QFC Advisory LLC

Item 5 – Fees and Compensation

Advisory services are billed based upon the type of services rendered. Fees are subject to negotiation at QFC’s
discretion. Other than fixed fee arrangements discussed below, QFC may increase or modify fees upon
providing 30 days advance notice to its clients. Fees for each service are shown below.

I. Financial Planning Fees
Fees for financial planning and related services are either on a fixed fee basis or an hourly or daily fee basis.
Fixed fees are negotiated based upon the complexity of the specific project. Hourly fees range from $50.00 to
$400.00 however the standard hourly rate is $250.00 and per diem fees are up to $3,500 per day, depending
on the services to be provided. Fees are negotiable with each client and are based on various factors such as
the services requested by the client, complexity of the client’s situation, and research and resources needed to
provide the requested services.

Generally, fees will be due one-half (1/2) upon client’s execution of the advisory agreement and the balance
due upon presentation or completion of the services. Client is advised that fees for financial planning are
strictly for financial planning services. In the event the plan outlines existing weaknesses or additional services
or products for the client and recommendations are made within the plan to meet these objectives; should the
client elect to act on these recommendations, QFC or related parties may be entitled to receive additional
compensation if the client requests QFC to implement the recommendations. However, financial planning
clients are under no obligation to act upon any recommendations of QFC or to implement the recommendations
through QFC, if they decide to follow the recommendations.

Either the client or QFC may terminate the agreement upon notice to the other party. In the event a client
terminates after QFC has commenced working on the project but before completion of the services to be

QUALITY FINANCIAL CONCEPTS                                                                         ADV PART 2
CRD 118886

rendered, QFC reserves the right to prorate the amount owed for the engagement. In this instance, the client
will only be obligated to pay a portion of the fee based upon the amount of work performed by QFC prior to
termination. If the requested financial service is not performed by QFC through no fault of the client, a full
refund will be made to the client.

II. Traditional Investment Management and “Asset Allocation”
QFC is compensated for investment management services based on clients’ assets under management. Fees
are paid quarterly in advance and are due on the first of each new billing period. The fees will be deducted
from the respective account for the initial billing and each subsequent quarterly billing. The initial fee is based
on the amount of assets initially deposited into the account. Thereafter, fees due for a quarterly period are
based on the account’s average daily asset value during the prior quarterly period. A fee will also be imposed
when additions of $5,000 or more are made to existing portfolios or when new portfolios are added by the
client. The account custodian will provide clients with an account statement reflecting the deduction of the
advisory fee. If the advisory agreement is terminated at any time during the initial quarterly period, 75% of
the initial fee is non-refundable. This policy is to reimburse QFC for the cost to establish the account and the
initial consultation and analysis. If the advisory agreement is terminated after the initial quarterly period and
the client is in compliance with the agreement, fees will be prorated to the date of termination which includes
the required notice period and the unearned portion of the fee will be refunded to the client. Termination of
the agreement becomes effective thirty days after written notice is received from the client via the U.S. postal
service.

Fees are negotiable based on the nature of the services requested by the client, mix of investment products,
complexity of the client’s situation, size of the client’s account, and client’s needs.

The following fee schedule is used as a maximum baseline for fee negotiations.

      Average Assets Under Management                       Quarterly Percentage (%) Fee

      First $100,000                                        1.90% x Average Daily Balance / 4
      $100,001 to $250,000                                  1.70% x Average Balance in excess of prior
                                                            bracket / 4 plus $475.00 for prior Brackets;
                                                            Average 1.780 % at upper limit
      $250,001 to $500,000                                  1.60% x Average Balance in excess of prior
                                                            bracket / 4 plus $1,112.50 for prior Brackets;
                                                            Average 1.690% at upper limit
      $500,001 to $1,000,000                                1.50% x Average Balance in excess of prior
                                                            bracket / 4 plus $2,112.50 for prior Brackets;
                                                            Average 1.595% at upper limit
      $1,000,001 to $2,500,000                              1.35% x the average balance in excess of prior
                                                            bracket/4 plus $3,987.50 for prior Brackets;
                                                            Average 1.448% at upper limit
      $2,500,001 to $5,000,000                              1.15% x Average Balance in excess of prior
                                                            bracket / 4 plus $9,050.00 for prior Brackets;
                                                            Average 1.299% at upper limit
...

Item 7 – Types of Clients

QFC provides financial planning and portfolio management services to individuals, high-net-worth
individuals, pension and profit-sharing plans, trusts and estates, non-profit entities, and business entities. QFC
imposes a minimum asset size for its advisory investment management services of $150,000. QFC may waive
the minimum account size, in its discretion. For clients who request mutual fund only portfolios, the asset
minimum to open an advisory account is reduced to $25,000. For those mutual fund only portfolios with an
opening value below $75,000, such portfolios shall be subject to an initial non-refundable retainer fee of $500.