Dunham & Associates Investment Counsel Inc

Item 5 — Fees and Compensation

Dunham Funds

As investment adviser to the Dunham Funds, DAIC receives investment advisory fees from

FIRM BROCHURE
the Dunham Funds. Also, as distributor of Dunham Fund shares, DAIC may receive
compensation in connection with the sale of the Fund shares. DAIC may receive all or a
portion of these fees. These payments can be significant. This has the potential to create a
conflict of interest, as it may provide an incentive for DAIC to recommend the purchase of
the Dunham Funds rather than other similarly-situated mutual funds. In addition, DAIC may
be incentivized to recommend clients to invest assets (cash) into Core Allocations, to the
extent the recommendation is suitable and in the best interest of the client. This potential
conflict of interest is addressed by DAIC through communications to, and training and
supervision of, its representatives, and by providing disclosure to the client of specific
conflicts as part of the documentation provided to each client at the time of sale.

Any fees that DAIC receives from the Dunham Funds or from investors in Dunham Funds,
are disclosed in the Prospectuses of the Dunham Funds.

Wrap Program Fees

Detailed advisory and expense fee information about the Wrap Program is available in the
Wrap Fee Program Brochure (Wrap Brochure). The Wrap Brochure is provided with this
brochure and is prepared specifically for prospective and current participants in the Wrap
Program.

SMAs

For SMAs, DAIC’s actual advisory fees, minimum fees and minimum account sizes may be
negotiated and may vary due to a variety of factors, including the particular circumstances of
the client, specific investment strategies mandated by the client, account size, or as
otherwise may be agreed with specific clients. As a result, DAIC may offer certain clients
lower fees than other clients.

The specific fees that DAIC charges an SMA client are set forth in the client’s written
investment management agreement with DAIC. DAIC generally bills its advisory fees on a
quarterly basis in arrears unless otherwise stated in the written management agreement
with a client. Clients also may be billed directly for fees or authorize DAIC to directly debit
fees from client accounts. Accounts initiated or terminated during a calendar quarter will be
charged a prorated fee. Upon termination of any account, any earned, unpaid fees will be
due and payable.

Total fees charged to a SMA client range from 0.25% to 1.00%. A portion of this fee may be
paid by DAIC to DTC for providing custody and portfolio accounting services to SMA clients
who elect such services. DAIC compensates DTC for its services under a professional
services agreement.

Participation in an SMA may cost a client more or less depending on the circumstances. For
example, if there is heavy trading activity in a SMA, the advisory fees may cost the client less

FIRM BROCHURE
than if the client were charged brokerage commissions for each trade. Conversely, little
trading activity could result in the advisory fees exceeding the cost of the brokerage
commissions charged for each trade.

Private Fund

The Private Fund will pay DAIC an annual management fee of one percent (1.00%), calculated
on the Private Fund’s net NAV and billed quarterly in arrears.

The general partner will receive an incentive allocation equal to 10% of the increase in each
investor’s NAV from the prior quarter-end, payable when calculated by the third-party
administrator. The incentive allocation is charged only to “Qualified Clients” within the meaning
of Rule 205-3 under the Advisers Act.

Because the Private Fund invests in other private investment vehicles, investors indirectly bear
their proportionate share of management fees, performance allocations ("carried interest"),
and expenses charged by the underlying vehicles. DAIC does not offset the Fund-level
management fee by any fees earned at the underlying vehicle level.

The Private Fund may invest in Dunham Funds or affiliated cash management vehicles for the
liquid sleeve. DAIC has a financial incentive to select affiliated investments over third-party
options, as these investments may generate additional fees for DAIC and its affiliates. This
creates a potential conflict of interest, which DAIC addresses through disclosure in this
brochure and the Private Fund’s offering documents.

The Private Fund also incurs third-party administrator fees, custody/recordkeeping fees, audit,
tax, and legal expenses. These expenses are paid by the Private Fund and are reflected in the
NAV calculation.

Any fees that DAIC or its affiliates receives from the Private Fund are disclosed in the Private
Fund’s offering documents.

Investment Consulting Services

To the extent specifically requested by a client, DAIC may determine to provide portfolio
review and investment consulting services on a stand-alone separate fee basis. DAIC’s
portfolio review and investment consulting service fees are negotiable, which may be higher
depending upon the level and scope of the service(s) required. Prior to engaging DAIC to
provide stand-alone consulting services, clients are required to enter into a Consulting
Agreement with DAIC setting forth the terms and conditions of the engagement (including
termination), describing the scope of the services to be provided, and the fee that is due from
the client prior to DAIC commencing services. If the client terminates, the balance, if any, of
DAIC’s fee shall be paid by the client, including the fee due for services rendered by DAIC but

FIRM BROCHURE
not previously invoiced to the client. Fees shall be prorated and charged upon termination.

Other Expenses Regarding Dunham Funds and SMAs
Dunham Funds. In addition to advisory fees, mutual fund clients may incur fees for 12b-1,
custodian, administrative services, transfer agent, state registration, SEC registration, ICI
membership, state and city taxes, audit, printing, mailing, legal, compliance, as well as
...

Types of Clients

DAIC’s advisory services are generally provided to the following client types:

       Registered investment companies, primarily Dunham Funds;
       Investors utilizing the Wrap Programs;
       Investors utilizing the SMAs; and
       DTC and/or clients of DTC.
       Private Fund

Account Requirements

Dunham Funds

The Dunham Funds require the stated minimum account sizes to open and maintain an
account:

  Account Requirements          Class A        Class C Shares   Class N Shares
                                Shares
  Tax-Deferred Accounts             $ 2,000       $ 2,000       $ 50,000
  Regular Accounts (Taxable)        $ 5,000       $ 5,000       $ 100,000

FIRM BROCHURE

These minimums may be waived at the discretion of DAIC.

Wrap Programs

The Wrap Programs require the stated minimum account sizes to open and maintain an
account:

  Account Requirements             Standard Program     Custom Program
  Qualified (Retirement) Account
  Minimum                             $ 5,000              $ 25,000
  Non-Qualified Account Minimum       $ 10,000              $ 50,000

These minimums may be waived at the discretion of DAIC, the Wrap Program sponsor.

For the Standard Program, accounts below the applicable minimum will be charged an annual
$50 below minimum fee. For the Custom Program, accounts below the applicable minimum will
be charged an annual $65 below minimum fee. Accounts will be assessed this fee on the
anniversary date of the account. These minimums may be waived at the discretion of DAIC, the
Wrap Program sponsor.

SMAs

The SMAs require the stated minimum account sizes to open and maintain an account:

  Account Requirements                   SMAs

  Qualified (Retirement) Account
  Minimum                                $ 500,000

  Non-Qualified Account Minimum          $1,000,000

These minimums may be waived at the discretion of DAIC.

Private Fund

The Private Fund accepts subscriptions from “qualified purchasers” as defined in Section
2(a)(51) of the Investment Company Act 1940 Act and the rules thereunder. The minimum
investment amount accepted by the Private Fund is $1,000,000.

FIRM BROCHURE
  Account Requirements                      Private Fund

  Qualified (Retirement) Account
  Minimum                                   $1,000,000

  Non-Qualified Account Minimum             $1,000,000

The general partner may, in its sole discretion, opt to waive such minimum.