Cumberland Advisors LLC

ITEM 5 – FEES AND COMPENSATION

A. Advisory Fees and Compensation

Investment Advisory Fees
Cumberland Advisors charges an advisory fee (the “Advisory Fee”) to its direct investment advisory clients,
in accordance with the fee schedules set forth below.

The investment management fees that Cumberland Advisors charges are typically negotiated with each client.
Cumberland Advisors takes into account the complexity and type of securities portfolios the client is
interested in when considering the amount of fee charged. The fees stated below represent the maximum fee
that may be charged for each type of portfolio. The fee that Cumberland Advisors and the client agree upon
can be found in the documents in Cumberland Advisors’ client files. Cumberland Advisors also manages
money as a subadvisor through other firms’ platforms and programs. The fees charged in these programs can
be found in the disclosure documents for each program.

Investment Management Fees:

    •   Exchange-Traded Fund (ETF) Portfolios – Maximum Annual Fee Charged – 100 basis points (1.00%)
    •   Balanced Portfolios – Maximum Annual Fee Charged – 75 basis points (0.75%)
    •   Active/Passive Portfolios – Maximum Annual Fee Charged - 60 basis points (.60%)
    •   Fixed Income Portfolios- Maximum Annual Fee Charged – 52.5 basis points (.525%)

Model Delivery Fees
Cumberland Advisors may charge fees for the delivery of portfolio construction and/or buy and sell signals to
certain customers or other investment advisors. The fees for this service will be individually negotiated with
the other party and will be billed quarterly in advance.

B. Payment of Fees

Investment advisory clients are typically billed in advance for advisory fees on a quarterly basis in the first
month of each quarter. Accounts billed in arrears are an exception and determined by custodian rules.
Generally, new accounts that are opened during the quarter are billed when released for trading and additional
deposits during the quarter generate interim invoices. Accounts that are closed during the quarter generate
interim credit invoices or refunds. [Set forth below is additional detail related to Cumberland Advisors’
quarterly billing process]:

Quarterly bills for existing accounts

There are three types of accounts for billing purposes:

1.      Direct-bill accounts – Our Accounting Department uses the fee calculated by the portfolio and client
management system, based on the market close on the last day of the prior quarter and increased or decreased
for cashflows from prior quarter.
2.      Wrap accounts – Custodian bills for Cumberland Advisors’ services and generates a fee report for
Cumberland Advisors’ use.
3.      Wrap accounts – Cumberland Advisors generates the custodian billing. Accounts are invoiced by
Cumberland Advisors, based on the market value of the account on the last day of the prior quarter. The
Accounting Department prepares a report of fees that is uploaded to the custodian.

Based on billing instructions for each, custodians will be notified of amounts owed by email or uploaded to
the custodian to process for payment. With the exception of direct bill accounts, fees are posted in our
portfolio management system and internal accounting system when they are deducted from client accounts by
the custodian and copies of all direct-bill invoices will be electronically stored.

Debit reports are generated in a portfolio and client management system for Wrap accounts, by custodian.
Fees are posted to Cumberland Advisors’ accounting system when custodian reports are received. In cases
where the custodian reports are not received in a timely manner, Cumberland Advisors will estimate the
amount to be received, based on prior quarter-ending market value, and will post the estimate to our internal
accounting system until the actual fee report is received, at which time the accounts will be adjusted in the
accounting system. A copy of all debit reports will be electronically stored.

New accounts opened during the billing period
The Accounting Department will determine if the new account needs to be direct-billed. If the account
is a direct-bill account for which Cumberland Advisors generates an invoice, the Accounting Department
will calculate a prorated fee. Direct-bill clients will receive an invoice for the fee amount to be paid.
Invoices are due upon receipt. If the account is a wrap account for which Cumberland Advisors
calculates the fee, debit reports will be sent to the custodian, and the fee amount will be paid directly
from the clients’ account. Invoices are due upon receipt.

Fees for new direct bill accounts or wrap accounts for which Cumberland Advisors generates an invoice
will be posted to a portfolio and client management system, our accounting system, and a copy will be
stored electronically. Charges for wrap accounts for which the custodian calculates Cumberland
Advisors’ fee, will be posted in Cumberland Advisors’ portfolio and client management system when the
fee is deducted from the account. Wrap accounts that open in the current quarter may not be changed
until the following quarter, depending on custodian rules. Any debit reports received or generated for
wrap accounts will be stored electronically.

Additional deposits to an account during the billing quarter
There will be additional fees charged on all contributions of cash or equivalent value of “in kind”
securities when the contribution is made to the portfolio, pro-rated through the end of the quarter. The fee
will be included with the next quarterly billing. If it is determined that an interim fee is required, an
invoice will be generated in the portfolio and client management system and recorded in Cumberland
Advisors’ accounting system, and a copy of the invoice will be stored electronically. Fees on wrap
accounts for which the custodian generates the charges will be posted in the portfolio management
system when the fee is deducted from the clients’ account.
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ITEM 7 – TYPES OF CLIENTS AND MINIMUM ACCOUNT SIZE

Our clients include high net worth individuals, institutions, investment companies, public and corporate
retirement plans, corporations, foundations and government entities (direct clients as well as managed money
through financial advisors).

Non-Profit Organizations
Our investment professionals can use a blend of 13 investment styles to reflect the short and long–range
financial goals of an organization. The portfolio is rebalanced when necessary to maintain target asset
allocations and adhere to any restrictions that the client may have requested to be imposed on the account.

Generally, Cumberland Advisors requires a minimum “household” investable asset size of $1,000,000;
however, Cumberland Advisors reserves the right to waive the minimum account or to impose a higher
minimum. Minimum account sizes are as follows:

              Fixed Income Investment Styles: $250,000
              Equity and Balanced Investment Styles: $250,000