Physicians Financial Services Inc

Item 5 – Fees and Compensation

Advisory Contracts and Fees

5.A. Adviser Compensation

Wealth Analysis and Planning Fee Schedule:

A client is charged a wealth analysis and planning fee for services by one of two methods: a fixed
fee or an hourly rate. Fixed fees range from $850 to $5,000 based on the complexity of a client’s
personal and business financial situation and level of service. If a client’s situation dictates an
hourly fee arrangement, then the client is charged at the rate of $200 per hour. The total fee for an
hourly case is $200 times the number of hours Physician Financial Services, Inc. spends on the
case. Fees for this service are negotiable.

Fee payment is required when the work is completed, which is normally within 90 days. A client
may terminate an agreement within five (5) business days after signing, without penalty. After the
five (5) day period expires, a client may terminate a contract by written notice to Physicians
Financial Services, Inc.

If an outside consultant (attorney, accountant, etc.) is required for additional analysis and advice,
the outside consultant’s fee will be in addition to the amounts disclosed in the above fee schedule.

Money Management Services Fee Schedules:

While Physicians Financial Services’ management fees are generally competitive with other firms
in the marketplace, lower fee arrangements may be available from other sources in the
marketplace.

Internal Money Management:

   Our Money Management Fee Schedule (including a combination of stocks, mutual funds,
   bonds, exchange-traded funds, and cash) for “internal” money management is based upon a
   percentage of assets under management. All clients are billed quarterly in arrears. Fees shall
   be calculated quarterly based upon fair market value of the portfolio (priced as of the trade
   date, not settlement date) of the client assets under management by Physicians Financial
   Services, Inc. as of the last business day of the month of the quarter ended to be billed,
   applying the appropriate percentage and dividing the resulting amount by four. The basic fee
   structure is as follows:
                      Assets Under Management             Annual Rate          Quarterly Rate
                         Up to $500,000                     1.75%                 0.4375%
                     $500,001 to $1,500,000                 1.50%                 0.3750%
                   $1,500,001 to $3,000,000                 1.25%                 0.3125%
                   $3,000,001 to $5,000,000                 0.90%                 0.2250%
                     $ 5,000,001 and above                negotiated

   All fees may be negotiated depending on account variables and extenuating circumstances. A
   client may terminate an agreement within five business days after signing, without penalty.
   Employees and family members of employees of Physicians Financial Services may not be
   charged a management fee, and this arrangement is not available to the general public. The
   broker-dealer/custodian is compensated by account holders through commissions,
   transaction-related fees for securities trades and/or other account maintenance fees.
   Physicians Financial Services, Inc. and its related parties do not receive any direct
   compensation from the broker-dealer/custodian.

   Transaction Fees/Cost (the trading cost), charged by the clearing broker-dealer or custodian
   and internal cost of exchange traded funds and mutual funds (12b-1 costs, administrative costs,
   cost of operation and expense ratio, etc.) are not included in the above fee schedule.

External Money Managers:

   For clients utilizing external money managers, the fee(s) are based on full transparency and
   are broken out into three separate charges: Physicians Financial Services, Inc.’s fee(s), the
   external manager(s) fee(s) and the custodian fee(s).

    Physicians Financial Services, Inc.’s fees range up to one and one-half percent (1.50%)
    depending on the size of the account and additional money under management. The second
    component is the fee each external manager charges based on its own fee schedule. Then the
    third fee is the third party custodian fee (Charles Schwab or American Funds). These
    brokerage and custody services are at their published institutional rate. Market forces and
    market rates are the major factors in determining pricing for a client. All fees may be
    negotiated depending on account variables and individual circumstances.

    Physicians Financial Services, Inc. reserves the right to impose a minimum annual fee for
    Internal Money Management and /or External Money Management.

Other Advisory Fee Arrangements

5.B. Direct Billing of Advisory Fees

Each client may have their account debited for our Money Management services by signing a
Letter of Authorization or clients have the option of being billed directly by Physicians Financial
Services, Inc. Fees shall be calculated quarterly based upon fair market value of the portfolio
(priced as of trade date, not settlement date) of the client assets under management as of the last
business day of the month of the quarter to be billed, applying the appropriate percentage and
dividing the resulting amount by four.

Clients will receive notification of fees withdrawn from their account on the statements they
receive from the custodian.

With respect to fees associated with external money managers, these external money managers
may bill the client in arrears or in advance and they may utilize automated debiting or direct
billing depending on each individual external money manager per their management agreement.

With respect to Wealth Analysis and Planning, clients will be invoiced upon completion of the
work. Typically, clients pay for such services by check.

5.C. Other Fees and Expenses

In addition to Physicians Financial Services, Inc.’s investment advisory fee(s), the client may be
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Item 7 – Types of Clients

Physicians Financial Services, Inc. serves as a wealth manager and an investment adviser
specializing in money management for individuals, high net worth individuals, charitable
organizations, businesses, pension and profit sharing plans and trusts. Our focus is to attempt to
tailor client portfolios based on each client’s situation, needs and objectives. The common
denominator shared by all clients is a degree of financial success and recognition of the need to
coordinate different pieces of an investment portfolio into an overall well-managed investment
structure and portfolio. Our firm has not established any minimum account size or other
requirement for opening and maintaining an account.