Financial Design Studio Inc

Item 5: Fees and Compensation
How we are paid depends on the type of advisory service we provide. Please review the fee and compensation
information below. Fees could be negotiable based on factors such as the complexity of your financial situation or
total assets under management. Complexity considers various factors of the client’s financial circumstances, such as

income, assets, liabilities, marital and family status, employment status, and number of financial areas that need to
be addressed. In addition, we reserve the right to offer fee waivers or discounts at our discretion. Therefore, some
clients could pay different fees than those shown below. Our fees could be higher or lower than fees charged by other
investment advisers for similar services.

The specific fee for each client will be outlined in their advisory agreement. No increase in a client’s fee shall be
effective without the client signing a new agreement or amendment to their current agreement. If the fee schedule
in this Brochure differs from what is in their agreement, we will continue billing based upon the signed agreement.

Investment Management Services Fees
For our Investment Management Services, our standard advisory fee is based on the combined market value of the
client’s assets under management, paid in arrears on a monthly basis. FDS has a minimum portfolio value
requirement of $875,000 for this service, which may be waived at our discretion. Fees are assessed as a percentage
of the total assets under management according to the following fee schedule:

                                    Assets Under Management         Annual Fee (%)
                                           $0 – $500,000                1.25%
                                      $500,001 – $1,000,000             1.00%
                                     $1,000,001 – $3,000,000            0.80%
                                         Over $3,000,000                0.60%

The fee is a blended tier fee, which means that different percentage rates are applied to the defined levels of assets
under management. For example, for assets under management of $2,000,000, a client would pay 1.25% on the first
$500,000, 1.00% on the next $500,000, and 0.80% on the remaining balance. The monthly fee is determined by the
following calculation: (($500,000 x 1.25%) + ($500,000 x 1.00%) + ($1,000,000 x 0.80%)) ÷ 12 = $1,604.17.

Fees are calculated on the fair market value of your investment portfolio, including cash and cash equivalents, as of
the last day of the previous calendar month. Your portfolio will typically hold investment options that are regularly
traded on an open exchange with an observable market value, which is used to calculate the advisory fee. The
custodian provides the valuation of these securities. In the rare event your portfolio includes a holding which does
not have an observable market value, we will use accepted industry methods for determining a fair market value for
such a holding. If you dispute our valuation analysis, you can provide us with additional information to substantiate
a different fair market value.

Fees are directly debited from client accounts held by the qualified custodian, or the client may choose to pay by
check or electronic funds transfer. When we directly debit our fees from your account, you will authorize the custodian
to deduct the fees and pay them to us. We are responsible for calculating the fee and delivering instructions to the
custodian; however, the custodian does not verify the accuracy of the advisory fees deducted. We encourage you to
review the statements you receive from the custodian to verify that appropriate fees are being deducted from your
account. If you have any questions or concerns, you are urged to contact us immediately.

Accounts initiated or terminated during a calendar month will be charged a prorated fee based on the amount of
time remaining in the billing period. You may terminate our Investment Management Services by providing us with
written notice at least 30 calendar days in advance. Your final fee will be calculated on the amount of assets under
management as of the termination date. Since fees are paid in arrears, no refund will be needed upon the termination
of our services.

Financial Planning Services Fees
Ongoing Financial Planning Services Fees
For clients engaging our Ongoing Financial Planning Services, our annual flat fee is typically $10,000, based on the
complexity of the client’s financial situation. The fee is paid in arrears in 12 monthly installments. Fees for this service
may be paid by electronic funds transfer or check.

If you engage our Investment Management Services, we do not charge a separate fee for Ongoing Financial Planning
Services. These services are covered by the Investment Management Services fees described above. Further, for
clients engaging Ongoing Financial Planning Services, Investment Management Services are included at no additional
cost for clients with less than $875,000 in managed assets. Once a client’s assets under management exceed $875,000
as of the last day of a calendar month, the client will have 90 days to transition to the Investment Management
Services fee schedule described above, and Ongoing Financial Planning Services will be provided for no additional fee
under that schedule. A new advisory agreement will be signed at that time to reflect the new fee schedule and terms.

The client may choose to terminate our Ongoing Financial Planning Services upon 30 days’ written notice. The final
fee will be prorated based on the number of days services were provided during the final month. Since fees are paid
in arrears, no refund will be needed upon termination. We will provide you with any completed deliverables. However,
please note that if the agreement is terminated prior to completion, the scope and/or soundness of any analysis or
other work product made prior to completion could be limited, inaccurate, or incomplete.
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Item 7: Types of Clients
We provide our advisory services to individuals (including high net worth individuals), small businesses, and charitable
organizations.

We have a minimum portfolio value requirement of $875,000 to receive our Investment Management Services, which
may be waived at our discretion. Clients engaged in our Ongoing Financial Planning Services with less than $875,000
in assets may receive investment management as part of their ongoing financial planning at no additional cost.