SFE Investment Counsel Inc

Item 5 – Fees and Compensation

SMA Advisory Fees

SFE provides investment advisory services to separately managed accounts for a fee
based upon a percentage of assets under management. This fee is negotiable and will
be indicated in the executed client agreement. Annualized rates will not exceed:

Account Assets                     Annualized Rate
First $250,000                          2.00%
Next $1 million                         1.75%
Next $2 million                         1.50%
Next $5 million                         1.25%
Next $10 million                        1.00%

Other Advisory Fees

SFE receives compensation for portfolio management services under a Dual-Contract
Relationship pursuant to separate agreements with both the RIAs and their clients. SFE
charges a quarterly management fee calculated as a percentage of the market value of
such assets under management, as described in the Investment Management Agreement
with client. The annualized rate is 0.50%, subject to a minimum annual fee of $500. This
fee is negotiable in select circumstances. Clients will compensate RIAs for both advisory
and brokerage services provided by the RIAs and portfolio management services
provided to them by SFE. As compensation for SFE’s services, RIAs shall pay directly to
SFE the amount of fees invoiced by SFE quarterly in advance as calculated based upon
aggregate market value of client assets.

For our Model Portfolio Service, fees are negotiated separately with each platform
provider. Fees are remitted quarterly to SFE by the providers based upon negotiated rates
and their determination of the aggregate market value of assets utilizing the strategies
through their platforms.

SFE may recommend the use of sub-advisory services provided by another investment
advisory firm. SFE will perform adequate due diligence on recommended managers to
support their continued recommendation. Fees for sub-advisory services shall be
separate and in addition to our firm’s fees and will be disclosed in separate documentation
between client and sub-advisor.

Billing Practices

Fees are billed and payable quarterly in advance according to the investment
management agreement. In the event that you wish to terminate our services before the
end of a billing period, you must notify us, preferably in writing, 30 days beforehand. SFE
would provide clients with 30 days’ notice to move or liquidate their account in the event
SFE decides to terminate its relationship with the client. Any advisory fee paid in advance
will be pro-rated to the date of termination and any balance will be promptly refunded to
you.

Fees are automatically deducted from client assets each quarter in advance. Fees are
withdrawn from the managed account, or another designated account, and paid to us by
the client’s custodian. As part of this process, you understand and acknowledge the
following:

     a) Your custodian sends statements to you at least quarterly that show all
        disbursements from your account, including the amount of the advisory fees paid
        to us; and
     b) You provide authorization that permits us to be directly paid by these terms.
Services provided under a dual-contract relationship are billed directly for fees incurred
in advance. In certain limited circumstances, SMA clients may also be billed directly.
Fees are calculated at the end of each calendar quarter as a percentage of the market
value of the assets under management. Assets that are received into an account prior to
a quarter billing date may be charged a pro-rata fee in arrears based upon value of assets
at time of receipt. Such fees are included with the next quarterly billing. SFE’s fees are
billed and deducted from accounts quarterly, usually within 30 days following quarter end.

Other Fees and Expenses

Clients may pay charges indirectly assessed by a mutual fund, index fund, exchange
traded fund, or bank deposit program, such as fund management fees, distribution fees
and other costs. These expenses are disclosed in the fund’s prospectus or offering
memorandum. Other charges that the client may be responsible for include custodian
fees, service fees, wire transfer fees, foreign taxes and IRA fees. Schwab does not charge
transaction fees for U.S. listed equities and exchange traded funds.

Compensation for Securities Sales

Our firm and representatives do not receive commissions for securities transactions.

Item 7 – Types of Clients and Account Requirements

SFE generally provides investment advice to individuals, retirement plans, charitable
organizations, trusts, estates, corporations and other business entities. For our separately
managed account portfolios, we generally have a minimum charge of $500 per quarter.
Our dual-contract relationships are subject to an annual minimum fee of $500. Please
see Items 4 and 5 above for additional information on these programs and fees.