Kahala Financial Advisors LLC

Item 5 – Fees and Compensation

Investment Advisory Fees. Kahala Financial Advisors, LLC’s fee for providing investment supervisory
services is based on each household’s aggregate amount of assets being managed. The total fee shall
then be pro-rated and deducted from each account according to the following schedule.

    1.0 percent per year (0.25 percent per quarter) for the first $500,000

    0.75 percent per year (0.1875 percent per quarter) for the next $500,000

    0.50 percent per year (0.1250 percent per quarter) for amounts over $1 million

These fees are payable to KFA in advance at the start of each calendar quarter. The investment advisory
fee for the first quarter shall be based on the market value on the date the client services agreement is
signed and shall be prorated for the balance of the calendar quarter. The service fees for subsequent
quarters shall be based on the market value of the assets under management as of the end of the
preceding calendar quarter. Authorization for the automatic deduction of fees from each account is
contained in the custodian's brokerage account application. KFA’s fees are non-negotiable; however,
KFA reserves the right to discount or waive its fees at its own discretion. KFA’s investment advisory fees
are exclusive of any brokerage commissions, transaction fees, mutual fund fees and other related costs
and expenses which may be incurred by the client.

Applicable Taxes. Any applicable state and local taxes shall be applied to KFA’s fees. The State of
Hawaii imposes a general excise on local businesses which in turn may pass the tax on to their
customers. The current combined maximum rate you may be charged is 4.712 percent.

Automatic Deduction of Fees. Authorization for the automatic deduction of fees from each account is
contained in the custodian's brokerage account application.

Invoices. The computation of fees will be reflected in the invoices that are included with the quarterly
performance reports. You are encouraged to review each invoice for accuracy by comparing your
invoices with the statements received from the custodian.

Fee Adjustment for Substantial Withdrawals. Fee adjustments will be considered for significant
withdrawals made during the quarter that are independent of any systematic withdrawal scheme. Also,
excluded are distributions taken annually instead of monthly and IRA Required Minimum Distributions.
Such an adjustment will be made if it amounts to a refund of 10 percent or more of the current quarterly
fee. Fees will be credited back to on-going accounts. Refund checks will be mailed to clients with closed
accounts. A fee adjustment will not be made for transfers of cash or other assets between any client's
related accounts under our management.

Early Termination. The client service agreement may be terminated without penalty upon delivery of
written notice to KFA within five business days after the date you signed the client services agreement.
After this initial five-day period has elapsed, either party may terminate the contract upon 30 days
written notice. Upon termination of an account, a refund of service fees will be prorated on the number
of days remaining during the quarter after the date of withdrawal.

Other Advisory Fees. In addition to KFA's management fee, certain investment vehicles such as mutual
funds and ETFs also assess management fees that are built into the daily pricing of the shares of each
fund. KFA’s investment selection criteria primarily include mutual funds and/or ETFs with below-
average expense ratios. The fees charged by each mutual fund and/or ETF shall be disclosed in its
prospectus and periodic reports to its investors. During review meetings or upon request, KFA may
produce third-party research reports that disclose the fees of each component fund and each portfolio.

Custodial Fees. Since 1995, Kahala Financial Advisors, LLC has exclusively recommended Charles
Schwab & Company (Schwab) as the custodian and broker for its clients’ accounts. In 2017, Schwab had
reduced KFA’s transaction fees to a flat $15 per trade whenever we buy or sell shares of a no-load
mutual fund for each client. In 2019, Schwab waived its transaction fees for stocks and ETFs. Schwab
also earns a portion of the management fees that are paid by certain mutual funds that elect to
participate in Schwab’s “No Transaction Fee” marketplace. Schwab also earns management fees on its
money market mutual funds that are the default clearing accounts for the cash positions in each account.
The management fees for Schwab’s proprietary mutual funds are disclosed in their mutual funds’
prospectuses and periodic reports. Schwab has waived the annual account maintenance fee for
investment advisors’ client accounts.

Schwab may charge other fees such as wire transfer fees, margin account interest and non-standard
asset holding fees. Generally, these fees are not applicable to most of the accounts under our
management. Clients may opt for such services and fees under any self-directed account (not managed
by KFA) they may have at Schwab.

Important Income Tax Note. Under the previous federal tax law, investment advisory fees that are
paid from taxable brokerage accounts may be deducted by those who “itemize” their tax deductions.
This federal tax deduction has been suspended until 2025. State tax laws may vary on this. Hawaii still
allows the deduction of investment expenses.

Item 7 – Types of Clients

Kahala Financial Advisors, LLC offers portfolio management services primarily to individuals, trusts and
estates. The types of accounts generally include but are not limited to taxable brokerage accounts
(individual, joint, trust and custodial) and retirement accounts (IRAs, SEP-IRAs, Roth IRAs, and
Education IRAs). KFA’s services are also available to charitable organizations and corporations.

For prospective clients, KFA’s minimum investable asset level per household is $1 million. Each client’s
household may aggregate one or more accounts to meet this minimum. This minimum shall not apply to
existing client accounts of record.