Peak Financial Management Inc

Item 5: Fees and Compensation

We base our fees on a percentage of assets under management and hourly charges, which are
described below.

Portfolio Management Fees
Portfolio Management services will be charged as a percentage of assets under management,
on the balance of client assets at the end of each quarter, according to the following schedule:

                        Total Assets            Quarterly Fee       Annual Fee
                   $1,000,000 and Under           0.2375%             0.95%
                  $1,000,001 to $3,000,000        0.2125%             0.85%
                    $3,000,001 and Over           0.1875%             0.75%

Fees are typically charged quarterly in advance.

Clients may elect to be billed directly for fees or to authorize us to debit fees directly from
client accounts. Portfolio management fees are assessed on the balance of client assets,
including cash, at the end of each calendar quarter. Accounts initiated or terminated during a
calendar quarter may be charged a prorated fee. Upon termination of any account, any
prepaid, unearned fees will be promptly refunded, and any earned, unpaid fees will be due and
payable pursuant to the terms outlined in the advisory agreement.

Peak’s portfolio management fees are exclusive of brokerage commissions, transaction fees,
and other related costs and expenses which shall be incurred by the client. Clients are
responsible for the payment of these costs and expenses. Clients may also incur certain other
charges imposed by custodians, brokers, third-party investment managers, and other third
parties, such as interest charges, 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 are responsible for the payment of these costs and expenses.
Mutual funds, exchange-traded funds, investment advisors and private funds also charge
internal management fees, which are disclosed in a fund’s prospectus or offering documents.
Such charges, fees and commissions are exclusive of, and in addition to, our portfolio
management, and we will not receive any portion of these commissions, fees, and costs.

Financial Planning Fees
Generally Financial Planning fees are included in the Portfolio Management Fees. In instances
where a customer desires only financial planning services (without portfolio management), the
financial planning fee is estimated based on the nature of the services being provided and the
complexity of each client’s circumstances. All fees are agreed upon prior to entering into a
Financial Planning Agreement with any client and are calculated and charged on an hourly
basis, ranging up to $500. Our Financial Planning fees are generally not negotiable. Although
the length of time it will take to provide a Financial Plan will depend on each client’s personal

situation, we will provide an estimate for the total hours at the start of the engagement.

All fees are paid upon completion of the project.

Financial Planning Fee Offset: We reserve the discretion to reduce or waive the hourly fee if a
financial planning client chooses to engage us for our portfolio management services.

General Information
The specific manner in which we charge fees is established in each client’s written investment
advisory agreement.

Cash Balances
Some of your assets may be held as cash and remain uninvested. Holding a portion of your
assets in cash and cash alternatives, i.e., money market fund shares, may be based on your
desire to have an allocation to cash as an asset class, to support a phased market entrance
strategy, to facilitate transaction execution, to have available funds for withdrawal needs or to
pay fees or to provide for asset protection during periods of volatile market conditions. Your
cash and cash equivalents will be subject to our investment advisory fees unless otherwise
agreed upon. You may experience negative performance on the cash portion of your portfolio if
the investment advisory fees charged are higher than the returns you receive from your cash.

Retirement Plan Rollover Recommendations
As part of our investment advisory services to our clients, we may recommend that clients roll
assets from their employer’s retirement plan, such as a 401(k), 457, or ERISA 403(b) account
(collectively, a “Plan Account”), to an individual retirement account, such as a SIMPLE IRA, SEP
IRA, Traditional IRA, or Roth IRA (collectively, an “IRA Account”) that we will advise on the
client’s behalf. We may also recommend rollovers from IRA Accounts to Plan Accounts, from
Plan Accounts to Plan Accounts, and from IRA Accounts to IRA Accounts.

If the client elects to roll the assets to an IRA that is subject to our advisement, we will charge
the client an asset-based fee as set forth in the advisory agreement the client executed with our
firm. This creates a conflict of interest because it creates a financial incentive for our firm to
recommend the rollover to the client (i.e., receipt of additional fee-based compensation).
Clients are under no obligation, contractually or otherwise, to complete the rollover. Moreover,
if clients do complete the rollover, clients are under no obligation to have the assets in an IRA
advised on by our firm. Due to the foregoing conflict of interest, when we make rollover
recommendations, we operate under a special rule that requires us to act in our clients’ best
interests and not put our interests ahead of our clients.’

Under this special rule’s provisions, we must:

   •   meet a professional standard of care when making investment recommendations (give
       prudent advice);

   •    never put our financial interests ahead of our clients’ when making recommendations
        (give loyal advice);
   •    avoid misleading statements about conflicts of interest, fees, and investments;
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Types of Clients
Peak provides advisory services to the following types of clients:

   •   Individuals (other than high net worth individuals);
   •   High net worth individuals;
   •   Pension and profit-sharing plans; and
   •   Corporations and other businesses.

Account Minimums
We do not require an account or relationship size minimum in order for a client to
open/maintain an account or establish a relationship.