash as an asset class, to support a phased market entrance strategy, to facilitate
transaction execution, to have available funds for withdrawal needs or to pay fees, or to provide
for asset protection during periods of volatile market conditions. Your cash and cash equivalents
will be subject to our investment advisory fees unless otherwise agreed upon. You may experience
negative performance on the cash portion of your portfolio if the investment advisory fees
charged are higher than the returns you receive from your cash.

General Information on Compensation and Other Fees
In certain circumstances, fees, account minimums and payment terms are negotiable depending
on client’s unique situation – such as the size of the aggregate related party portfolio size, family
holdings, low-cost basis securities, or certain passively advised investments and pre-existing
relationships with clients. Certain clients may pay more or less than others depending on the
amount of assets, type of portfolio, or the time involved, the degree of responsibility assumed,
complexity of the engagement, special skills needed to solve problems, the application of
experience and knowledge of the client’s situation.

Our 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, odd-lot differentials, 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.

Such charges, fees and commissions are exclusive of and in addition to our fees, and we shall not
receive any portion of these commissions, fees, and costs.

All fees paid to us for investment advisory services are separate and distinct from the fees and
expenses charged by mutual funds to their shareholders. These fees and expenses are described in
each fund’s prospectus. These fees will generally include a management fee, other expenses, and
a possible distribution fee. If the fund also imposes sales charges, a client may pay an initial or
deferred sales charge.

A client could invest in a mutual fund directly, without our services. In that case, the client would
...

Types of Clients
We provide investment advice to individuals, high net worth individuals and trusts. Our clients are
generally professionals, business owners, corporate executives or retirees. However, there is no
“typical” client. When working with us, clients must be willing to be involved in the planning,
implementation, and monitoring processes. It is our belief that this level of involvement helps
them gain a sense of empowerment and security so that they are informed about their
investments. Although our clients are involved in the planning process, it need not be time-
consuming on an ongoing basis. We work with clients to plan how much time they want to devote
to the process.

Account Minimums
Clients receiving ongoing investment management services will generally be assessed a $9,000
minimum annual fee. Clients with assets below the minimum account size may pay a higher
percentage rate on their annual fees than the fees paid by clients with greater assets under
management.