GW Sherwold Associates Inc

Item 5 :Fees and Compensation. . — How our firm is compensated

         5.A. A description of the range of fees.
         Are our fees negotiable? Yes.

                                                    Initial Advisory Fees

         Financial Plans
         Initial fees for the construction of a financial plan are charged at the rate of $185.00 per hour. Actual
         cost of the financial plan will vary based on the complexity of the plan involved. The fee for construction
         of a financial plan is due upon completion of the plan.

         Investment Supervisory Services : Quarterly Advisory Fees

         Fees are based on a percentage of assets under advisory and are charged at a rate of 1.5% annually.
         Fees are negotiable. The fees are payable quarterly in advance.

         When an advisory client requests that her/his account be debited for advisory fee payments, the date
         used for valuation purposes is the 1st day of the month which begins the quarterly billing cycle. When
         the 1st day of the month which begins the quarterly billing cycle falls on a weekend day or a holiday, the
         business day prior to the weekend or holiday will be the valuation date for quarterly advisory fee billing
         purposes.

         Quarterly advisory fees are for advisory services only, and calculated solely on the assets under
         management. Quarterly advisory fees are in addition to and not a part of any other costs associated
         with acquisition or ownership of mutual fund shares or any other investment, as discussed and disclosed
         in the prospectus for such investment products.

         The advisory contract may be terminated within five days of client’s signature without fee or penalty.
         After five business days, client or investment advisor may terminate contract provided the other party is
         given thirty days written notice. Upon termination of contract, all unearned advisory fees will be
         refunded, prorated, based on the number of days in the calendar quarter that advisory services were
         provided. Lower fees for similar services may be found elsewhere.

         5.B. . Disclosure : Does our firm bill its clients for the incurred advisory fees by :
               • Sending an invoice to the client, OR Obtaining each client’s signed permission to deduct the
                    advisory fees from the client’s account held by the custodian, OR
               • May clients select either method of billing? .
         How often does the adviser assess fees (or bill clients)?

         Our advisory firm does practice “direct billing.” That practice requires us to obtain each client’s written
         permission to deduct our fees directly from the client’s account held by the custodian. [See the ADV
         Part 1B, Item 2. I]

         We may send an invoice to the client ourselves for payment of our financial planning fees.
         Financial Plan fees are due upon presentation of a plan. G.W. Sherwold Associates charges for its
         portfolio supervisory service quarterly in advance.

5.C. . Disclosure: Other types of fees or expenses clients may pay in connection with the advisory
services. Clients should be aware that opening an investment account carries with it costs beyond the
advisory fee(s) our firm charges. When placing a transaction order to buy or sell securities, advisory
clients may have to pay any or all of the following charges in addition to the advisory fees charged by
this firm.

      •   Brokerage commissions                   •  Internal management and administrative fees for
      •   custodian fees                             investments in mutual fund fees,
      •   postage charges                         • and 12b-1 fees in addition to administrative fees,
      •   processing charges                         and other marketing fees for mutual funds, paid to
      •   Ticket charges                             a broker dealer;
      •   Early surrender                          • account maintenance fees charged by a broker
      •   Transfer fees                              dealer for an account, especially if inactive.

We direct clients to this brochure’s Item 12 for further discussion of brokerage costs.

5.D. . Disclosure : Do clients pay fees in advance? How may a client obtain a refund of a pre-paid fee if
the contract is terminated prior to a billed period’s end? How will the amount of the refund be
determined? Yes. We charge in advance for our portfolio management services. The firm will prorate
all fees to account for services begun after a quarter’s start date and for services terminated prior to the
end of a quarter. If either client or adviser decides to terminate the advisory agreement, the firm
requires a 30-day termination notice. Mr. Sherwold will calculate the refund that the firm will send to
the client. The firm will refund any unearned prepaid fees pro rata based on the effective date of
termination after the 30-day termination notice.

5.E. Disclosure : Does the firm or any of its supervised persons accept compensation for the sale of
securities or other investment products, including asset-based sales charges or service fees from the sale
of mutual funds?

Mr. Sherwold may, in his capacity as the registered representative of a broker dealer, receive
commissions on securities or variable annuities sales, as well as 12(b)-1 fees for mutual funds.
Whenever he recommends the purchase of mutual funds or variable annuities and a client then opts to
use Mr. Sherwold as the broker dealer’s registered representative to effect the desired purchase, Mr.
Sherwold will earn additional income in the form of insurance commissions and possibly 12(b)-1 fees
paid by the mutual fund administration as well. As a registered principal of G.W. Sherwold Associates,
Inc., Mr. Sherwold will receive the normal commissions in the brokerage schedule. The firm will not
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Item 7. : Types of Clients.

          The types of advisory clients we service; requirements for opening or maintaining an account.

          Typically our clients include high net worth and other individuals, corporations and other businesses,
          and pension and profit-sharing plans. We are prepared to provide services to charitable organizations,
          estates, and trusts as well. G.W. Sherwold Associates, Inc. does not impose any minimum account size
          requirement for its services.