The Kocen Financial Group Inc

Item 5: Fees and Compensation

Fees for Financial Plans are charged at a negotiated flat rate and are based on the complexity
of the plan. Plans generally range from $3,000 – 5,000 for the first year plan. The payment in
full is due upon the signing of the Advisory Agreement, unless otherwise negotiated as a staged
payment. Generally annual updates are done when requested at no charge for active
Investment Advising clients. An update fee may apply for special circumstances.

Fees for Investment Advising are computed on an annualized percentage of assets under
management basis. The fee is generally negotiated at a rate between 0.8% to 1% annualized
based on different factors. Most accounts are at the 1% rate. Accounts over $2 million are
subject to further negotiation. The fee is quoted for the whole portfolio. This includes mutual
funds under KFG’s management and for the portion of portfolios allocated to third party money
managers. All billing by KFG is in addition to fees charged by the third party money managers.

Fees for Business Consulting are structured and mutually agreed upon with clients on a case
by case basis prior to any work being performed. Because the specific nature and amount of
the consulting support varies for each client situation, business consulting fees will also vary.
Fees will also include direct out-of-pocket expenses incurred by KFG in the performance of the
business consulting support. All fees and direct out-of-pocket expenses will be discussed and
mutually agreed upon upfront prior to any services being consulting services provided.

Fees for Alternative Investments, including REITs, Business Development Companies, and
Private Placements are computed on an annualized percentage of assets under management at
an annual rate of 1.5%. Fees for these investments are subject to negotiation based on the size
of the account and nature of the advisory relationship. This fee only applies to the portion of a
client’s money invested in Alternative securities.

Fees for Sub-Advisory Investment Management, are computed on an annualized percentage
of assets under management at a maximum annual rate of 1.00%. Sub-Advisory Investment
Management fees are collected quarterly in arrears, based on the value of the assets under
management on the last business day of the previous calendar quarter.

Clients who hold multiple accounts with KFG and are invested in multiple portfolio strategies
typically pay different fees per account based upon the portfolio strategy employed.

These fees are for advisory services only and do not include any transaction fees or
commissions, which may be charged separately by the custodial broker/dealer firm. See the
section heading Brokerage Practices for more information.

The fee will be payable quarterly in arrears. The first payment is assessed and due at the end
of the first calendar quarter and will be assessed pro rata in the event the Agreement is
executed at any time other than the first day of the current calendar quarter. Subsequent
payments are due and will be assessed on the first day after the end of each calendar quarter
based on the value of the account assets under supervision as of the close of business on the
last business day of that quarter.

Unless other arrangements are made, all Investment Advising fees due KFG will be deducted
directly by the custodian holding the clients’ funds and securities in accordance with statements
prepared and submitted to the custodian by KFG. The custodian will provide periodic account
statements to the client. Such statements will reflect all fee withdrawals by KFG. It is the

client’s responsibility to verify the accuracy of the fee calculation. The custodian will not
determine whether the fee is properly calculated.

Investment Advisor Representatives (“IA Reps”) of our firm may also be Registered
Representatives of a broker/dealer, and as such may receive commission-based compensation
for the sale of securities and other investment products. KFG and its IA Reps are only
compensated on a fee-basis for the securities held in the advisory portfolios. Double-dipping,
where an IA Rep receives both fee-based compensation and commissions on portfolio assets is
expressly prohibited. Mutual funds recommended under advisory services will be “no-load” or
“load-waived.” Clients are not obligated to purchase investment products recommended by
KFG or affiliated firms.

Fees are not collected for services to be performed more than six months in advance.

Advisory fees are quoted at a negotiated rate as disclosed above. Fees may be waived for
employees, relatives, and special accommodations.

Advisory services similar to those offered by KFG may be found elsewhere at lower or higher
rates.

In addition to fees paid to KFG for advisory services with respect to clients' investments in
mutual funds, clients may be charged additional fees on the mutual fund investment to pay for
the mutual funds’ management, marketing, and reporting expenses. Mutual funds also pay
advisory and/or management fees to some investment advisors. KFG is not compensated by
mutual funds.

Investment Advising services will continue until either party terminates the Agreement on five
(5) business days written notice.

If termination occurs prior to the end of a calendar quarter, the client’s account will be debited on
a pro-rata basis for any advisory fees due as of the day KFG receives written notice of
termination. If the account is transferred prior to advisory fees due being charged to the
account, the client will be invoiced for any advisory fees due KFG for its services prior to
termination.

For Financial Plans the client may terminate the agreement at any time and a refund of the
unearned fees will be made based on time and effort expended before termination. The
agreement terminates upon delivery of the plan. At this time no refunds will be made.
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Item 7: Types of Clients and Account Minimums

KFG provides advisory services to individuals, pension and profit sharing plans and other
ERISA accounts, trusts, estates, and business entities.

The recommended minimum account size for Investment Advising is $600,000; however we are
willing to open smaller accounts depending on the circumstances. Grandfathered accounts may
also have lower minimums.

There is no minimum for clients retaining financial planning services.