Barrons Presentation Serving Mass Affluent

How investment advisors can serve the mass affluent profitably and as a fiduciary.

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2. CASTING A WIDER NET:
SCALING TO SERVICE A MASS
AFFLUENT CLIENT BASE
Top Independent Advisors Summit
Phoenix, AZ | March 19, 2014
Presenters: Martin Bicknell + Steven Lockshin

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THE MARKET IS HUGE…
THE OPPORTUNITY
IS EVEN GREATER

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While not clearly defined, the market
is enormous.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Number of HH Investable Assets
HNW to UHNW: >$5M
Affluent: $2M to $5M
Mass Affluent: $500k to $2M
Middle Mkt: $100 to $500k
Mass Mkt: <$100k
118 M HH $27.5 Trillion
Source:(Cerulli(
HH (000) Assets ($ BN)
724 $8,354
1,496 $4,675
8,066 $7,342
24,155 $5,484
83,220 $1,654

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And more investable retail assets
are coming…
Source:(Federal(Reserve(Flow(of(Funds(June(2012,(Cerulli(and(Envestnet(
Individuals are retiring
As individuals retire,
semi-liquid assets become
liquid assets resulting in
$40+ trillion investable
retail assets
$20
TRILLION
Semi-Liquid
Assets
$40+
TRILLION
Liquid Assets

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Mass affluent consumers present
an underserved market.
*Identifying the emerging affluent is as much art as science. We
identify them as households that typically are headed by adults
younger than age 45 who have at least some college education
and a minimum annual household income of $75,000.
Emerging (7%)
Affluent (16%)
Wealthy (9%)
PwC defines the mass affluent
consumer segment to include the
following:
• Wealthy: Households with investable
assets ranging from $500,000 to
$1 million.
• Affluent: Households with investable
assets ranging from $100,000
to $500,000.
• Emerging affluent
*
: Households that
are likely to reach the affluent level of
wealth within the next 5-to-10 years
(and as such, are worth getting to
know now).
Households
High net
worth
Mass
affluent
32%
Mass
consumer
Emerging (2%)
Affluent (22%)
Wealthy (27%)
Investable Assets
High net
worth
Mass
affluent
51%
Mass
consumer
Source:(PWC(FS(Viewpoint,(December(2012(

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• Given the pricing power of the high net worth client segment, the
Emerging Affluent are less likely to result in price compression.
• The Emerging Affluent is an untapped market that has historically
been overlooked by advisory firms due to the size of their individual
investable assets, but the collective size of this client segment represents
an enormous opportunity for firms who can create a business model
designed specifically for the needs of the Emerging Affluent.
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Why focus on the emerging affluent?

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Financial institutions struggle to
win the business of the mass affluent.
Retail Banks
Standardized
processes
Discount
Brokers
Lack of physical
presences
Insurance
Companies
Restricted
customer view
Wealth
Managers
High-cost
infrastructure
Organizational silos,
product pushing,
& declining trust
Mass Customer
Focus
Specialized
Product Focus Model Focus
Migration
Threat
Source:(PWC(FS(Viewpoint,(December(2012(

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ADVISORS ARE JUST
STARTING TO FIGURE
OUT HOW TO SERVE
THE MASS AFFLUENT
MARKET PROFITABLY

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Some examples include…

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WHAT WE’RE DOING

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AdvicePeriod

Key Services/Differentiators:
• Comprehensive Wealth Planning: AdvicePeriod is focused on
providing expert advice in all areas of wealth planning (e.g., trust &
estate, retirement, cash flow management, portfolio tax
minimization, guidance on philanthropy, and risk management)
• Launched in 2014, AdvicePeriod is technology driven, allowing
clients of all sizes to access the services of the firm
• Entire infrastructure in the cloud
• Completely paperless; all reporting is rendered online
• Predominantly passive
• Leveraging Fortigent UMA / Betterment Institutional for Mass
Affluent client base
AdvicePeriod focuses clients on
the important decisions
necessary to manage their
wealth. By combining actionable
planning advice with objective
investment guidance,
AdvicePeriod strives to enable
clients to achieve their financial
goals and shape their legacy for
generations to come.

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AdvicePeriod

*A person in a position of authority whom the law obligates to act solely on behalf of the person he or she represents and in good faith.
Unlike people in ordinary business relationships, fiduciaries may not seek personal benefit from their transactions with those they represent.
ESTATE + TAX
PLANNING
ASSET
ALLOCATION/
PORTFOLIO
RE-BALANCING
FEES


MANAGER
SELECTION


QUALIFIED EXPERT
FIDUCIARY* ADVICE
Value that truly impacts your wealth:

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Independence by Convergent
TM
Key Services/Differentiators:
• Experienced Professionals: Advisors are well-rounded
professionals with extensive experience working with high
net worth families.
• Independence Interface: Integrated use of technology is designed
to enhance interaction with a client’s wealth advisor. By employing
a variety of new innovations, Independence by Convergent™
delivers timely, individual advice and tools that include:
− Face-to-face video conferencing through a tablet issued
to each client;
− Access to all documents and reporting tools through a
secure online vault;
− Consolidated performance reporting for all your
Independence by Convergent™ assets.
Independence by Convergent™
delivers to the $1 million investor
the strategies and techniques
used by the $100 million
investor through a revolutionary
combination of technology,
financial expertise, and personal
service.

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Independence by Convergent
TM

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FirstPoint Financial

Key Services/Differentiators: .
• Holistic Wealth Planning: FirstPoint shares the core offering of
MWA which is holistic wealth planning with fiduciary responsibility
and no account minimums.
• Technology Offering:
− Online access to account information
− Ease of transitioning accounts
− Account aggregation
− Online vault
− Access to planning and investment tools
FirstPoint Financial is
specifically designed to meet the
needs of the Emerging Affluent.
FirstPoint has leveraged the
resources of MWA and scaled it
to build the Emerging Affluent
service model.

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FirstPoint Financial

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TECHNOLOGY IS THE
KEY TO SUCCESS

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The industry buzz...

• Technology (i.e., Digital Advice) is
already influencing the industry.
• Leveraging a digital platform will
create operating efficiency
(margin) and should help protect
against disruption.
“Technology will be the key that
unlocks the mass-affluent
market for financial advisors.”
“It’s almost second nature to
embrace online tools.”

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The era of automated advisory is here.
1939 +
1940 Acts
Setup regulated
brokerage industry


1957
S&P 500 is
introduced
1993
1
st
Internet stock
trade completed
1975
SEC deregulates brokerage industry
Discount brokers are born; Schwab
1977
Merrill Lynch
introduces CMAs
1991
1
st
Consumer ETF launched
Rise of online & discount trading
• Tech driven
• Real time, least expensive execution
Advisors
• Customers seek guidance
• Access typically for accounts >$500k
Automated management
• Lowest cost DIY solution
• Data-driven advice
• No minimums
• Highly scalable
20 SourceInsert(

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Innovators Early
Adaptors
Early
Majority
Late
Majority
Laggards
Trial
Users
Everybody
Else
Rogers’s Market Segments
Big Bang
Market Segments
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“Big Bang Disruption” – being early matters.
SourceInsert(

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The speed of innovation is increasing,
and the cost of failure is decreasing.
I skate to where the puck is going to be,
not where it has been. - Wayne Gretzky “! ”!
Data Storage!
Maps
/GPS!
Travel Agents! Video!Music Industry!Taxi!

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How are you using technology
to optimize your client experience?
What business are we in? If it's advice, then use technology to more
efficiently create space to advise you clients!
• Are you truly using technology today? Ask yourself:
­ How often do you update your online client experience?
­ What’s your digital marketing strategy? Retargeting, SEO, SEM,
conversion metrics? Do you conduct A/B testing? Multi-variable testing?
­ Do you connect with existing and potential clients through social media?
­ Remembering Kodak
• Are advisors innovating? Do we even have the technical and financial
resources
to innovate?

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WHAT WILL THE
FIRM OF THE FUTURE
LOOK LIKE?

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Consumers expect better technology.
Technology is changing the way consumers access financial services.
Consumers adoption of tech is dramatically outpacing
their advisors’ adoption and it’s coming from every direction.

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The firm of the future will meet consumer
expectations.
• Technology enabled
• Mobile enabled for consumers and advisors alike
• Extremely for consumers to access their advisors (chat, video-
conference, online scheduling, etc.)
• Allows self serve (i.e., what banks did with ATMS, airlines with kiosks,
and travel with online web technology)
• Separate advice from product
• Make the complex simple for consumers
• Big data to make better decisions
• Continuous improvement

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What is your value proposition?
Commoditization
is the industry talk
– what happens
when consumers
figure it out?
The primary value in an
advisory relationship
is the planning and
the connection
between advisor/client.
Everything else should
be made efficient.
Today we are a
poorly trusted
industry.
Active v. passive is a religious
argument beyond this discussion (! )!

28. DEDICATED
TECHNOLOGY FIRMS
ARE COMPETING
ALREADY

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Separate
advice layer
Human
Digital
Integrated
Digital Advisor competitive landscape.
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30. THANK YOU
MARTIN BICKNELL | [email protected]
STEVEN LOCKSHIN | [email protected]

31. Past Performance Is No Guarantee Of Future Performance. Any opinions expressed are current only as of the time made and
are subject to change without notice. This report may include estimates, projections or other forward looking statements,
however, due to numerous factors, actual events may differ substantially from those presented. The graphs and tables making
up this report have been based on unaudited, third-party data and performance information provided to us by one or more
commercial databases. Additionally, please be aware that past performance is not a guide to the future performance of any
manager or strategy, and that the performance results and historical information provided displayed herein may have been
adversely or favorably impacted by events and economic conditions that will not prevail in the future. Therefore, caution must
be used in inferring that these results are indicative of the future performance of any strategy, index, fund, manager or group
of managers. All performance numbers shown herein are net of actual fees and expenses and include the reinvestment of
dividends and other income, as reported by the manager and/or by the commercial databases involved. While we believe this
information to be reliable, AdvicePeriod bears no responsibility whatsoever for any errors or omissions. Index benchmarks
contained in this report are provided so that performance can be compared with the performance of well-known and widely
recognized indices. The volatility of these indices may be materially different from that of the fund. You cannot invest directly
in an index. Index results assume the re-investment of all dividends and interest. Moreover, the information provided is not
intended to be, and should not be construed as, investment, legal or tax advice. Nothing contained herein should be construed
as a recommendation or advice to purchase or sell any security, investment, or portfolio allocation. Any investment advice
provided by AdvicePeriod is client specific based on each clients' risk tolerance and investment objectives. This presentation is
not meant as a general guide to investing, or as a source of any specific investment recommendations, and makes no implied
or express recommendations concerning the manner in which any client's accounts should or would be handled, as
appropriate investment decisions depend upon the client's specific investment objectives.

Non-deposit investment products are not FDIC insured, are not deposits or other obligations of AdvicePeriod, are not
guaranteed by AdvicePeriod and involve investment risks, including the possible loss of principal.
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