Sound Financial Management Inc

Item 5: Fees and Compensation
Method of Compensation and Fee Schedule
 ASSET MANAGEMENT
 SFM offers direct asset management services to advisory Clients. SFM charges an annual
 investment advisory fee based on the total assets under management as follows:
     Assets Under Management                 Annual Fee                 Quarterly Fee
          Up to $1,000,000                     1.00%                       .25%
          Over $1,000,000                      0.80%                       .20%
 This is a tiered or breakpoint fee schedule, the entire portfolio is charged the same asset
 management fee. The annual fee is negotiable based upon certain criteria (e.g., historical
 relationship, type of assets, anticipated future earning capacity, anticipated future
 additional assets, dollar amounts of assets to be managed, related accounts, account
 composition, negotiations with Clients, etc.).
 Fees are billed quarterly in arrears based on the amount of assets managed as of the close
 of business on the last business day of the previous quarter. Lower fees for comparable
 services may be available from other sources. Clients may terminate their account within
 five (5) business days of signing the Investment Advisory Agreement with no obligation
 and without penalty. After five (5) business days, the Client may cancel by providing
 written notice to SFM and SFM may terminate advisory services with thirty (30) days
 written notice to the Client. For accounts opened or closed mid-billing period, fees will be
 prorated based on the days services are provided during the given period. All unpaid
 earned fees will be due to SFM. Client shall be given thirty (30) days prior written notice of
 any increase in fees. Any increase in fees will be acknowledged in writing by both parties
 before any increase in said fees occurs.
 ERISA PLAN SERVICES
 The annual fees are based on the market value of the Included Assets and will not exceed
 .50%. The annual fee is negotiable and will be charged as a percentage of the Included
 Assets. Fees will be charged quarterly in arrears based on the assets as calculated by the
 custodian or record keeper of the Included Assets (without adjustments for anticipated
 withdrawals by Plan participants or other anticipated or scheduled transfers or
 distribution of assets). If the services to be provided start any time other than the first day
 of a quarter, the fee will be prorated based on the number of days remaining in the quarter.
 If this Agreement is terminated prior to the end of the billing cycle, SFM shall be entitled to
 a prorated fee based on the number of days during the fee period services were provided

 or Client will be due a prorated refund of fees for days services were not provided in the
 billing cycle.
 The fee schedule, which includes compensation of SFM for the services is described in
 detail in Schedule A of the ERISA Plan Agreement. The Plan is obligated to pay the fees,
 however the Plan Sponsor may elect to pay the fees. Client may elect to be billed directly or
 have fees deducted from Plan Assets. SFM does not reasonably expect to receive any
 additional compensation, directly or indirectly, for its services under this Agreement. If
 additional compensation is received, SFM will disclose this compensation, the services
 rendered, and the payer of compensation. SFM will offset the compensation against the fees
 agreed upon under the Agreement.
Client Payment of Fees
 Fees for asset management services are deducted from a designated Client account to
 facilitate billing or they may pay SFM directly. The Client must consent in advance to direct
 debiting of their investment account.
 Fees for ERISA services will either be deducted from Plan assets or paid directly to SFM.
 The Client must consent in advance to direct debiting of their investment account.
Additional Client Fees Charged
 Custodians may charge brokerage commissions, transaction fees, and other related costs
 on the purchases or sales of mutual funds, equities, bonds and exchange-traded funds.
 Mutual funds, money market funds and exchange-traded funds also charge internal
 management fees, which are disclosed in the fund’s prospectus. SFM does not receive any
 compensation from these fees. All of these fees are in addition to the management fee you
 pay to SFM. For more details on the brokerage practices, see Item 12 of this brochure.
Prepayment of Client Fees
 SFM does not require any prepayment of fees.

External Compensation for the Sale of Securities to Clients
 SFM does not receive any external compensation for the sale of securities to Clients, nor do
 any of the investment advisor representatives of SFM.

Item 7: Types of Clients
Description
 SFM generally provides investment advice to individuals, high net worth individuals and
 charitable organizations.
 Client relationships vary in scope and length of service.

Account Minimums
 SFM does not require a minimum to open an account.