KCD Financial Inc

Item 5 – Fees and Compensation

No registered investment adviser or its Investment Advisory Representative shall charge or
receive compensation in connection with the giving of investment advice unless such
compensation is fair and reasonable and is determined on an equitable basis, adequately
disclosed to each Client in writing, and principal approved.

Each client will enter into an agreement which outlines the specific fees they shall pay.
The following is the general outline of the fee schedules for each program

Asset Management Programs

Fees: May be a percent of assets under management for the specified account(s). This
percentage could range from .5% up to 3% as agreed upon by the Adviser and Client. Fees in
excess of 3% may be considered excessive according to the Investment Advisors Act of 1940
and are not allowed. In instances of a fee exceeding 2%, it is understood the fee is higher than
that normally charged in the industry and that other investment advisers may provide the same
or similar services at a lower rate.
Factors to consider in determining if a fee is reasonable include (1) the customary fee charged
by other advisers for comparable services, (2) whether the same services could be obtained by
the Client directly without the adviser’s assistance and cost, (3) whether the adviser has a
reasonable belief that his services would generate gains in excess of the fee charged, and (4)
how the particular services differ from those generally provided by other advisers. Client is
made aware there may be alternative fee methods (straight commissions, etc.) and/or other
advisers who use a fee schedule that could result in charges greater or less than the agreed
upon advisory fee. Generally, the smaller the portfolio, the larger the fee, and conversely.
Guidelines: Up to $100,000 portfolio 2-<3%; $100,000 to $500,000 portfolio 1-2%; $500,000 to
$1,000,000 portfolio .5%-1%, above $1,000,000 portfolio .5% or any variation the portfolio may
dictate and is agreed in writing by Client and Investment Advisory Representative. The Client
and adviser will discuss the extent of the advisory services to be provided, and the agreed upon
specific fee structure for each advisory account which will be detailed in the Investment Advisory

Services Agreement, which will be signed by the Client and the Adviser and approved by the
designated supervisor prior to KCD accepting and processing any advisory fees.

In general, fees for the Asset Management Program range from .50 to less than 3% annually on
assets under management, including accrued interest, as agreed upon in your written
agreement, calculated in advance or in arrears, as a flat fee or tiered, based on the average
daily balance or the balance on the last business day of each quarter, payable quarterly. We do
not charge performance fees.

Financial Planning and Appraisal Services

Fees: Fees for financial planning and appraisal services may be based on an hourly charge or
on a fixed fee basis. Hourly and fixed rates will vary between Investment Advisory
Representatives but may not exceed minimum and maximum requirements set by KCD. The
Client may terminate the Financial Plan or Appraisal agreement without penalty within five days
of execution. The Financial Planning and Appraisal Agreements terminate upon delivery of the
written financial plan or analysis. Fees may be due in advance if all parties agree, however,
KCD will not collect more than $1,200 in fees per Client six months or more in advance. If paid
in advance and Client cancels agreement before completion of plan, a portion of fee will be
refunded based on amount of time Investment Advisory Representative has spent on plan. No
refunds will be made after completion of the plan. If the Client chooses to implement the
financial plan prepared by an Investment Advisory Representative of KCD, the fee structure for
the initial financial plan may be waived.
Hourly fees may range from $50.00 - $150.00, and fixed fees may range from $150/plan to
$1,000/plan, as agreed upon by the adviser and Client. Fees may vary depending on
Investment Advisory Representative’s experience, disclosed to Client by Investment Advisory
Representatives, and the size and complexity of the individual Client’s portfolio.
Guidelines: 2-4 years experience $50.-$100./hr; >4 years experience $150./hr. Client portfolio
of $5,000 - $50,000 low complexity $50./hr; Client portfolio >$1,000,000 - $150./hr. These are
Guidelines only and final plan fee shall be determined by Client and Investment Advisory
Representative and principal approved for each individual agreement. Generally, fees for
appraisal services will be lower than fees for services including complete financial plans.
Third Party Management Programs
Fees: Agreements with Third Party Management programs will include a proprietary fee
schedule and will supersede any fee schedule offered through KCD. The services and fees will
operate in accordance with the individual programs as detailed in each third party’s ADV Part 2A
and individual Client applications, which will be provided to each Client. Client fees are payable
quarterly, in advance or arrears, based on the fee schedule of the third party. KCD receives a
portion of these fees, as detailed and fully disclosed to each Client in each company’s
documents mentioned above. The portion of fees received by KCD from Third Party
Management Programs will range from 0-1.5% of the assets managed. Fees paid to KCD by
third party managers may vary from company to company which may create a conflict of interest
if an adviser recommends services of a third party money manager who pays a larger portion of
its advisory fees over another manager. The compensation arrangements with each money
manager will be disclosed to the Client. Also, in instances where the services of the third party

money manager may be obtained directly by the Client, disclosure shall be made to the Client
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Item 7 – Types of Clients

KCD provides portfolio management services to individuals, high net worth individuals,
corporate pension and profit-sharing plans and charitable organizations. Generally individual
advisors need to have a $25,000 minimum account requirement that may be waived.