Financial Designs Corporation

Item 5 - Fees and Compensation

Financial Planning Services
This service is provided to new clients who subscribe for the service by signing an Investment
Advisory Agreement ("Agreement"). The fee schedule is $600 per hour. The fee for the initial
Plan will be specified by estimating the amount of time the Plan will take to prepare. Half of the
fee is payable upon signing the Agreement and the balance is payable upon delivery of the
written plan. A typical plan will take 5 hours and result in a total fee of $3,000. The fee may be
waived by FDC. If the financial planning client decides to use our investment advisory services,
the fee paid for the financial plan will be credited towards the investment advisory fees until it is

Financial Designs Corporation
Form ADV Part 2A

consumed.

We do not require prepayment of a fee more than six months in advance and in excess of
$1,200.

You may terminate the financial planning agreement by providing written notice to our firm. You
will incur a pro rata charge for services rendered prior to the termination of the agreement.

Portfolio Management Services/Wrap Fee Program
Our fee for portfolio management services through the Financial Designs Wrap Fee Program is
based on a percentage of your assets we manage and is set forth in the following tiered fee
schedule:

 Market Value                      Maximum Quarterly Fee as % of            Maximum Annual
                                            Portfolio                         Fee as % of
                                                                               Portfolio
 $ 0 - $ 500,000                for the first $500,000         0.3750%           1.50%
 $ 500,000 - $ 1,000,000        for the next $500,000          0.3375%           1.35%
 $ 1,000,000 - $ 2,000,000      for the next $1,000,000        0.3000%           1.20%
 $ 2,000,000 - $ 5,000,000      for the next $3,000,000        0.2500%           1.00%
 $ 5,000,000 +                  over $5,000,000                0.1875%           0.75%

A tiered rate schedule means that fees are blended; i.e., as the portfolio value reaches a new
threshold, as noted in the table above, the assets greater than the prior threshold are charged a
successively lower rate.

At our discretion, we may combine the account values of family members living in the same
household to meet the account minimum of $500,000. Older client relationships may be subject
to a different fee schedule and account minimum.

Our annual portfolio management fee for portfolio management services is billed and payable
quarterly in arrears based on the number of days in the quarter. For fee purposes, the account
valuation will be based upon the last day of the preceding quarter.

If the portfolio management agreement is executed at any time other than the first day of a
calendar quarter, our fees will apply on a pro rata basis, which means that the advisory fee is
payable in proportion to the number of days in the quarter for which you are a client.

Except for 401(k) and similar accounts which will be invoiced, we will deduct our fee directly
from your account through the qualified custodian holding your funds and securities. We will
deduct our advisory fee only when you have given our firm written authorization permitting the
fees to be paid directly from your account. Further, the qualified custodian will deliver an
account statement to you at least quarterly. These account statements will show all
disbursements from your account. You should review all statements for accuracy. We will also
receive a duplicate copy of your account statements.

You may terminate the portfolio management agreement upon 30-days' written notice to our
firm. You will incur a pro rata charge for services rendered prior to the termination of the
portfolio management agreement, which means you will incur advisory fees only in proportion to
the number of days in the quarter for which you are a client.

Financial Designs Corporation
Form ADV Part 2A

We encourage you to review the statement(s) you receive from your account custodian. If you
find any inconsistent information between our invoice and the statement(s) you receive from the
qualified custodian please call our main office number located on the cover page of this
brochure.

Asset Allocation Services
Our fee for non-discretionary asset allocation services is based on the market value of the
assets under asset allocation. Every year thereafter, at the end of calendar quarter preceding
the anniversary date of the Asset Allocation Agreement, the assets under management are
revalued and the fee for the next four (4) calendar quarters will be recalculated based on the
value of the assets under management on that date. The fee is payable quarterly and is
determined as follows:

Market Value               Annual Fee
$100,000 +                    1.00%

Our fee for discretionary asset allocation services is based on a percentage of your assets we
manage and is set forth in the following tiered fee schedule:

 Market Value                   Maximum Quarterly Fee as % of              Maximum Annual
                                Portfolio                                  Fee as % of
                                                                           Portfolio
 $ 0 - $ 500,000                for the first $500,000       0.3750%       1.50%
 $ 500,000 - $ 1,000,000        for the next $500,000        0.3375%       1.35%
 $ 1,000,000 - $ 2,000,000      for the next $1,000,000      0.3000%       1.20%
 $ 2,000,000 - $ 5,000,000      for the next $3,000,000      0.2500%       1.00%
 $ 5,000,000+                   over $5,000,000              0.1875%       0.75%

A discretionary or non-discretionary Asset Allocation Agreement is required. If the Agreement is
executed at any time other than the first day of a calendar quarter, our fees will apply on a pro
rata basis, which means that the advisory fee is payable in proportion to the number of days in
...

Item 7 - Types of Clients

We offer investment advisory services to individuals, trusts, estates, charitable organizations,
corporations, pensions, profit sharing plans and other business entities.

In general, we require a minimum of $500,000 to open and maintain an advisory account. At our
discretion, we may waive this minimum account size. For example, we may waive the minimum
if you appear to have significant potential for increasing your assets under our management. We
may also combine account values for you and your minor children, joint accounts with your
spouse, and other types of related accounts to meet the stated minimum.