OFG Financial Services Inc

Item 5         Fees & Compensation (Cont.)

D. Depending on the investment custodian’s process for charging fees, OFG clients could pay fees
   in advance of services performed for clients. Either party can cancel a client agreement at any
   time for any reason upon receipt of written notice. Upon termination of any account, any
   earned, unpaid fees will be due and payable. The client has the right to terminate an
   agreement without penalty within five business days after entering into the agreement.

E. OFG’s Registered Investment Adviser does not receive commissions for the sale of securities or
   other products on advisory accounts.

   If an OFG advisory client executes recommended securities transactions through associated persons
   of OFG in their separate capacities as Registered Representatives of OFG Financial Services, Inc.’s
   broker-dealer (hereinafter “OFG’s Broker-Dealer”), these individuals will earn commissions which
   are separate and distinct from fees charged for advisory services. In some instances, depending on
   the size of the transaction, advisory fees will be discounted, at OFG’s discretion, for commissions
   earned. Commissions will not be credited toward future advisory fees.

   Associated persons of OFG may, from time to time, receive 12b-1 distribution fees from
   investment companies in connection with the placement of client funds into investment
   companies and/or other securities brokerage commissions from implementing securities
   transactions on behalf of advisory clients.

       1. A conflict of interest could occur in client accounts when associated persons of OFG in
          their separate capacities as Registered Representatives of OFG’s Broker-Dealer process
          transactions through OFG’s Broker-Dealer. While these individuals endeavor at all times
          to put the interest of the clients first as part of OFG’s fiduciary duty, clients should be
          aware that the receipt of additional compensation itself creates a conflict of interest and
          may affect the judgment of these individuals when making recommendations. OFG will
          notify the client if a transaction will be processed in a separate capacity as a Registered
          Representative of OFG’s Broker-Dealer which would generate a conflict. OFG
          recommends investments in several types of securities. When mutual funds are used in
          managed accounts, OFG would typically recommend no-load funds.

       2. When OFG recommends investment products, clients may purchase those investments
          through other brokers or agents not affiliated with OFG.

       3. OFG does not receive revenue from advisory clients through commissions other than
          through OFG’s Broker-Dealer as explained above in Item 5E.

       4. OFG does not charge advisory fees in addition to commissions or markups, and
          commissions would only be received through OFG’s Broker-Dealer as explained above in
          Item 5E.

Item 6       Performance-Based Fee & Side-By-Side Management

OFG does not accept performance-based fees.

Item 7        Types of Clients
OFG provides investment advisory services for individuals and corporations. OFG does not have a
required minimum account size to open an account.

Item 8          Method of Analysis, Investment Strategies and Risk of Loss
A. Fundamental analysis is used to determine the investments for each client. Long-term
   investments and short-term investments are recommended depending on the needs of the
   client. Each client is informed that investments in securities involve risk of loss. Clients should
   be prepared to bear a loss.

B. Fundamental analysis is used after obtaining detailed information from the client. Client
   investment objectives and time horizon determine the anticipated length of time an investment
   is held. Market conditions and client circumstances may change. This could require an
   investment be sold before the original plan. OFG does not recommend frequent trading in
   client accounts. Frequent trading can affect investment performance, particularly through
   increased brokerage costs and other costs and taxes.

C. OFG offers advice on exchange-listed securities, over the counter securities, foreign issuers,
   corporate debt securities, commercial paper, certificates of deposit, municipal securities,
   variable annuities, mutual fund shares, and United States government securities. Unforeseen
   circumstances could change investments and thus change the level or risk.