Penney Financial LLC

Item 5 – Fees and Compensation

Penney Financial, LLC is paid solely by client fees on an hourly, flat rate, client net worth or percentage
of assets under management.

Financial Planning Fees

We charge fees on an hourly or flat rate basis for financial planning and financial consultations. Fees for
financial planning are determined by either: 1) our hourly fee of $450 multiplied by the estimated time
to complete the services; or 2) a flat rate based on the scope and complexity of the advisory services.
Discounts may be offered upon occasion and fees are negotiable at our sole discretion. Existing clients
may have engaged us for services under a previous fee arrangement.

Financial planning fees will not be collected for services to be performed more than six months in
advance. For each engagement, the fee and proposed services are detailed in the written service
agreement.

Either party may terminate an engagement upon written notice within five days of signing the service
agreement, at which time no fees are due. If the client terminates the engagement after this date, the
client is responsible for any fees already incurred.

Fees for our services may be paid by check or credit/debit card. We do not accept cash, money orders
or similar forms of payment for our engagements. Fees are generally due upon signing the written
service agreement. Engagements that are greater than 6 months will be billed quarterly.

In connection with using our services, the client may also incur separate fees and expenses that are
charged by mutual funds and/or exchange traded funds (ETFs). We recommend that you, the client,
review the investment prospectus for a complete explanation of these fees and expenses. We
recommend that the client obtain a complete schedule of fees from their brokerage firm when
applicable.

Penney Financial, LLC is a fee-only advisory firm. We never receive compensation from commissions,
mark-ups on your securities, transactions, or insurance products we may recommend. Clients always
have the option to purchase or not purchase recommended investments or financial products through
any service provider they choose.

Ongoing Service Level: Confidant

Often, clients will approach us for financial planning and decide they prefer Penney Financial, LLC to
manage their assets. Our Asset Management services are provided in coordination with financial
planning for one combined Asset Management fee. Our Asset Management fees are derived from an
annual percentage of the portfolio’s market value (including cash and money market values in an
account) and are calculated as follows:

Portfolio Value                  Annual Fee
$0 - $1,500,000                    0.65%
Next $1,500,000                    0.55%
Next $2,000,000                    0.45%
Next $5,000,000                    0.35%
Above $10,000,000                  0.28%

The fee is deducted from client accounts monthly in arrears and is based on the average daily balance
of the billing period. The fee will be assessed pro rata on the initial and terminating month if applicable
at the next billing cycle (end of the month). If the client recently completed a Financial Plan (within 60
days), the first 12 months may be discounted at the Firm’s discretion up to 100% of the previously
completed Financial Plan cost.

The typical portfolio value minimum per client (or household/entity) is $1 million; however, we reserve
the right to – in our sole discretion – accept client households with less than our portfolio minimum
based on select criteria (e.g.: other assets, future earning potential, related accounts, or pro bono
services).

The firm treats cash and cash equivalents as an asset class. Accordingly, unless otherwise agreed in
writing, all cash and cash equivalent positions (e.g., money market funds, etc.) are included as part of
assets under management for purposes of calculating the firm’s advisory fee. At any specific point in
time, depending upon perceived or anticipated market conditions/events (there being no guarantee that
such anticipated market conditions/events will occur), the firm may maintain cash and/or cash
equivalent positions for defensive, liquidity, or other purposes. While assets are maintained in cash or
cash equivalents, such amounts could miss market advances and, depending upon current yields, at any
point in time, the firm’s advisory fee could exceed the interest paid by the client’s cash or cash equivalent
positions.

The firm has a fiduciary duty to provide services consistent with the client’s best interest. As part of its
investment advisory services, the firm will review client portfolios on an ongoing basis to determine if
any changes are necessary based upon various factors, including but not limited to investment
performance, fund manager tenure, style drift, account additions/withdrawals, the client’s financial
circumstances, and changes in the client’s investment objectives. Based upon these and other factors,
there may be extended periods of time when the firm determines that changes to a client’s portfolio are
neither necessary nor prudent. Notwithstanding, unless otherwise agreed in writing, the firm’s annual
investment advisory fee will continue to apply during these periods, and there can be no assurance that
investment decisions made by the firm will be profitable or equal any specific performance level(s).

In addition to our Asset Management fee, the client could incur additional expenses from custodial
trading fees, internal expenses charged by the mutual fund, ETF or ETN, and other custodial fees. Penney
Financial, LLC does not receive any part of these fees other than the investment management fee as
noted above.

We do not charge any performance-related fees, and we do not receive any commissions from selling
or brokering financial products.

Additional information about our fees is noted in Item 12.

Ongoing Service Level: Consultant
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Item 7 – Types of Clients

Penney Financial, LLC provides its services primarily to individuals, families and high net worth
individuals. We may also provide services to trusts, estates, charitable organizations or small business
entities.

For our hourly financial planning and consulting engagements, we do not require minimums as to
income, assets, net worth, length of engagement, revenues generated or other conditions for engaging
our services.

For our Consultant advisory services, we generally have an annual minimum fee of $5,000.

For our Asset Management (Confidant) services, we generally require clients to have a total portfolio
balance of at least $1 million.