St Bernard Financial Services Inc

5. FEES AND COMPENSATION

As a Registered Investment Advisor, St. Bernard endeavors to provide services on a fee basis to the greatest degree
possible. Most fees are based on a percentage of assets under management, but clients may choose an hourly rate or a
combination to determine fees. Most of our investment recommendations focus on low-cost, no-load products on
which St. Bernard receives no commissions. All mutual funds, including no-load funds, charge ongoing fees to cover
their operating expenses including management expenses. Owners of mutual fund shares pay their proportionate share
of these expenses. These are not paid separately by clients, but they are fees nevertheless and are in addition to fees

charged by St. Bernard. The levels of fees charged by different funds are considered strongly in choosing investments.
While there is a distinct preference for the lower cost funds, St. Bernard may invest in funds that are not among the
cheapest in its category if it believes there are valid reasons doing so. Not all worthwhile investments are available on
a fee-only basis. Representatives, who are properly registered, may also receive commissions on variable insurance
products offered through St. Bernard’s Broker/Dealer arm. St. Bernard follows the definition of the Certified Financial
Planner Board of Standards for fee only, which is as follows: "Fee-Only" denotes a method of compensation in which
compensation is received solely from a client with neither the personal financial planning practitioner nor any related
party receiving compensation which is contingent upon the purchase or sale of any financial product. A "related party"
for this purpose shall mean an individual or entity from whom any direct or indirect economic benefit is derived by
the personal financial planning practitioner as a result of implementing a recommendation made by the personal
financial planning practitioner. We follow this definition of fee-only compensation with one very specific exception.
The only exception is when it is in the clear best interest of our clients to utilize a fee-based compensation arrangement.
In a fee-based arrangement, a portion of our fee (which is charged as a percent of assets under management) may be
in the form of payments directly from the investment companies from whom we may obtain variable products. The
percentage of asset compensation in a fee-based arrangement shall be no more than, and is usually less than, our stated
fee-only investment advisory fee. If this type of compensation appears to be in the best interest of the client, a written
disclosure document will be provided detailing the options of fee-based compensation vs. fee-only compensation.
Two examples of this type of arrangement are:

(1) A tax-free exchange from one annuity to another annuity. In this situation, adverse tax consequences would apply
to the client if the fee were to be withdrawn from the annuity.

(2) A tax-sheltered annuity (403)b where an annuity needs to be used to fulfill the implementation of the retirement
plan. The reason this type of arrangement seems prudent for the client is that if the fee is pulled from certain
investments (as in fee-only), it triggers taxable income in the amount of the fee. If the fee is paid by the company
(usually in the form of trailer fees), under the current tax laws, it does not trigger such a tax. While we want to be fee-
only, we do not want to do so to the detriment of our clients. Using the fee-based approach due to a cut taken by the
broker dealer handling the transaction may decrease our compensation. These situations are rare, but it is our goal to
be fee-based only to the extent that it helps, instead of harms, our client's financial well being. In the event St. Bernard
implements an investment product in which an advisor of the firm will receive a commission, the commission will be
fully disclosed to you in advance. If St. Bernard receives commissions as a result of the purchase of an investment
asset, that asset will be excluded from any computation of asset based management fees. St. Bernard may also use
mutual funds that normally charge a sales commission if these are available for purchase for the client on a net asset
cost basis, i.e. without paying a sales commission. Initial consultations to assess client needs and objectives are always
at no charge.

For continuing advisory agreements, fees are based on the amount of assets under management and will correspond
to the following table from which discounts may be negotiated. Fees are assessed on a quarterly basis and are payable
quarterly in advance. These fees are deducted from the client’s account.

A Flat Fee To Be Negotiated

or

Account Size                         Annual Fee
First                        $50,000 2.00% of assets
$50,001           to        $100,000 1.75% of assets
$100,001          to        $250,000 1.50% of assets
$250,001          to        $500,000 1.25% of assets
$501,000          to        $5 million 1.00% of assets
$5 million or more                     Negotiable

Some clients prefer to be charged on a pure time basis. In those cases, fees or future consultations are billed at a rate
of $125 per hour, payable at the time of services. For special situations, discounts may be negotiated. For consultations
involving detailed analysis requiring extensive computer support and outside research, you will be billed for the
additional costs. You will be contacted for approval prior to incurring additional expenses. A contract between St.

Bernard and you may be terminated at any time upon your or St. Bernard's written notice of 30 days. If you terminate
the contract all unearned fees will be returned to you. In the event St. Bernard terminates the contract, all unearned
fees will be returned to you. St. Bernard will return all prepaid fees and void the contract if you request it within five
business days of the contract date.
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7. TYPES OF CLIENTS

St. Bernard Financial Services generally provides investment management services to individuals, families, trust and
estates. Advice may extend to entities related to the client such as small businesses and charitable organizations,
including foundations and endowments. Client relationships vary in scope and length of service. There is no minimum
account size to open an account.