Financial Counseling Inc

Item 5 – Fees and Compensation

Fees are charged on a “pay as you go” basis. Fees are negotiable and may vary from client to client.
Fees are quoted in advance and must be accepted by client prior to project commencement or
investment management. Executing a signature on the client agreement or paying a partial/full
payment of fee acknowledges acceptance by client.

Financial Counseling, Inc. negotiation of investment management fees are based on one or more of the
following factors:
    •   The number of accounts, positions, account objectives, risk tolerances and
        restrictions requested by the client
    •   The estimated amount of time expended in researching, analyzing and documenting the
        specific recommendation(s) and course(s) of action.
    •   The requests of each client regarding follow up and forms of communication requested
    •   The familiarity (or lack thereof) between FCI and the client based on experience and
        client interaction
    •   A competitive analysis of other advisory firm’s fees
    •   The total amount of assets requested to be managed

Client agrees to supply Financial Counseling, Inc. with the ability to deduct fees from the account(s) on a
quarterly basis. This fee deduction process will occur in arrears of service provided and will be
accompanied by a quarterly fee notification that will be supplied to the client and evidenced on the
account statement produced by the qualified custodian. Quarterly fees are based on the ending value
of securities on the last day of the quarter.

The following is an example of how a quarterly fee is calculated:

        $800,000.00 value of assets under management on the last day of the quarter at an annual
        fee of 1.5% would render the following quarterly bill.

        1.5% annual fee divided by 4 individual quarterly periods = 0.00375

        $800,000.00 x 0.00375 = $3000.00 Fee for the quarter

Advisory fees are calculated, and billed quarterly, in arrears. The maximum advisory fee charged will
not exceed 2% in a given year, but is subject to change, and is subject to negotiation and individual
determination based upon particular facts and circumstances of a client and the extent of advisory
services anticipated. Clients may choose to pay fees by check or opt to have the fees debited directly
from client's accounts as stated in the Client Services Agreement. These fees may be considered higher
than average as related to other investment advisory firms, as such, clients may be able to attain similar
services at a lesser cost elsewhere.

        The following billing description items listed as 1, 2 and 3 are only pertinent for clients who
        reside in California: When FCI is granted the authority to deduct fees directly from a client’s
        account, the following processes will occur:

        1. FCI will possess written authorization from the client to deduct advisory fees from
           an account held by a qualified custodian.
        2. FCI sends the qualified custodian written notice of the amount of the fee to be deducted
           from the client’s account. This notification is often performed electronically at the same
           time as the fee billing is sent to the custodian.
        3 FCI sends the client a written invoice itemizing the fee, including any formulae used to
           calculate the fee, the time period covered by the fee and the amount of assets under
           management on which the fee was based. This invoice is sent quarterly at a time prior
           to the billing.

In rendering services described above, FCI makes recommendations only, these recommendations can
be implemented through FCI in the following methods: Non-discretionary or Discretionary.

Discretionary Transactions are directed by FCI for accounts that have a limited discretionary authority
agreement. Clients who choose to provide FCI with discretion have empowered FCI to buy and sell
securities without the client’s prior knowledge or consent. Clients may, by contract, place restrictions
on FCI’s discretionary authority.

FEE SCHEDULE (See Client Agreement)

The following fee schedule is provided as a general guideline for fees charged by Financial Counseling,
Inc. Advisory fees will be charged in arrears on a calendar quarterly basis based upon the value of the
client’s portfolio on the last business day of the calendar quarter. Advisory fees will be charged on those
accounts managed through the RIA’s custodian as well as those accounts which the Adviser
recommends to the client and which are directed by the client in other accounts. The Accounts managed
for a part of the quarter will be charged a prorated portion of the advisory fees for the quarter.

                                        Strategic Asset Allocation

                                  0 – 2,999,999                      range: 1.00%
                              3,000,000 or more                      range: negotiable

                                         Tactical Asset Allocation

                                 0 – 2,999,999                       range: 1.50%
                             3,000,000 or more                       range: negotiable

The maximum advisory fee charged will not exceed 2.00% in a given year. Each client contract is
individually negotiable with respect to the fee. You may be able to attain similar services at a lesser cost
from other financial service providers.

Financial Counseling, Inc. has no direct relationship with any specific custodian and receives no
commission compensation from Charles Schwab & Co., Inc. with regard to client transactions. The
platform at Charles Schwab & Co., Inc. is a quality, low fee, low ticket charge, brokerage option that has
been a good fit for investment management services.

Financial Counseling, Inc. management programs are not considered “wrap fee programs” in that clients
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