Western Financial Corporation

Item 5: Fees & Compensation

    Our fees are listed below so you will know how much you are charged for our advisory services.

A. Description of How We Are Compensated For Our Advisory Services Provided to You.

    Portfolio Management

    Customized Portfolio Management Services

    WFC charges advisory fees for its Customized Portfolio Management (CPM) services based on a
    percentage of the market value of the portfolio according to the following tiered fee schedule:

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              Assets Under Management           Annual Percentage of Assets Charged
                     $0 to $250,000                           2.00%
                  $250,001 to $500,000                        1.50%
                 $500,001 to $1,000,000                       1.25%
                $1,000,001 to $5,000,000                      1.00%
               $5,000,001 to $10,000,000                      0.80%
                   $10,000,000 - Above                        0.30%

    As an example, if the total value of all combined portfolios managed under the individual client’s
    Investment Management Agreement (IMA) is $1,500,000 the management fee will be 1.33%
    calculated as follows:

    ($250,000 @ 2.00%, $249,999 @ 1.50%, $499,999 @ 1.25%, $500,002 @ 1.00%)

    Fees are negotiable at our sole discretion and some accounts are under different fee schedules
    honoring prior agreements and/or for CPM clients, aggregated by household to determine the
    maximum portfolio annual fee. We also manage some family/related and friends’ accounts at no
    charge.

    Western Retirement Plan Program (WRPP)

    WRPP fees are charged to the company/plan sponsor or the participant. WFC charges for its
    consultation services on “as an agreed upon basis” based upon the scope of the services to be
    provided and advisory fees for both Plan Level Discretionary Investment Management Services and
    Plan Level Non-Discretionary Investment Advisory Services based on a percentage of the market
    value of the plan assets under WFC’s management according to the following tiered-fee schedule:

            Plan Assets Under Management          Annual Percentage of Assets Charged
                   First 0-$1,000,000                           0.65%
             Next $1,000,001 to $2,000,000                      0.60%
             Next $2,000,001 to $5,000,000                      0.50%
             Next $5,000,001 to $10,000,000                     0.40%
            Next $10,000,001 to $25,000,000                     0.30%
                   Above $25,000,000                          Negotiable

    Fees for services provided by WFC to WRPP plan clients are specified in either a WFC Consulting
    Agreement or WFC Advisory Agreement and may be further specified in a Third-Party Service
    Provider Agreement between the client’s chosen trust company (custodian) and the plan sponsor
    whereby WFC acts as the third party service provider. Other third party service providers, such
    as accountants, attorneys or other consultants may also enter into Third Party Service Provider
    Agreements with the plan for fees which WFC does not participate in.

    For its Plan Level Discretionary Investment Management and Plan Level Non-Discretionary
    Investment Advisory services, WFC’s fees are paid from plan assets and are prorated across all
    plan investments unless specified otherwise. Plans managed under our WRPP services are
    subject to a $2,000 minimum annual fee per plan.

    Billing Method

    Fees are calculated and paid as follows:

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     Customized Portfolio Management (CPM) Services:

     We charge one fourth of the annual fee each quarter in advance based upon the market value of
     the client’s portfolio as of the last day of the prior calendar quarter.

     The formula used for the calculation is as follows: (Annual Rate) x (Total Assets Under
     Management at Prior Quarter End) / 4. For new client accounts, the first payment is a pro-rata
     calculation based upon when the client’s funds are deposited into their custodial account(s). The
     calculation will take into consideration the number of days remaining in the quarter and the
     initial value of the portfolio/receipt of funds. The formula used to calculate the initial advisory
     fee would be as follows: (Result of Quarterly Calculation) x (Days Remaining in Quarter) / (Total
     Number of Days in Quarter).

     For advisory fee calculation purposes, a calendar quarter is a period beginning on January 1, April
     1, July 1, or October 1 and ending on the day before the next quarter. A day is any calendar day
     including weekends and holidays. For new accounts, the number of days remaining in the quarter
     is the number of calendar days following the effective date of our Investment Management
     Agreement (IMA) and the date the new account has been funded. Additions and withdrawals
     greater than $5,000 or that otherwise result in a fee adjustment in excess of $100 will be prorated
     to the date funds were received or withdrawn.

     Western Retirement Plan Program (WRPP) Services:

     For WRPP services, we charge one fourth of the annual fee each quarter in arrears based upon
     the market value of the plan as of the last day of the quarter. Consultation services are billed to
     the plan sponsor when the services have been completed.

B. Description of Whether We Deduct Fees from Clients’ Assets or Bill Clients for Fees Incurred

     Advisory fees are customarily withdrawn directly from the client’s custodian account; however,
     clients may choose to pay by check upon request. With client authorization, WFC will
     automatically withdraw WFC’s advisory fee from the client’s account held by an independent
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Item 7: Types of Clients & Account Requirements

WFC provides investment management services to the following:

     ▪     Individual investors
     ▪     Revocable and Irrevocable Trusts, Estates and Charitable Organizations
     ▪     Retirement plans and retirement plan fiduciaries
     ▪     Participants of retirement accounts including Individual Retirement Accounts (IRAs),
           401(k)s, 403(b)s, and profit sharing plans
     ▪     High net worth individuals
     ▪     Corporations, limited liability companies, and other business types

Our requirements for opening and maintaining accounts or otherwise engaging us:

     ▪     WFC generally requires clients to maintain a minimum portfolio size of $250,000, which WFC
           may reduce or waive at our discretion. Plans managed under our WRPP services are not
           subject to a minimum account size.