Schmidt Financial Management Inc

Item 5 – Fees and Compensation
Investment Management Fees

The SFM Advisory Fee is calculated by applying the annual Fee Schedule to the value of
Client’s managed assets, determined quarterly and calculated based on the current market
value as of the last day of the prior quarter. A Client is defined as parents and their
dependents. However, the assets of all lineal descendants of a common ancestor and their
spouses or spousal equivalents can be aggregated for the purpose of determining billable
assets. The SFM Advisory Fee will be debited from Client custodial accounts on a quarterly
basis in arrears. The initial SFM Advisory Fee for the first calendar quarter (or part thereof)
will be calculated on a prorated basis for the number of days remaining in the quarter and
deducted from Client accounts following the end of the first quarter.

Fees are payable only after services are provided, there are no unearned fees, and the
client will not have a refund due upon early termination of the advisory agreement.
However, the Adviser will prorate fees to the date of termination.

Clients will pay a SFM Advisory Fee as reflected below for managed assets and includes
financial planning and consulting services (excludes held away assets):

             Assets Under Management        Annual Rate (%)
 First       $1,000,000                     0.90%*
 Next        $1,000,000                     0.80%
 Next        $2,000,000                     0.70%
 Next        $4,000,000                     0.60%
 Next        $7,000,000                     0.50%
 Next        $10,000,000                    0.40%
 Over        $25,000,000                    0.30%

         *Subject to a minimum quarterly fee of $2,000.

Clients will pay a SFM Advisory Fee of 0.50% for managed assets only (excludes financial
planning and consulting services and held away assets).

Fees are subject to change upon the Adviser giving the Client thirty days written notice in
the manner prescribed in the Agreement. Client has the option of accepting the new fee
schedule or terminating the Agreement pursuant to the termination provisions of the
Agreement.

The account custodian may charge fees, which are in addition to and separate from
advisory fees. Accounts may incur transaction costs, retirement plan administration and
access fees, mutual fund annual expenses and other fees.

Certain private funds charge annual asset management fees, debt placement fees, and
carried-interest profit participation after investors receive their capital back, plus a
minimum return. Fees associated with private fund investments are in addition to and
separate from SFM fees. Cash management program deposits are considered assets under
management and are included in the investment management fee calculations.

Clients should note that fees for comparable services vary and lower or higher fees may
be charged by different providers for similar services.

Fees paid by clients to independent third-party managers are established and payable in
accordance with the ADV Part 2A brochure or other equivalent disclosure document of each
independent third-party manager to whom the Adviser allocates client assets and may or
may not be negotiable. The facts and circumstances of negotiability are contained in the
disclosure documents of each third-party manager. Please refer to your Client Agreement’s
Exhibit(s) for information on fees and costs pertaining to each of your selected third-party
manager(s). These fees and costs will be charged separately and are in addition to fees and
costs that are payable to the Adviser.

Receipt of Additional Compensation

Neither the Adviser nor any supervised person is associated with any broker dealer or
accepts compensation for the sale of securities or other investment products, including
asset-based sales charges or service fees from the sale of mutual funds.

Item 7 – Types of Clients
SFM provides advisory services to:

      Individual – Trusts, estates, 401(k) plans and IRAs of a household count as one
       individual.

      High net worth individual – An individual who is a “qualified client” under rule 205-
       3 of the Advisers Act of 1940 or is a “qualified purchaser”.

Account Minimums

SFM requires a minimum of $5,000,000 to establish a new investment management
relationship. However, the minimum may be waived at the sole discretion of the Adviser.
The Adviser will continue to service existing accounts that have values that are below the
minimum.