Sawtelle Charles Scott

Item 5 Fees and Compensation

Ongoing Management:
Ongoing investment advisory accounts are charged an annual fee of 1%. The annual fee percentage is reduced as
noted below as assets under management increase. Fees are non-negotiable. One fourth of the annual fee is paid in
advance at the beginning of each quarter (January 1, April 1, July 1, or October 1). Our formula for calculating fees
is:

(Total Assets Under Management) x (Annual Rate)/4 x (Days Remaining in Quarter)/(Total
Number of Days in Quarter).
Fees are automatically deducted from the account. I do not bill ongoing fee-schedule clients directly. If your
agreement with SFM is terminated, any pre-paid fees will be refunded on a pro-rated basis, based on the number of
days remaining in the quarter.
         Assets Under Management                                        Annual Fee Amount
         $50,000-$1,000,000                                             1.00%
         Next $1,000,000                                                .75%
         Next $1,000,000 and above                                      .25%
Services rendered in the course of ordinary asset management, including periodic consultation and review are
covered by the asset management fees and are not subject to an additional charge.

Consultation Management:
Consultation clients do not receive on-going discretionary investment of assets. Instead, the client requests periodic
consultations with the advisor to review a portfolio and/or make recommendations for investments. Financial

consultation is offered at $200.00 per hour. Consultation fees are non-negotiable, billed directly, and due at the time
services are rendered.

This fee model involves more risk to the client, therefore it is not recommended for most investors. These clients
will receive recommendations for investments which will include specific stocks, mutual funds, or ETF’s and
suggested prices for purchase or sale at the time of the consultation. It is ultimately the client’s responsibility to
purchase or sell on the recommendation of the advisor. Additionally, the client has veto power over any
recommendations. The primary risk in this model is that the client will not continue receiving management advice
such as when to sell or move into/out of specific holdings. I discourage clients from choosing this option because
retirement management it a life-long process with ever changing variables. Periodic consultation with a professional
does not reap the same benefit as an on-going relationship with an advisor who is working with you to reach your
retirement goals.

As a client of SFM, you must custody your accounts at Fidelity Investments, TIAA-Cref, or Schwab where we
maintain download capability and trading agreements. Fidelity and TIAA-Cref have “short-term” surrender charges.
Fidelity charges on certain funds held less than 30 days and 90 days. TIAA-Cref charges on certain funds held less
than 60 days. Schwab does not charge short term surrender penalties though some mutual funds offered at Schwab
have surrender penalties for funds held less than 30 days. Please note that Fidelity and TIAA-Cref funds have an
operating expense charge, which is detailed in the fund prospectus. I have no affiliation with outside brokers, and
pay no fees to brokers or investment advisors. All investment products that I recommend are not exclusive to SFM.
These products are available to purchase through other brokers and agents that I am not affiliated with. I receive no
compensation from Fidelity, TIAA-Cref, or Schwab. I do receive trading software and research information from
Fidelity and Schwab. SFM does not receive any commissions from the purchase or sale of stock or mutual funds. I
do not receive any reimbursement from any mutual fund or investment company in any form or fashion, other than
the aforementioned Fidelity and Schwab proprietary software and information.

Item 6 Performance-Based and Side-By-Side Management

SFM does not accept performance-based fees or fees based on a share of capital gains on, or capital appreciation of
the assets of an on-going management client.

Item 7 Types of Clients

My clients are primarily individuals and families, professionals, university professors and participants in qualified
retirement plans.