FLFS Advisory LLC

Item 5:       Fees and Compensation

A.      Fees Charged

FLFS’ advisory fees range from 0.00% to 2.0% per annum of a client’s assets under management.
Fees will be paid quarterly, in advance, and are calculated based on the market value of a client’s assets
as of the last day in the previous billing period. Assets allocated to cash or a cash proxy, such as a
money market account, will be included in the calculation of assets under management.

For certain “qualified clients” as defined by the Investment Adviser’s Act of 1940 Rule 205-3, FLFS
may recommend the client maintain their assets at another qualified custodian and pay a performance
based fee to FLFS. This fee is 10% based on the account value as of the last day of the previous quarter
and fees are negotiable.

Consulting fees are paid on an hourly basis ranging from $250 to $1,500 per hour depending on the
complexity of the work to be performed, the scope of the services provided, and the client’s unique
financial situation.

B.      Fee Payment

Investment advisory fees will be debited directly from each client’s account. If a client has an account
with a third party asset manager, that manager will calculate their fees and directly debit from the
clients account. In some cases, the manager will remit a portion of those fees to FLFS. In other cases,
the manager will debit their fee and FLFS will debit its fee separately. Fees to third party managers
are separate from and in addition to, the FLFS advisory fee.

For accounts custodied at LPL Financial, the advisory fee is paid quarterly, in advance, and the value
used for the fee calculation is the net value as of the last market day of the previous quarter, including
any cash in the client’s account. To the extent there is cash in your account, it will be included in the
value for the purpose of calculating fees only if the cash is part of an investment strategy. To the
extent there is insufficient cash in your account to cover the cost of that quarter’s advisory fee, we will
selectively sell securities in order to raise the necessary cash to pay the advisory fee. Once the
calculation is made, we will instruct your account custodian to deduct the fee from your account.

For clients who pay a performance based fee to FLFS, FLFS is compensated based upon a percentage
of the net profits generated in the account for the quarter. The performance based fee is billed and
accrued monthly but paid quarterly in arrears in accordance with the specific fee structure disclosed in
the client’s advisory agreement. This performance based fee is subject to a “high water mark,” which
means FLFS will not receive a performance based fee unless the account value exceeds its prior high
water mark, which is the value at which the most recent performance fee was paid. This fee will be
debited from the client account.

Dunham Standard Asset Allocation Program

For clients participating in the Dunham Standard Asset Allocation Program (“SAAP”), the Client will
be charged an annual asset based advisory fee of up to 2.00%. The asset based advisory fee is charged
quarterly in arrears and is calculated based on the average daily net asset value of the account. The
fees are deducted directly from the Client’s account or by ACH as directed by Client on the Dunham
SAAP application. Fees are pro-rated and charged upon termination.

In addition to the Asset Based Fee paid to FLFS, DAIC will charge 0.25% of the average daily net
asset value of the account, as program sponsor, from the assets invested in DAIC proprietary funds as

a distribution and service support fee. This fee is accrued daily and paid monthly. Fees shall be pro-
rated and charged upon termination.

Dunham Custom Asset Allocation Program

Where appropriate, FLFS may recommend the use of the Custom Asset Allocation Program (“CAAP”)
sponsored by Dunham & Associates Investment Counsel, Inc. (“DAIC”). This program has two fee
options:

The Performance Based Fee (“PBF”) option is only available to “qualified clients” as defined in the
Investment Adviser’s Act of 1940 Rule 205-3, as such may be amended from time to time. FLFS will
discuss with Client and determine if they qualify for the PBF option based on that rule and whether
the CAAP PBF option is appropriate for the Client’s investment objectives.

The performance based fee for the CAAP PBF option is currently 10% of the net increase in account
value, adjusted for inflows and outflows, for the preceding month (or portion thereof, if less than a
month), subject to a “high water mark”. DAIC will provide fee calculations on a quarterly basis.
DAIC cand FLFS split the PBF equally.

The Asset Based Fee option of the CAAP, whereby Client pays to FLFS an annual fee not to exceed
2.00%, based on the average daily balance of the account(s) during the billing period. The fee accrues
daily, but is charged quarterly, in arrears.

In addition to the Asset Based Fee charged by FLFS, DAIC also charges the Client a Program Fee of
0.25% which is calculated in the same manner as the Asset Based Fee. The Program Fee is paid to
DAIC.

All fees, whether for the PBF or Asset Based Fee or Program Fee are deducted directly from the Client
account(s) or by ACH as directed by Client on the Dunham application by DAIC and then pays the
amount of the total fees due to FLFS. Fees are pro-rated for partial billing periods. Because the fees
are paid in arrears, to the extent Client terminates this Agreement during a quarter, it is unlikely that
FLFS or DAIC will owe a rebate to the Client for any unearned fee. However, to the extent there ever
is an unearned fee based on the number of days Client was a Client, it will be returned to Client on a
pro rata basis.

DAIC Conflict of Interest

DAIC may pay a portion of its compensation to FLFS. This compensation varies from 5bps to 25bps
and is based on the total dollar amount of assets held by FLFS in the PBF fee option and the asset
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Item 7:       Types of Clients

      Clients advised may include individuals, families, trusts, charitable organizations and foundations,
      businesses, and pension plans. FLFS does not impose a stated minimum fee or minimum portfolio
      value for starting or maintaining an investment advisory relationship. However, when FLFS
      recommends a third party manager, that manager can have account minimums.