Targeted Financial Services LLC

Item 5. Fees and Compensation
TFS offers its services on a fee basis which include hourly and/or fixed fees as well as fees based
upon assets under management.

Financial Planning and Consulting Fees

TFS charges a fixed fee and/or hourly fee for financial planning and consulting services. These fees
are negotiable but generally range from $500 to $5,000 on a fixed fee basis and/or from $125 to
$200 on an hourly rate basis, depending upon the level and scope of the services and the
professional rendering the financial planning and/or consulting services. If the client engages TFS
for additional investment advisory services, TFS may offset all or a portion of its fees for those
services based upon the amount paid for the financial planning and/or consulting services.

Prior to engaging TFS to provide financial planning and/or consulting services, the client is required
to enter into a written agreement with TFS setting forth the terms and conditions of the
engagement. Generally, TFS requires one-half of the financial planning or consulting fee (estimated
hourly or fixed) payable upon entering into the written agreement. The balance is generally due
upon delivery of the financial plan or completion of the agreed upon services.

Investment Management Fee

In the event the client determines to engage TFS to provide investment management services, TFS
does so on a fee basis. TFS charges an annual fee based upon a percentage of the market value of

the assets being managed by TFS. TFS’s annual fee is exclusive of, and in addition to brokerage
commissions, transaction fees, and other related costs and expenses which are incurred by the
client. However, TFS does not receive any portion of these commissions, fees, and costs. TFS’s
annual fee is prorated and charged quarterly, in arrears, based upon the market value of the assets
being managed by TFS on the last day of the previous quarter. The annual fee varies between 0.50%
and 1.50%, depending upon the market value of the assets under management and the type of
investment management services to be rendered.

The Firm includes cash in a client’s account in determining the valuation for billing purposes. The
Firm may, in its sole discretion, not include cash in determining the fee, especially where a client
has a high percentage of cash for reasons other than Firm’s investment management decision.
TFS, in its sole discretion, may negotiate to charge a lesser management fee based upon certain
criteria (i.e., anticipated future earning capacity, anticipated future additional assets, dollar amount
of assets to be managed, related accounts, account composition, pre-existing client, account
retention, pro bono activities, etc.).

Additional Fees and Expenses

As further discussed in response to Item 12 (below), TFS generally recommends that clients utilize
the brokerage and clearing services of Fidelity Institutional Wealth Services (“Fidelity”) and Charles
Schwab & Co., Inc. (“Schwab”) for investment management accounts.

TFS may only implement its investment recommendations after the client has arranged for and
furnished TFS with all information and authorization regarding accounts with appropriate financial
institutions. Financial institutions include, but are not limited to, Fidelity, Schwab, and other
broker-dealer recommended by TFS, broker-dealer directed by the client, trust companies, banks
etc. (collectively referred to herein as the “Financial Institutions”).

Additionally, clients incur certain charges imposed by the Financial Institutions and other third
parties such as securities brokerage commissions, transaction fees, custodial fees, recharges
imposed directly by a mutual fund or ETF in the account, which shall be disclosed in the fund’s
prospectus (e.g., fund management fees and other fund expenses), fees and expenses associated
with alternative investments, deferred sales charges, odd-lot differentials, margin costs, reporting
fees, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage
accounts and securities transactions. Such charges, fees and commissions are exclusive of and in
addition to TFS’s fee.

Fee Debit

Clients generally provide TFS with the authority to directly debit their accounts for payment of the
investment advisory fees. The Financial Institutions that act as the qualified custodian for client
accounts, from which the firm retains the authority to directly deduct fees, have agreed to send a
statement to the client, at least quarterly, indicating all amounts disbursed from the account
including the amount of the management fees paid directly to TFS.

Fees for Management During Partial Quarters of Service

For the initial period of investment management services, the fees shall be calculated on a pro rata
basis. The Agreement between TFS and the Client will continue in effect until terminated by either
party pursuant the terms of the Agreement. TFS’s fees shall be prorated through the date of
termination and any remaining balance shall be charged to the client, as appropriate.

Additions may be in cash or securities provided

ERISA Accounts as 3(21) Investment Adviser and as 3(38) Investment Manager

TFS is deemed to be a fiduciary to advisory Clients that are employee benefit plans or individual
retirement accounts (IRAs) pursuant to the Employee Retirement Income and Securities Act
(“ERISA”). As such, TFS is subject to specific duties and obligations under ERISA and the Internal
Revenue Code that include, among other things, restrictions concerning certain forms of
compensation.

To avoid engaging in prohibited transactions, TFS may only charge fees for investment advice about
products for which our firm and/or our related persons do not receive any commission of 12b-1
fees, or conversely, investment advice about products for which our firm and/or related persons
receive commissions or 12b-1 fees, however, only when such fees are used to offset TFS advisory
fees.
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Item 7. Types of Clients
TFS provides its services to Individuals, Pension, Profit Sharing Plans, Defined Benefit Plans, 403b,
457, 401(k)plans, Trusts, Estates, Corporations and Business Entities. TFS does not impose a
minimum portfolio size or minimum annual fee. The Firm does, however, have a $10,000 minimum
for using its models.