Directional Financial Services, LLC (“Directional”, “DFS”, “we”, “us”) is a wholly-owned subsidiary of Empirical Financial Services, LLC doing-business-as Empirical Wealth Management (“Empirical”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”) pursuant to the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Directional was started by Kenneth Smith (Empirical’s majority owner and CEO) in 2014 to meet the investment needs of clients that do not meet the minimum requirements of Empirical. Kenneth Smith started Empirical in December 2009. Empirical is a spin-off from Empirical Wealth Management, LLC an Oregon company that Ken was a founding member of in 2006. On December 31, 2012, Empirical purchased Empirical Wealth Management, LLC from its remaining original members, re-merging both companies as a Washington LLC under the name of Empirical Financial Services, LLC doing-business-as Empirical Wealth Management. Asset Management Directional provides portfolio management services both through Institutional Intelligent Portfolios™, an automated, online investment management platform for use by independent investment advisors and sponsored by Schwab Performance Technologies, Inc. (the “Program” or “SIIP” and “SPT,” respectively), as well as for clients that are not involved with the Program (“Non-SIIP Clients”). The portfolios of clients enrolled in the Program are monitored by the online investment management platform sponsored by SPT. Non-SIIP Clients are monitored manually by Directional’s trading team. Through the Program, Directional offers clients a range of investment strategies that we have constructed and manage, each consisting of a portfolio of exchange traded funds (“ETFs”) and a cash allocation. For Non-SIIP Clients, the investment strategies offered that Directional constructs and manages consist of both a portfolio of ETFs, a portfolio of mutual funds, and a cash allocation. For all clients, the client’s portfolio is held in a brokerage account opened by the client at SPT’s affiliate, Charles Schwab & Co., Inc. (“CS&Co”). Directional is independent of and not owned by, affiliated with, sponsored by, or supervised by SPT, CS&Co, or their affiliates (together, “Schwab”). The Program is described in the Schwab Performance Technologies, Inc. Institutional Intelligent Portfolios™ Disclosure Brochure (the “Program Disclosure Brochure”), which is delivered to clients by SPT during the online enrollment process. Directional, and not Schwab, is the client’s investment advisor and primary point of contact with respect to clients enrolled in the Program, as well as those not enrolled in the Program. We are solely responsible for choosing a suitable investment strategy and portfolio for the client’s investment needs and goals, and managing that portfolio on an ongoing basis. SPT’s role with regard to the Program is limited to delivering the Program Disclosure Brochure to clients and administering the Program so that it operates as described in the Program Disclosure Brochure. Directional’s advisory services include, among other things, providing advice regarding asset allocation and the selection of investments, which is guided by the stated objectives of each client. In addition, Directional considers its client’s risk profile and financial status prior to making any recommendations. Directional maintains ongoing and continuous discretionary authority and management for client accounts, subject, however to any reasonable restrictions the clients have placed on their accounts. Directional will choose which model is appropriate for each client based upon the items discussed above. Directional offers several investment portfolios designed to meet various needs, but portfolios are not designed specifically for each client. Directional has contracted with SPT to provide us with the technology platform and related trading and account management services for the Program. This platform enables us to make the Program available to clients online and includes a system that automates certain key parts of our investment process (the “System”). The System includes an online questionnaire that helps us determine the client’s investment objectives and risk tolerance and select an appropriate investment strategy and portfolio. Clients should note that we will recommend a portfolio via the System in response to the client’s answers to the online questionnaire. The client may then indicate an interest in a portfolio that is one level less or more conservative or aggressive than the recommended portfolio, but we then make the final decision and select a portfolio based on all the information we have about the client. The System also includes an automated investment engine through which we manage the client’s portfolio on an ongoing basis through automatic rebalancing and tax-loss harvesting (if

the client is eligible and elects). Directional also offers a separate financial planning service that clients may elect to utilize. The financial planning service is designed to provide on-going, non-discretionary consulting services on the following topics: Cash Flow Planning, Insurance Planning, 401k Assessment and Recommendations, Mortgage Assessment, and School Loan Assessment. Clients who require more complex planning topics may opt-in for hourly financial planning to replace or supplement the on-going financial planning. Clients do not pay fees to SPT in connection with their services, but we charge clients an investment advisory fee for our services as described below under Item 5 Fees and Compensation. Our fees are not set or supervised by Schwab. Clients do not pay brokerage commissions or any other fees to CS&Co. Schwab does receive other revenues in connection with the Program, as described in the Program Disclosure Brochure. Directional does not currently pay Schwab fees for its services under the Program, but this arrangement is subject to change. Directional will not be required to pay fees to Schwab for the services it provides under the Program so long as Directional and/or its affiliated entity, Empirical, maintains at least $100 million in client assets in accounts custodied at CS & Co. that are not enrolled in the Program. If Directional and/or Empirical does not meet this condition, then Directional would be required to pay Schwab an annual fee of 0.10% on the value of its clients’ assets in the Program. In this situation, the fee would not be passed down to clients and would be absorbed by Directional exclusively. This fee arrangement presents a conflict of interest, as it provides an incentive for Directional to recommend that client accounts be maintained with Schwab. However, per Directional’s code of ethics and as a fiduciary, supervised persons of Directional will recommend that a client’s assets be custodied wherever is in their best interest and will place the firm’s and the individual’s economic benefits secondarily. Directional’s Compliance Officer, Justin Buller, remains available to address any questions that a client or prospective client may have regarding the above conflict of interest. As of December 31, 2023, Directional managed $9,341,251 on a discretionary basis and $0 on a nondiscretionary basis. Retirement Accounts – Acknowledgement of Fiduciary Status under ERISA and the Code Guidance from the US Department of Labor (“DOL”) under Title I of the Employee Retirement Income Security Act (“ERISA”) and/or the Internal Revenue Code (“Code”), requires us to inform you that when we provide investment advice to you regarding your retirement plan or participant account or your individual retirement account (collectively retirement accounts), we are fiduciaries within the meaning of ERISA and/or the Code, as applicable, which are laws governing retirement accounts. The way we make money creates some conflicts with your interests, so for retirement accounts we operate under a special rule that requires us to act in your best interest and not put our interest ahead of yours. Under this special rule’s provisions, we must:
• Meet a professional standard of care when making investment recommendations (give prudent advice);
• Never put our financial interests ahead of yours when making recommendations (give loyal advice);
• Avoid misleading statements about conflicts of interest, fees, and investments;
• Follow policies and procedures designed to ensure that we give advice that is in your best interest;
• Charge no more than is reasonable for our services; and
• Give you basic information about conflicts of interest. Retirement Account Rollovers When leaving an employer, you typically have four options regarding your existing retirement plan: 1. leave the assets in the former employer’s plan, if permitted, 2. roll over the assets to the new employer’s plan, if one is available and rollovers are permitted, 3. roll over the assets to an Individual Retirement Account (“IRA”), or 4. take a full withdrawal in cash, which would result in ordinary income tax and a penalty tax if you are under age 59 1/2. If we recommend that you roll over your 401(k) or other qualified plan assets to an IRA, this rollover recommendation presents a conflict of interest in that we would receive compensation (or may increase current compensation) when investment advice is provided following your decision to roll over your plan assets. We will discuss your retirement plan options including retention of your 401(k) or qualified plan assets with your current plan, if allowed. Prior to making a decision you should carefully review the information regarding your rollover options. You are under no obligation to rollover retirement plan assets to an account managed by us.