Kowalski Financial Inc

Item 5 – Fees and Compensation

The specific manner in which fees are charged by Kowalski Financial is established in a
client’s written agreement with us. We generally bill fees on a quarterly basis, in advance
each calendar quarter. Client fees are debited from client accounts. Management fees may
be prorated for each capital contribution and withdrawal made during the applicable
calendar quarter (with the exception of de minimis contributions and withdrawals).
Accounts initiated or terminated during a calendar quarter will be charged a prorated fee.
Contracts may be terminated by either party upon written notice. Upon termination of any
account, any prepaid, unearned fees will be promptly refunded, and any earned, unpaid
fees will be due and payable.

Investment advisory fees will typically be a variable fee up to 1.50% of your investable
assets, based on the size, nature, and complexity of the account. Our fees are based on the
value (market value, or fair market value in absence of market value, plus any credit
balance or minus any debit balance) of the daily assets at the end of the previous quarter.
“Assets under management” includes assets held in an account whether or not the
purchase of the assets was at the recommendation of Kowalski Financial advisory
personnel.

Our fees are exclusive of brokerage commissions, transaction fees, and other related costs
and expenses which shall be incurred by the client. Clients may incur certain charges
imposed by custodians, brokers, third party investment and other third parties such as fees
charged by managers, custodial fees, deferred sales charges, odd-lot differentials, transfer
taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage
accounts and securities transactions.

Clients with mutual funds in their portfolios are effectively paying Kowalski Financial and
the mutual fund advisor for the management of the client’s assets because mutual funds
pay advisory fees to the mutual fund advisor and such fees are therefore indirectly charged
to all holders of the mutual fund shares. Clients who place mutual fund shares under
Kowalski Financial’s management are therefore subject to both a direct management fee of
Kowalski Financial, the indirect management fee of the mutual fund and all applicable
trading costs.

Clients who elect to use separately managed accounts (Independent Managers) in the
management of their portfolio will be paying Kowalski Financial and the selected
Independent Manager for the management of assets. Independent Managers have the

discretion to trade individual securities on behalf of the client, with the client’s best
interest in mind. Clients who use an Independent Manager are subject to the direct
management fee of Kowalski Financial, the Independent Manager’s fee and all applicable
trading costs.

Item 7 – Types of Clients

We provide portfolio management services to individuals, high net worth individuals,
corporate pension and profit-sharing plans, charitable institutions, and foundations.