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September 28-29, 2015 | NY

The 13th Annual


Managed Accounts &
UMA Summit
Capitalize on the Latest
MA/UMA Growth
Opportunities

Thank you for attending the conference!


Financial Research Associates is an
accredited institution and we pride ourselves
on the cutting edge presentations delivered at
our conferences. We make every effort to
secure advance copies of these presentations
for your continued review following the close
of the conference.

If you have any additional questions or


requests for information beyond what is in this
document book, please feel free to contact us at
any time.

Thank You

From time to time due to proprietary concerns


or internal legal constraints, speakers are
unable to submit presentations for duplication
and distribution. In this rare case, we
encourage you to utilize the contact details
provided in their biography to request a single
copy of the presentation.

Financial Research Associates


Proudly Presents

Proudly Presents

The 13th Annual


Managed Accounts &
UMA Summit

September 28-29, 2015


The Princeton Club | New York, NY

PresentsThe13thAnnualManagedAccounts&UMASummit
CapitalizeontheLatestMA/UMAGrowthOpportunities

September2829,2015|ThePrincetonClub,NYC

DAYONE:Monday,September28,2015

8:008:35

8:358:45

8:459:45

Registration&ContinentalBreakfast
ChairsOpeningRemarks

PaulG.Ahern,ManagingPrincipal
WinslowCapitalGroup,LLC
OpeningPanel:PlatformizationoftheIndustry:IntegratingPlatformsandReducingSilos

9:4510:45

Moderator:
DanielleVerbrigghe,Reporter
FundFire

Panelists:
RussellTipper,ManagingDirector,ManagedSolutionsGroup
MerrillLynchGlobalWealthManagement

JasonB.Moore,ManagingDirector,HeadofAdvisoryPrograms
MorganStanleyWealthManagement

AloisPirker,ResearchDirector
AiteGroup

CemEr,CFA,Director,ProductManagement
CharlesRiverDevelopment
GoalBasedInvestments&AlignmentofInterests:ExecutingtheBiggestTrendintheIndustry
JackSharry,ExecutiveVicePresident,StrategicDevelopment
LifeYield,LLC

MarkD.Sloss,ExecutiveDirector,SeniorPortfolioManager
HeadofPortfolios&ModelsforInvestmentManagement
UBSInvestmentManagement

10:4511:00

MorningBreakSponsoredBy:

11:0011:45

11:4512:30

12:301:45

1:452:45

2:453:45

BenchmarkingAgainstGoalsandPerformance

MarkD.Sloss,ExecutiveDirector,SeniorPortfolioManager
HeadofPortfolios&ModelsforInvestmentManagement
UBSInvestmentManagement

WalterHartford,CFA,SeniorVicePresident,Marketing
RyanLabsAssetManagement

RepPMandUMAs:Qualifications,Performance,andExpectations

RichardSlater,ExecutiveDirector,HeadofFAandClientDiscretionaryAdvisoryPrograms
MorganStanleyWealthManagement

CemEr,CFA,Director,ProductManagement
CharlesRiverDevelopment

RobertFedele,Director,ProductManagement
Fiserv
NetworkingLuncheonSponsoredBy:

TrackA:
Marketing&GrowthStrategies

Chairperson

KevinD.Mahn,President&ChiefInvestment
Officer
Hennion&WalshAssetManagement

RoboAdvisersPartI:Threatening orFullof
Opportunity?

TomSelby,Partner
Marlin&Associates

AloisPirker,ResearchDirector
AiteGroup

RichDion,ExecutiveVicePresident,Strategic
Partnerships

Envestnet

RoboAdvisersPartII:DigitizingEffortsin
OrdertoReach&EffectivelyOperatewiththe
NextGeneration

GavinSpitzner,President
WealthConsultingPartners,LLC

MatthewR.Kane,Cofounder&ChiefNinja
Hedgeable

TrackB:
Technology&Operations

Chairperson

PaulG.Ahern,ManagingPrincipal
WinslowCapitalGroup,LLC

WhatDoesitTaketoAchieveScalability&
Suitability?

PaulG.Ahern,ManagingPrincipal
WinslowCapitalGroup,LLC

TomKane,ManagingPrincipal
KaneCarlton,LLC

OvercomingOperationalShortcomings

SimonAlgar,Consultant
WealthReports

DougBartels,VicePresident,Wealth
Management
NorthernTrust


3:454:00

4:004:45

4:455:45

AfternoonBreakSponsoredBy:

BuildingMomentum,CapturingMarket
Share,andEffectiveStrategiestoRetainit

KeithW.Walker,President
FirstCitizensInvestorServices

CocktailReceptionImmediatelyFollowing

TakingaCloseLookattheDOLRuleand
ResponsibilitiesanditsImpactonthe
Industry

DanielR.Kleinman,Partner
MorganLewis&BockiusLLP

RichardD.Marshall,Partner
KattenMuchinRosenman


DAYTWO:Tuesday,September29,2015

8:008:45

ContinentalBreakfast

8:459:00

ChairsRecapofDayOne
KevinD.Mahn,President&ChiefInvestmentOfficer
Hennion&WalshAssetManagement

9:0010:00

ATwoPartAssetFlowDiscussion:
PartI:SuccessfullyPositioningAlternativeInvestmentsinYourManagedAccount&UMAPlatform
Moderator:
PaulM.Weisenfeld,Partner
PerellaWeinbergPartnersLP

Panelists:
RussellTipper,ManagingDirector,ManagedSolutionsGroup
MerrillLynchGlobalWealthManagement

ColinJ.Healy,CIMA,AIF,ExecutiveDirector,HeadofBusinessDevelopment,GlobalInvestmentSolutions
HighTower

10:0010:45

PartII:WhatisPromptingETFandIndexFundGrowthandWillitContinue?

Moderator:
PaulM.Weisenfeld,Partner
PerellaWeinbergPartnersLP

Panelists:
JohnStreur,PresidentandChiefExecutiveOfficer,
CalvertInvestments

MichelleM.Fuller,VicePresident,ETFStrategy
PIMCOETFs

10:4511:00

MorningNetworkingBreak

11:0011:45

11:4512:30

AdoptionStrategies:ConvertingtheBusinessModeltoaTamporManagedAccountOffering

PaulG.Ahern,ManagingPrincipal
WinslowCapitalGroup,LLC

GavinSpitzner,President
WealthConsultingPartners,LLC
AchievingRetirementIncomeGoals
MichaelJones,CFA,ChairmanandChiefInvestmentOfficer
RiverfrontInvestmentGroup,LLC

12:301:45

NetworkingLuncheon

1:452:30

BreakingOutoftheUMHVendorHypetoTangleImplementationStrategies

EricLordi,HeadofCrossPlatformDevelopment
BarclaysWealth

2:30

EndofSummit

Dear Conference Participant:

We have developed this event based on extensive


industry research, structuring the topics and gathering
together the speaker faculty based on feedback from
numerous industry participants. Our goal is to provide
you with the most up-to-date industry information
possible, along with top-notch networking
opportunities. Every effort has been made on our part
to obtain the speakers presentations to be included in
the PDF link that you have received via email. If a
speakers presentation is not included in the PDF link,
we ask that you contact the speaker directly. If we have
failed to meet your expectations in any way, please let
us know by completing the evaluation form provided
at this event. Of course, we would like to hear positive
feedback as well!
We appreciate that you have chosen to spend your time
and training dollars with us, and were committed to
satisfying your informational needs. Again, welcome to
this event and thank you for your participation we
truly value your business.
Sincerely,
Lori Medlen, President
Financial Research Associates

Dear Participants

On behalf of Financial Research Associates, I would


like to cordially welcome you to this industry event.

Additional Questions

If you have any additional questions or


requests for information beyond what is in this
document book, please feel free to contact us at
any time.
A link with final speaker presentations will be
forwarded via email approximately
2 weeks after the conference.
Denise Lateefuddin
Financial Research Associates
8430 Rea Rd Suite B
Charlotte NC 28277
704-341-2387 Office
704-341-2641 Fax
dlateefuddin@frallc.com
www.frallc.com

Conference Sponsors

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EN-ENV2-FamilyWealthReport-5.5x8.5-Ad-09.15.indd 1

9/11/15 5:14 PM

CoChairsOpeningRemarks
PaulG.Ahern,ManagingPrincipal
WinslowCapitalGroup,LLC

ProfessionalBiography

PaulG.AhernisthefoundingprincipalofWinslowCapitalGroup,LLC
(winslowcapitalgroup.com),aleadinginstitutionalconsultingfirmforthebankwealth
managementchannel.WinslowCapitalGroup,LLCprovidesnicheexpertiseforbanksandtheir
affiliatesseekingtoachieveefficiencyandsustainableprofitability.Mr.Ahernhas30yearsof
experienceasahandsonpractitionerinbothabanktrustenvironment,andwithinRegistered
InvestmentAdvisers,thelast12yearasaleadingconsultanttobankswealthdivisionsandtheir
affiliates.

WinslowCapitalGroup,LLChelpsinstitutionalclientsmaketherightdecisiononvendor
selection;integrationofaffiliatedbusinesslines;streamliningsystemsofrecord;custody;
internalandexternalreporting;implementation&adoption;howtouseTurnKeyAsset
ManagementPlatforms(TAMP);andPointSolutionModels.Weprovidenicheexpertiseand
guidanceontopicsincludinghelpincraftingastrategicvisionandtacticalimplementationplan
fororganizationsneedingtomaketimelyandcosteffectivetransitions.

Mr.Ahernsassignmentsareonboththebuysideandthesellsideincludingbanktrust
companies;sovereignfunds;RegisteredInvestmentAdvisers;proprietarybankaffiliated
investmentmanagementprograms;separatelymanagedaccountplatforms(SMA);Overlay
technologyfirms;UnifiedManagedAccountofferings(UMA)andUnifiedManagedHousehold
(UMH)architectures.

Mr.AhernearnedabaccalaureatedegreefromtheUniversityofMassachusettsandanMBA
withaconcentrationinfinancefromUniversityofMaine.PriortofoundingWinslowCapital
Group,LLC,Mr.AhernwasExecutiveVicePresidentandthenCEOofBTIFinancialGroupfrom
itsfoundingasanoperatingsubsidiaryofBarHarborBanksharesuntil2002.Mr.Ahernserved
asPresidentofBTIssubsidiary,registeredinvestmentadviserandwasVicePresidentofthe
BoardofDirectorsofBarHarborBankshares,apubliccompany.PriortoMr.Ahernswork
establishingBTIFinancialGroup,heservedasChiefInvestmentOfficerofBarHarborBanking
andTrustCompanyuntilhispromotionwithinthegreaterBanksharesorganizationtoCEOof
BTIFinancialGroup.PrevioustohisemploymentatBarHarborBankingandTrust(operating
subsidiaryofBarHarborBankshares)hewasPortfolioManageratWinslowAssetManagement
(nocorporaterelationtoWinslowCapitalGroup,LLC)aswellasPortfolioManageratWinslow
AssetManagementssuccessororganization,F.L.Putnam/WinslowInvestmentManagement

WinslowCapitalGroup,LLC2012AllRightsReservedwww.winslowcapitalgroup.com

Telephone:207.632.0215

EMail:pahern@winslowcapitalgroup.com

Company(nocorporaterelationtoWinslowCapitalGroup,LLC).Mr.Ahernbeganhis
investmentcareerasaFinancialConsultantwithMerrillLynch.

Page

WinslowCapitalGroup,LLC2012AllRightsReservedwww.winslowcapitalgroup.com

Telephone:207.632.0215

EMail:pahern@winslowcapitalgroup.com

OpeningPanel:PlatformizationoftheIndustry:IntegratingPlatformsandReducingSilos

Moderator:
DanielleVerbrigghe,Reporter
FundFire

Panelists:
RussellTipper,ManagingDirector,ManagedSolutionsGroup
MerrillLynchGlobalWealthManagement

JasonB.Moore,ManagingDirector,HeadofAdvisoryPrograms
MorganStanleyWealthManagement

AloisPirker,ResearchDirector
AiteGroup

CemEr,CFA,Director,ProductManagement
CharlesRiverDevelopment

Danielle Verbrigghe
Danielle Verbrigghe is a reporter at FundFire, covering the wealth management industry. She previously wrote about
investment advisory programs for GatekeeperIQ. Danielle has also written about emerging markets securities for
Bloomberg News and local businesses for the Phoenix Business Journal. She has a Masters degree from the Walter
Cronkite School of Journalism and Mass Communication at Arizona State University and a BA in English Literature
from ASU.

Russell W. Tipper, CIMA


Director, Managed Solutions Group
Merrill Lynch

Russell W. Tipper is Managing Director, Managed Solutions Group within the Global
Wealth Retirement Solutions team (GWRS), a unit of Merrill Lynch. In this role,
Tipper is Head of the Third Party Discretionary and Client Discretionary Platform
teams with responsiblity for driving the strategic direction and sustaining the day-today business for the Consults, Unified Managed Account, Mutual Fund Advisor,
Merrill Lynch Personal Advisor, Strategic Portfolio Advisor, Managed Account
Services and BlackRock Private Investors programs as well as the services of
Managed, Custom Managed and Personalized with Client Discretion in Merrill Lynch
One.
Prior to joining Merrill Lynch, Tipper was Head of Marketing for the Nationwide
Advisory Services Program with responsibility for managing and implementing
marketing support for all fee-based programs. Previously, he was the product manager
for Putnams Taxable/Tax-Exempt Fixed Income and Global Asset Allocation product
lines with responsibilities to enhance strategic positioning, take advantage of
competitive opportunities and support profitable business mix within the retail sales
organization. During that tenure, Tipper was part of several product development
initiatives for Putnams separately managed accounts, global asset allocation and fixedincome product lines. Tipper has been a member of the investment community since
1997.
Tipper holds a masters degree in finance from Northeastern University and a
bachelors degree in economics from Denison University. He also holds the Certified
Investment Management Analyst designation.

Banc of America Investment Advisers, Inc. is an SEC-registered investment adviser and wholly owned subsidiary
of Bank of America, N.A.
Global Wealth & Investment Management is a division of Bank of America Corporation. Banc of America

Investment Services, Inc. , U.S. Trust, Bank of America Private Wealth Management and Columbia Management
are all affiliates within Global Wealth & Investment Management.
Banking products are provided by Bank of America, N.A., Member FDIC.
Investment products:

Are Not FDIC Insured

May Lose Value

Are Not Bank Guaranteed

Banc of America Investment Services, Inc. is a registered broker-dealer, member FINRA and SIPC, and a
nonbank subsidiary of Bank of America, N.A.

Jason B. Moore
Jason is a Managing Director of Morgan Stanley and co-Head of Advisory Solutions and Platforms based
in Wilmington, DE.
Jason joined Morgan Stanley in 1995 as an Associate and served in a variety of roles with increasing
responsibility throughout his first ten years with the Firm. Over the last ten years, Jason has focused
primarily on advisory platform management including the development of Morgan Stanley Wealth
Managements unified managed account program. Jason left Morgan Stanley in 2010 and joined Bank
of America Merrill Lynch as a Managing Director and Head of Third Party Advisory Programs. He
rejoined Morgan Stanley in 2011 as Head of Advisory Platforms and Development. Jason was named a
Managing Director in 2012 and was named the co-Head of Advisory Platforms and Solutions in 2015.
Jason earned a B.S. in Business Administration and an M.B.A from the University of Delaware.

CemEr,Director,CharlesRiverDevelopment
CemleadsCharlesRiversprivatewealthproductmanagementteamandprovidesdirectionandthought
leadershipforwealthmanagementrelatedfunctionality,including,modelingandoptimization.Priorto
joiningCharlesRiver,CemwasaHeadTraderandPortfolioManageratCobblestoneCapitalAdvisors.He
beganhisfinancialservicescareerasaFinancialAnalystforDemirbankA.S.HSBCSecurities.Cemholds
anMBAinFinanceandStatisticsfromRochesterInstituteofTechnologyandisaCFACharterholder.
.

GoalBasedInvestments&AlignmentofInterests:ExecutingtheBiggestTrendintheIndustry

JackSharry,ExecutiveVicePresident,StrategicDevelopment
LifeYield,LLC

MarkD.Sloss,ExecutiveDirector,SeniorPortfolioManager
HeadofPortfolios&ModelsforInvestmentManagement
UBSInvestmentManagement

JackSharry

JackisaprincipalandEVPofStrategicDevelopmentatLifeYieldLLC.
LifeYieldofferssoftwaresolutionstohelpfinancialadvisorsmanageclientinvestmentassetsin
amoretaxefficientmannerbothbeforeandafterretirement,aswellasidentifyingoptimal
SocialSecurityfilingstrategies.LifeYieldssolutionsareusedbymajorfinancialfirmsacrossthe
U.S.toimproveinvestoroutcomesandinachievinglifelonggoals.
Jackhasbeenafinancialindustryinnovatorfornearly30yearsasanexecutiveatMorgan
Stanley,PutnamInvestmentsandPhoenix(nowVirtus)InvestmentPartnersservingasasenior
leaderinsales,marketing,productdevelopmentanddistributionstrategy.WhileatPhoenix,
Jackledateamwhichdevelopedthefirstmultimanagerwholesaledistributionmodelfor
advisoryplatformsandapatentedincomeguaranteeforadvisoryprograms.
JackisChairmanoftheMoneyManagementInstitute's(MMI)GoalsBasedWealth
ManagementCommittee.Heistheauthorofaseriesofresearchpapersonretirementincome,
UnifiedManagedHouseholds(UMH)andGoalsBasedWealthManagement.Jackhasbeen
recognizedasaMMIPioneer,aselectgroupofindustryleadersandwasawardedthe2013
MMIChairmansAwardforthoughtleadership.

Investment Management

Mark D. Sloss
Executive Director, Senior Portfolio Manager
Head of Portfolios & Models for Investment Management
UBS Financial Services Inc.
Mark is Head of Portfolios & Models for UBS Investment Management (IM), a voting member of
IM's investment committees and the Investment Management Research Committee, serves on
the firm's 401(k) investment committee, and consults extensively on portfolio and model
creation for ultra high net worth, family office and institutional clients. As part of his role, he also
drives content and implementation of sustainable and impact investment management
strategies across UBS Wealth Management Americas (WMA). Prior to his present role, Mark
lead Investment Management Research, and before that was responsible for product
development in the private client and institutional advisory businesses at UBS, having initially
joined the firm to head institutional manager research.
Throughout his career he has organized, participated in and spoken at industry events
pertaining to sustainable and impact investing, institutional benchmarking of investment
portfolios, manager research, active and passive portfolio management, private client and
institutional investment in "liquid" alternatives, market research, and retirement account
investing. Among his many activities relating to sustainability, Mark participates in the United
Nations Environmental Programme Finance Initiative North American Task Force on behalf of
WMA, is a member of the UBS Global Sustainability Council, and has been published in the
Journal of Sustainable Finance & Banking and a special report of the Money Management
Institute.
Before joining UBS in 2005, Mark was Director of the Investment Consulting Group and
Secretary to the Investment Committee of New York Life Investment Management (NYLIM).
During his eleven years at NYLIM he was also responsible for enterprise strategic planning and
led due diligence and manager selection for the defined contribution, mutual fund and variable
annuity divisions.
Mark Sloss is a graduate of Northwestern University and holds FINRA Series 7, 63, 66 and 24
designations

9/28/2015

GoalsBasedWealthManagement
ImprovingOutcomesfor
Investors,Advisors&Firms
JackSharry
Principal,LifeYield LLC

Chair,MMIGoalsbased
WealthManagementCommittee

September29,2015

9/28/2015

FirstMMIGBWM
WhitePaper:
October,2014

SignificantInvestmentinGoalsBasedAdvice Why?

ProductAllocation
AssetAllocation
AssetLocation
DynamicWithdrawals

Total

24bps
38bps
52bps
54bps

168bps

Alpha,BetaandNowGamma

IncreaseinIncome:
Upto33%

TaxNeutral

WithLifeYield

IncreaseinLegacy:
Upto45%

TaxNeutral

WithLifeYield

9/28/2015

GoalsBased WealthManagement
Taxable&
QualifiedAccounts
Financial
Plan

Plan
Target

Plan
Monitoring

Investment
Proposal

Location
Optimization

Location
Monitoring

Implement
Accounts

TaxSmart
Withdrawal

Trades

Cash

NextMMIPaper:
October,2015

9/28/2015

SignificantGBWMInvestment Why?

Improvedinvestor,advisor&firmoutcomes
Keycontributors:
Cost
Tax
RiskAdjustedReturns
"Taxesarethebiggestinvestorexpense.
Hearts&Wallets

GBWMKeyElements
PrioritizeGoals
HouseholdAsset
Allocation

Intelligent
Withdrawals

AssetLocation
BigPie>LittlePies

Plan

Implement

Distribute

Manage
Coordinate/Select:
Product,Models
Monitor/Rebalance

9/28/2015

GBWMistheNextBigThing
MMIGBWMStudy:Whatfirmsaresaying
Requirestransformationalchange
Firmsneedhelpconnectingthedots
Tech/Ops/Toolscoordination
Practicemanagement
Regulatory/Complianceissues
DemonstratingROI

WhoisLeadingtheWay?

Solutionsproviders

Broker/Dealers
Wires
MMI

10

9/28/2015

LifeYield:WhatweveLearned

GBWMrequireschange
Advisorsdontlikechange

11

LifeYield:WhatweveLearned

GBWMrequirements:
Incorporatedintoadvisorworkflow
Guardrailsensureadoption&success
Valuemustbequantified
Keytodifferentiation Drivesconsolidation
Integratedimplementation
K.I.S.S./Wholeisgreaterthantheparts

12

9/28/2015

9/28/2015

GoalsBasedWealthManagement
ImprovingOutcomesfor
Investors,Advisors&Firms
JackSharry
Principal,LifeYield LLC

Chair,MMIGoalsbased
WealthManagementCommittee

September29,2015

BenchmarkingAgainstGoalsandPerformance

MarkD.Sloss,ExecutiveDirector,SeniorPortfolioManager
HeadofPortfolios&ModelsforInvestmentManagement
UBSInvestmentManagement

WalterHartford,CFA,SeniorVicePresident,Marketing
RyanLabsAssetManagement

Investment Management

Mark D. Sloss
Executive Director, Senior Portfolio Manager
Head of Portfolios & Models for Investment Management
UBS Financial Services Inc.
Mark is Head of Portfolios & Models for UBS Investment Management (IM), a voting member of
IM's investment committees and the Investment Management Research Committee, serves on
the firm's 401(k) investment committee, and consults extensively on portfolio and model
creation for ultra high net worth, family office and institutional clients. As part of his role, he also
drives content and implementation of sustainable and impact investment management
strategies across UBS Wealth Management Americas (WMA). Prior to his present role, Mark
lead Investment Management Research, and before that was responsible for product
development in the private client and institutional advisory businesses at UBS, having initially
joined the firm to head institutional manager research.
Throughout his career he has organized, participated in and spoken at industry events
pertaining to sustainable and impact investing, institutional benchmarking of investment
portfolios, manager research, active and passive portfolio management, private client and
institutional investment in "liquid" alternatives, market research, and retirement account
investing. Among his many activities relating to sustainability, Mark participates in the United
Nations Environmental Programme Finance Initiative North American Task Force on behalf of
WMA, is a member of the UBS Global Sustainability Council, and has been published in the
Journal of Sustainable Finance & Banking and a special report of the Money Management
Institute.
Before joining UBS in 2005, Mark was Director of the Investment Consulting Group and
Secretary to the Investment Committee of New York Life Investment Management (NYLIM).
During his eleven years at NYLIM he was also responsible for enterprise strategic planning and
led due diligence and manager selection for the defined contribution, mutual fund and variable
annuity divisions.
Mark Sloss is a graduate of Northwestern University and holds FINRA Series 7, 63, 66 and 24
designations

RepPMandUMAs:Qualifications,Performance,andExpectations

RichardSlater,ExecutiveDirector,HeadofFAandClientDiscretionaryAdvisoryPrograms
MorganStanleyWealthManagement

CemEr,CFA,Director,ProductManagement
CharlesRiverDevelopment

RobertFedele,Director,ProductManagement
Fiserv

Richard V. Slater
Morgan Stanley
Executive Director
Director: Portfolio Management Group and Consulting Group Advisor Programs
Rich is the Director of the Portfolio Management Group and Consulting Group Advisor
programs. He is responsible for the daily management of Morgan Stanleys FA directed
advisory programs. Richs previous roles include managing national business
development for the FA Discretionary programs and creating Consulting Groups
Advisory Development Initiative. Rich began his career as a financial advisor in New
Jersey and later joined Smith Barney in 1998. Rich holds a BA Economics from
Muhlenberg College (Allentown, PA) and has been certified in Conflict Management and
Mediation from Kent State University.

CemEr,Director,CharlesRiverDevelopment
CemleadsCharlesRiversprivatewealthproductmanagementteamandprovidesdirectionandthought
leadershipforwealthmanagementrelatedfunctionality,including,modelingandoptimization.Priorto
joiningCharlesRiver,CemwasaHeadTraderandPortfolioManageratCobblestoneCapitalAdvisors.He
beganhisfinancialservicescareerasaFinancialAnalystforDemirbankA.S.HSBCSecurities.Cemholds
anMBAinFinanceandStatisticsfromRochesterInstituteofTechnologyandisaCFACharterholder.
.

BobFedele
Director,ProductManagement
InvestmentServices
Fiserv

BobFedeleistheDirector,ProductManagement,andInvestmentServices,atFiserv,Inc.
(NASDAQ:FISV).Bobleadstheteamthatsupportsourwealthmanagementsolutions
includingPortfolioManagement,Trading,ModelPortfolios,FinancialAdviceManagement
andGlobalPortfolioAccounting.

PriortohispromotiontoDirectorin2015,asProductStrategistforAdvisorSolutions,was
instrumentalinthecreationandrolloutoftheUnifiedWealthPlatformfordiscretionary
financialadvisors.Bobalsoservedinvariousaccountandrelationshipmanagementroles
beforejoiningProductManagement.

BobstudiedInternationalBusinessatFordhamUniversityandheldoperationsandtrading
positionsatJPMorgan,ExcoNoonanandCSFBpriortojoiningCheckFree,nowpartof
Fiservin2001.HeisafrequentpresenteratFiservconferencesandFinancialAdvisor
seminarsforFiservclients.

TrackA:
Marketing&GrowthStrategies

Chairperson
KevinD.Mahn,President&ChiefInvestmentOfficer
Hennion&WalshAssetManagement

Kevin D. Mahn joined Parsippany, NJ based Hennion & Walsh as a Managing


Director in 2004. Currently serving as the President and Chief Investment Officer
(CIO) of Hennion & Walsh Asset Management, Mr. Mahn is responsible for all of
the Wealth and Asset Management products and services offered at the Firm
including fee-based money management and the various portfolio strategies
within the SmartTrust series of Unit Investment Trusts (UITs). Mr. Mahn was
also the former portfolio manager of the SmartGrowth Mutual Funds.
Mr. Mahn is the author of the quarterly ETF and CEF Insights newsletter as well
as one of the co-authors of the book, Exchange Traded Funds: Conceptual and
Practical Investment Approaches, 2009 Riskbooks. Mr. Mahn is a member of
the Forbes Investor team and a frequent contributor to the Forbes Intelligent
Investing and Advisor Intelligence blogs as well as the Seeking Alpha website.
Prior to Hennion & Walsh, Mr. Mahn was a Senior Vice President at Lehman
Brothers where he held several senior management positions, including CAO of
the High Net Worth Product and Services group within Lehmans Wealth and
Asset Management division as well as COO of Lehman Brothers Bank, during his
eleven year tenure with the Firm.
Mr. Mahn received his Bachelor's degree in Business Administration from
Muhlenberg College and his M.B.A. in Finance from Fairleigh Dickinson University.
Mr. Mahn has also served as an adjunct professor at Fairleigh Dickinson University
within the Department of Economics, Finance and International Business.
Mr. Mahn was the recipient of the 2009 Institutional Investor Rising Stars of
Mutual Funds Award. Mr. Mahn is also the Co-Chair of the NICSA UIT Industry
Committee and received an MVP award from NICSA for his leadership of the UIT
committee.
Interviews with, as well as byline articles and insights from, Mr. Mahn have
appeared in/on CBS News, Fox News, CNBC, Fox Business News, Wall Street
Journal, Investors Business Daily, Bloomberg.com, Fortune, Forbes, Business
Week, New York Times, Wall Street Week, CNNMoney.com, Investment Advisor
Magazine, SmartMoney, The Star-Ledger, The Daily Record, Reuters, Fund Action,
The Street.com, CNBC.com, Fox Business.com, Dow Jones Newswires,
MarketWatch, Ignites, Money Management Executive, Daily Finance, Wall Street
Transcript, Registered Rep., Financial Planning, , Risk Magazine, ETF Radar
Magazine, Structured Products Daily, Financial Times and Investment News.
Hennion & Walsh
2001 Route 46, Waterview Plaza
Parsippany, NJ 07054
P: (973) 299-8989 / F: (973) 299-0692
kmahn@hennionandwalsh.com
Visit our blog @ http://www.hennionandwalsh.com/blogs/index.html
Securities Offered through Hennion & Walsh, Inc. Member: FINRA SIPC

RoboAdvisersPartI:ThreateningorFullofOpportunity?
TomSelby,Partner
Marlin&Associates
AloisPirker,ResearchDirector
AiteGroup
RichDion,ExecutiveVicePresident,StrategicPartnerships
Envestnet

Tom Selby is a Partner at Marlin & Associates, an investment bank focused on advising
information technology companies, with a primary focus on advising financial
technology companies. He spent the first 14 years of his career in the information
technology arena in a variety of technical / operating roles and as an entrepreneur,
sales and marketing roles, and worked with SunGard for close to a decade, primarily in
transaction advisory roles focused on helping his division acquire firms in verticals
including brokerage, trading, wealth, and insurance.

Tom is a native Canadian, and an engineer by training, having graduated from


University of Toronto with a Bachelors of Applied Science in Engineering. He is based in
Toronto, where he lives with his wife and 3 young children.

Richard K. Dion
Executive Vice President
Richard Dion is Executive Vice President and Head of Strategic Partnerships at Envestnet Asset Management. Prior
to joining Envestnet, Mr. Dion was President of Placemark Investments, Inc. where he was responsible for the firms
core business activities, including business development, product management, platform services and technology
services. Mr. Dion has over 30 years experience in financial services, much of it garnered at Fidelity Investments
where he worked in a variety of senior sales and product development roles. Prior to joining Placemark, Mr. Dion was
Chief Executive Officer of Oberon Financial Technology, a fee-based technology services firm subsequently acquired
by Envestnet in 2005. Mr. Dion holds a B.A. from the University of New Hampshire.

Robo Advisors Sept 28

Proprietary & Confidential

Marlin & Associates Knows Financial Technology


Experienced Marlin Team
Partners with operating experience in
senior roles at financial technology
companies

Strategic Players

Expansive Domain Coverage


Wealth Management Technology

Capital Markets Technology


Deep relevant expertise as an advisor

completed
transactions
with
Betterment, FIS, Markit, Morningstar,
SS&C, Sungard, Thomson Reuters

Core Banking Technology

Risk & Analytics Software


Locations: New York (Headquarters),
San Francisco, Washington DC, and
Toronto

Deep Domain Expertise


Database of over 23,000 contacts from
more than 13,000 different companies

Transactions
completed
parties in 26 countries

involving

Advised
on
more
than
200
successfully completed transactions

Technology Enabled Services

Strong PE / VC Relationships

Broad Industry Recognition


Boutique Investment
Banking Firm
of the Year

Financial Technology
Deal of the Year

Best Software Focused


Financial & Strategic
Advisory

- The M&A Advisor

- Global M&A Network

- Wealth & Finance


International

Middle Market Financial


Services Turnaround
Deal of the Year

Two transactions named

Middle Market
Information
Technology Deal of the
Year

- The M&A Advisor

- The M&A Advisor

Middle Market
International / Cross
Border Deal of the Year

Middle Market
International Financial
Services Deal of the
Year

- The M&A Advisor

Deals of the Decade

- The M&A Advisor

Proprietary & Confidential

- The M&A Advisor

Financial Services Deal


of the Year
- ACG Champions
Award

Changes In The Wealth Management Industry Are Accelerating


In Parallel With New Technologies

1.0: Early 20th Century 1995

2.0: 1996 2010

3.0: 2010 Present

Traditional Brokerage Model

Online Brokerage / Wealth

Wealth Management 3.0

Heavily reliant on human capital for


account management

Online primary method of account


management

Mobile apps are common for account


management

High cost of investing; commission


charges were hundreds of dollars
per annum

Commission charges were typically a flat


fee per trade

Low management/commission fees

Wealth managed by specialists

Difficult to maintain as investors required


to manage their own wealth

Sophisticated techniques such as taxloss harvesting 260+ portfolio


management apps for mobile/tablet

Reliance on personal relationship with


wealth manager for information

Limited access to research and other


professional services

Automated solution means all research,


due diligence and balancing completed
by the broker

25% US households own mutual funds

46% US households own mutual funds

1,243 funds with $371Bn total net assets

7,707 funds with $15Tn total net assets

340k US cellphone subscribers - 1985

300mm US cellphone subscribers - 2010

Source: JP Nicols

Proprietary & Confidential

Notable Funding Activity In The Wealth Advisor Space


Date

Transaction

Announced Target

Acquirer / Investor

04/15/15

e.ventures; Garland Capital Group; Great


Online platform that enables individual investors to invest
Oaks Venture Capital; Greycroft
Partners; Math Venture Partners; Sound loose change in several preconfigured portfolios.
Ventures

23

02/17/15

Bessemer Venture Partners; Francisco


Operates an online platform for investment advisory,
Partners; Menlo Ventures; Northw estern
retirement planning, and brokerage services.
Mutual Capital

60

Ow ns and operates an online portal enabling investors to


invest based on ideas or themes.

40

Online platform empow ering individuals to manage their


financial planning to meet investment and retirement goals.

50

Automated investment service enabling users to invest in


continually rebalanced portfolios of index funds at low
cost.

64

01/20/15

10/28/14

10/27/14

BBVA Ventures; Corsair Capital;


CrossLink Capital; Institutional Venture
Partners; United Services Automobile
Association; Venrock
DAG Ventures; Dragoneer Investment
Group; Greylock Partners; Index
Ventures; Ribbit Capital; Spark Capital
Partners; The Social+Capital Partnership

Target Business Description

Value ($m m )

04/14/14

Accel Partners; American Express


Ventures; Northw estern Mutual Capital

Seeks to make financial planning more accessible by


offering users online investment tools and customized
financial plans, as w ell as access to a financial planner.

28

04/01/14

Anthemis Group; Bessemer Venture


Partners; Citi Ventures; Globespan
Capital Partners; Menlo Ventures;
Northw estern Mutual Capital

Operates an online platform for investment advisory,


retirement planning, and brokerage services.

32

04/01/14

DAG Ventures; Greylock Partners; Index Automated investment service enabling users to invest in
Ventures; Ribbit Capital; The
continually rebalanced portfolios of index funds at low
Social+Capital Partnership
cost.

35

Proprietary & Confidential

Funding Activity in Market Very Strong, But Pace Slowing Down

25

280

300

20

18

250
200

14

15
10
6
3

4
14

2015 On Track for


Flat or Slightly
Down from 2014

159
11

94

150
100

4
50

26
43

Millions Invested

Source: Tracxn Robo-Advisors Report,


Aug 2015

# Companies

Proprietary & Confidential

The Pace of Acquisitions In The Robo-Advisor Space Expected to Pick up Speed


Date

Transaction

Announced Target

Acquirer / Investor

Target Business Description

Value ($m m )

09/04/15

Enables w ealth advisors to provide services through an


intuitive online platform.

08/26/15

Offers personalized and data-driven recommendations to


optimize clients' investment portfolios.

05/26/15

Scans and analyzes financial transactions to help users


make investing decisions.

na

04/23/15

Operates an online investment marketplace providing trade


sharing solutions and services for individual investors.

na

03/25/15

Seeks to make financial planning more accessible by


offering users online investment tools and customized
financial plans, as w ell as access to a financial planner.

250

02/26/15

Helps w ealth advisors manage accounts efficiently and


cost-effectively.

02/11/15

Provides w eb-based w ealth management tools, serving


both advisors and their clients.

250

Source: S&P Capital IQ, Marlin &


Associates Research

Proprietary & Confidential

na

175

A Generational Wealth Transfer In the Order Of $30Tn Is Underway


Financial Assets by Source of Money and Retirement Status (in Billions)
Households With Assets <$3.5mm

HHs With
$3.5+mm

Total

Fully/Partially Retired

Mega-Millionaires

$87

$2,047

$1,588

$3,722

Silent Generation
Age 70 to 79

$803

$2,424

$2,165

$5,392

$3,572

$1,433

$3,765

$8,770

$312

$1,495

$5,351

$13

$444

$3,112

Total = $6,229

Total = $9,457

Leading-Edge Boomers
Age 60 to 69

Trailing-Edge Boomers
Age 51 to 59
*Large amount of wealth transferred

$3,544

$30 Trillion Over 20 Years

Not Retired
Silent Generation
Age 80 or older

over the next several decades

Gen X and Y
Age 50 or below

$2,655

Total = $10,661

Total=$26Tn

Firms that focus on deliberate strategies and effectively implement their plans will be in the position to capture a large base of assets. Firms
that fail to act run the risk of losing assets at an accelerating rate - Accenture

As the flow of wealth is shifting from asset gathering to asset distribution, the need for comprehensive solutions will
increase, making NeoXams offerings even more relevant to the industry
Sources: LIMRA analysis of Survey of Consumer
Finance data, Federal Reserve Board, 2010,
Accenture

Proprietary & Confidential

Hybrid Models Will Evolve, To The Benefit Of The Investor

$ Per
Portfolio

Full Service
Wealth

$1.0 M

(XX Trillions)

Hybrid Models

$0.2 M

Robo
(<20Bn)

# of
portfolios

Proprietary & Confidential

Robo Advisors Are A Wake Up Call To Traditional Wealth Management

Robo Funding Slowing


Down fueling likely
Consolidation

Wealth Managers
Increasingly
Launching Their Own
Platforms

Robo cost of client acquisition is high relative to near term revenue potential. Only a few Robos will
reach sufficient scale to survive
Buyers will likely be full service providers, looking to adopt a hybrid model. Robos typically wont be
buyers as they wont wish to meld different philosophies
Wealth management firms have accelerated the adoption of SaaS-based solutions to help advisors
leverage web-based tools in a more cost-effective and time-efficient manner.
Timely and easy access to information is essential to build customer trust and loyalty. Insufficient
client reporting capabilities is cited as a key driver to client attrition
Full service platforms will build or acquire missing technology pieces to provide complete solution
The Robos are primarily answering the call of the smaller AUM time starved early investors

It is Not Only About


Fees

Generational transfer of wealth in the order of $30T will occur over 20 years, allowing plenty of time
to adapt and thrive. Fees alone will not drive assets to Robo platforms.
Full Service firms will find methods to answer Millenials tech hungry needs, some will do so by
partnering with Robos who increasingly are open to providing B2B2C type offerings
Transfer of wealth drives significant issues around planning, tax implications, and other advice
Robos not able to handle

Hybrid Models Will


Evolve

Hybrid models will evolve with advice and automation balanced to the satisfaction of the investor
Technology will facilitate hands on advisors handling more clients with smaller portfolios, while still
maintaining profitability

Proprietary & Confidential

About Marlin & Associates

Founded in 2002, Marlin & Associates Holding LLC is a boutique investment banking and
strategic advisory firm specializing in acquisitions and divestitures of U.S. and international
middle-market firms that provide technology, digital information and healthcare-related
products, technology and services.
M&A's professionals have advised on over 200 successfully completed transactions in the
financial technology and information services sector. The firm has been named "Middle
Market Investment Banking Firm of the Year," received numerous "Deal of the Year
awards, and was recognized for leading two Deals of the Decade.

New York | Washington, DC | San Francisco | Toronto

Proprietary & Confidential

10

10/7/2015

Panel:RoboadvisorsPartI
ThreateningorFullofOpportunity?
PresentedatFRAs13thAnnualManagedAccounts&UMASummit

September28th,2015
AloisPirker
ResearchDirector

Page 1

Page1

2014AiteGroupLLC.

WealthManagementMarketUpdate
Marketstructurechanges
duetoM&A
Elevatedmobilityofclients
andadvisors
Profitabilitypressuredueto
lowinterestratesand
transactionvolumes
Businessmodelchanges
Bankingproducts
Fullservicefirms
embracethedirect
model
Regulationsdrivefinancial
servicesfirmsfrom
productfocusedto
consumercentric

Client Assets and Number of Financial Advisors Across U.S. Wealth Management
Industry Segments, 2014
Client assets
(In US$ billions)
'12 to '13
'13 to '14
$6,553

Wirehouse
Self-clearing
retail brokerage
(non-wirehouses)

5.7%

$3,267

15.4%

9.5%

7.6%

11.6%

23.0%

15.0%

18.2%

11.9%

56,985
$2,817

Fully disclosed
retail brokerage

139,100
$2,687

Independent RIAs

Discount and online


brokerage

12.7%

54,295

59,422
$3,759
14,495
Client assets (total=US$19.1 trillion)
Number of financial advisors (total=324,297)

Source:NewRealitiesinWealthManagement:TrainKeptaRollin,
AiteGroup,July2015
Page2

2014AiteGroupLLC.

10/7/2015

RespondingtoaNeedfor
LowcostFiduciaryService
Traditionalfirmshavefocused
onHNWandadvisorled
serviceandlessonscaling
adviceanddigitalservice

Wealthsegment

Highnet
worth

Startupsseeopportunityto
addressunderservedsegments
withlowcostprofessionalservice
deliveredatscalethroughintuitive
andautomateddigitalprocesses

Online
brokerage
doit
yourself

Mass
affluent

FA/
Brokerage
(customized,
Morethan
100bpsfee)

Private
bank/
trust

FocusonHNW
LittlefocusonGenX/Y
Expandingservices
Movingtofiduciary
Maintaininghigh,
bundledfee

Mass
affluent

Digitaladvisors
(semipersonalized,
Mass
freeto100bps)

Technology-driven service

retail

Page3

Advisor-led Service
2014AiteGroupLLC.

Impact on the WM Industry

Massaffluentfocusedfirmswillfeelthecompetitivepressurefromdigital
advicemodelsmostandwilladoptthemodelatdifferentspeeds
Thesefirmswillbeunabletojustifyhigherinvestmentfeesforadvisorswhoprovide
investmentadviceprimarilyanddeliverstandardportfolios

Onlinebrokerswillmasterthedigitaladvicemodelfirstasitisanaturalfit
Insurancebrokerdealerhavestartedacquiringdigitaladvicestartups
Retailbankswillshiftfromanadvisorbasedtoadigitalmodeleventually

HNWfocusedfirmsarelessthreatenedbydigitaladvicemodelsbutwillhave
toconsideranumberofaspects
ValuepropositionintheHNWisdifferentasthefeescoverindependentandholistic
advicethatisseparatefromproductfulfillment

But,minimuminvestmentamountsandfeelevelsnowhavenewfloors
Independentadvisorsmaytakeadvantageofthesenewlowcostplatforms(institutional
offers)foraportionoftheirclientswhichwillputfeepressureonwireheouse FAs

Firmsmusthelpfinancialadvisorsarticulatetheirvaluebeyondproductorportfolio
propositions

Page4

2014AiteGroupLLC.

10/7/2015

WealthManagementvs.DigitalAdvice
Business model
features

Traditional Wealth Management

Digital Advice / Robo Advisor

1.
2.
3.
4.

1.
2.
3.
4.

5.
6.
Product

Advisor-delivered service
Advisor owns client relationship
Advisor sets service schedule
Digital channels provide limited
value
Complex presentation of products
and fees
High fees, high costs

Commission-based transitioning to
sophisticated fee-based model
High-end: SMA / UMA / Rep as PM
Low-end: Mutual Fund Wrap

5.
6.

Multi-channel service
Firm owns client relationship
Advisors when needed
Digital channels deliver products,
services, and value-add content
Simple presentation of products
and fees
Low fees and low-cost execution

ETF Wrap is the norm with some


players offering:
- daily tax-loss harvesting
- proprietary products
- thematic investing
- replicating trades of hedge funds.

Fees

> 100 bps (even MF Wrap)

0 to 100 bps

Technology

Built for advisors and to cover


maximum regulatory complexity

Built for client first and allows for


advisor/client collaboration

Client
Engagement

Client engagement is largely left to


financial advisor

Client-value driven with great focus


on self-service advice tools and
value-add content

Managed
account/
RIAmodel

Products

Digitalinvestmentmanagersandbrokers

Page5

RebalanceIRA

FutureAdvisor
SigFig

Betterment
Covestor
Hedgeable
HedgeCoVest
SchwabIntelligent
Portfolios(2015)
Wealthfront

Blooom(D2C plans)

AdvisorConnexion(Foliofn)
BalanceFinancial
Blueleaf
eMoneyAdvisor
GuideFinancial
Invessence
NestEgg(Vanare)
Oranj
ScivantageSqope
Trizic
UpsideAdvisor(ENVESTNET)
WealthAccess
EdelmanOnline
eSavant
FirstPointFinancial
MainSt.Advisor
PersonalCapital
VanguardPAS
Wela
XY PlanningNetwork
Bicycle Financial
NextCapital(forthcoming)

Brokerage
account

Digitaladviceproviders

AssetBuilder
Liftoff(Ritholtz)
StrongholdFinancial
TradeKingAdvisors
TrustEgg
WiseBanyan

2014AiteGroupLLC.

Kapitall
RobinhoodMarkets
MotifInvesting

Recommenda
tions

FinancialGuard
Jemstep

Noproducts
offered/
recommended

FlexScore
iQuantify
CircleBlack
(forthcoming)

Assets in
specific account

Assets for
retirement

LearnVest

Allinvestmentassets
(asaggregatedbyclient)

Allassetsandliabilities

Scopeofadvice/service

Source:AiteGroup
D2Cservice

D2Cand
institutionaloffer
Page6

Technologyproviderto
advisors/institutions

Advisorispartof
theoffer
2014AiteGroupLLC.

10/7/2015

Transitioning to Digital Wealth


Management
Wealthsegment

Traditionalfirmshaveto
shifttowardsdigitalclient
engagementwhile
integratingtheadvisorinto
theprocess

Highnet
worth

Mobileand
webwealth
mgttools

Digitalinitiativesofwealth
managementfirmsfocuson:
Advisor/clientcollaboration
(facetofaceanddigital)
Supportingricher/more
holisticdialogthrough
advisortoolsandcontent
(e.g.MerrillClear)
Processautomation(e.g.
onboarding,datagathering)

Integration

Private
bank/
trust
FA/
Brokerage

Mass
affluent

Online
brokerage
doit
yourself

Mass
affluent

FocusonHNW
Littlefocuson
GenX/Y
Expandingservices
Movingtofiduciary
Maintaininghigh,
bundledfee

IncumbentversionsofDigital
Advisor(differentmodels)
Mass
retail

Advisor-led Service

Technology-driven service
Page7

2014AiteGroupLLC.

FinTech Providers Emerge to Support


Advisors Digital Offices

Capabilities

Firmexamples

Purpose

DigitalEngagementSolutions
Prospectfocused
Advisorswhowantto
acquireclientsdigitally

Clientservicefocused
Advisorswhowantto
service clientsdigitally

Advisor Websites
AdvisorProducts
EmeraldConnect
FMGSuite
Jemstep
Riskalyze

Advisorwebsitesandleadgenerationtools
Onlineaccountopening(somefirms)
Clientportalw/aggregation
Advisor alerts/suggestedadvice
Advice/planningtools(some)
Portfolioanalytics/reporting
Vault
Document sharing
LighttofullCRM/bookanalysis

Blueleaf
CircleBlack
eMoneyAdvisor
Guide Financial
Marstone
Oranj
WealthAccess

DigitalAdvisorSolutions
PMplatform
Advisorswhowantamore
automatedportfolio
managementplatformwith
onlineonboardingandan
integratedprospecting
website

FolioInstitutional
MotifAdvisor(theme
based portfolios)
NestEgg Wealth
Trizic

PMservice(TAMPlike)
Advisorslookingforan
investmentmanagement
service(TAMPlikeservice)
forlowbalanceclientsor
clientschildren

BettermentInstitutional
SchwabIntelligent
Portfolios
UpsideAdvisor
(ENVESTNET)
Marstone

Basicwebsite
Questionnaires
Onlineaccountopening
Portfoliomanagement(capabilitiesvary)
Portfolioreporting
Aggregation/planning(some)
LighttofullCRM
Page8

2014AiteGroupLLC.

10/7/2015

WhatdoesthismeanfortraditionalWMFirms?
Whiledigitaladvicestrategyforthemassaffluentisachoice,
richdigitalclientengagementfortheHNWisbecomingamust!
Providingavalueadddigitalexperienceenrichedthrough
insightful/personalizedcontentandselfservicetools
Differentiatingdigitalservicebasedonclientsegmentand
behaviorisrecommendedtodeliverpersonalizedandrelevant
digitalservice

Behavioralsegmentationoftheclientbaseisrecommended
Adjustclientengagementlayerinresponsetoclientbehavior

Robustclientdatalayerisrequiredforagileclientengagement
(Thebetterthedatalayerthemorerobusttheengagement!)
Financialadvisorsneedtobeabletoarticulatetheirvalue
propositionoutsideofaproductcontext
Embracinggoalsbasedwealthmanagementisaperfectfull
serviceandclientcentricresponse
Page9

2014AiteGroupLLC.

Aite Group:Partner,Advisor,Catalyst
Aite(pronouncedeyetay)Groupisanindependentresearchand
advisoryfirmfocusedonbusiness,technology,andregulatoryissues
andtheirimpactonthefinancialservicesindustry.
AloisPirker
ResearchDirector
apirker@aitegroup.com
+1.617.338.6071

www.aitegroup.com

Page10

2014AiteGroupLLC.

9/16/2015

AdvisorNow
RichardK.Dion|ExecutiveVicePresident|StrategicPartnerships

2015Envestnet,Inc.Allrightsreserved.ForNationalFinancialuseonly.

EnvestnetataGlance

Foundedin1999
IPOJuly2010(NYSE:ENV)
Empowersover42,000advisorstoachievehigherstandardsinportfolioandpracticemanagement
Morethan3.0millioninvestoraccounts1
Supportsover$792billionofassets1

$258billioninAUM/A
Fullfiduciarysupportfor$76billioninAUM

$13.8billioninYTD6/30/15netflows($50billioninnetflowsinfullyear2014)
Morethan1,000pointsofplatformcustomization
Over1,400employeesinChicago(headquarters),NewYork,Boston,Dallas,Denver,Raleigh,Landis(NC),
Seattle,St.Louis,Sunnyvale(CA),Tucson,andTrivandrum,India

Providingendtoendsolutionsthatunifyandfortifythewealthmanagementprocess
Note:DataasofJune30,2015.
1 includesaccounts/assetsundermanagement,administration,andlicensingarrangements.

2015Envestnet,Inc.Allrightsreserved.Forhomeofficeandadvisoruseonly.

9/16/2015

TheNextgenerationBusinessModel
BlendingTraditionalwithDigital
ClientEngagement

InvestmentPortfolios
ScopeofAdvisory
Services
GoalsbasedPlanning

Business Model
Integration

Traditional

Digital
(advisorless)

(advisorcentric)

Packaged

Customized

(mutual funds&ETFs)

(individual securities)

Impersonal

HighlyPersonal
Household/Multi
custodiallevel

Accountlevel

Horizontal

Vertical

(acrossmultiplehostaccounting
systems)

(singlehostaccountingsystem)

CurrentDigitalOfferings
2015Envestnet,Inc.Allrightsreserved.Forhomeofficeandadvisoruseonly.

AdvisorNow
Wearebringingtheinnovativecapabilitiesofourrecentacquisitionstogetherwith
ourexistingcorecapabilitiestodeliverthenextgenerationofinvestorexperience.

CoreEnvestnetCapabilities

ADVISORNOW

Proposal
Gention

Client Onboarding

Research

Investmt
Product
Access

Portfolio
Rebalance

Trading

Tax
Mgmt.

Portfolio
Accountg

Investmt
Access

Rebalance

Service
request
software

Billing

Account
Billing
Aggregn

Reporting

Document
Vault

Account
Aggregn

Financial
Planning

Account
Opening

Client
onboarding

Client
Service

Reporting

2015Envestnet,Inc.Allrightsreserved.Forhomeofficeandadvisoruseonly.

9/16/2015

Disclosure
The information contained in this document is for general guidance only. While we have made every attempt to ensure
that the information contained herein has been obtained from reliable sources, Envestnet is not responsible for any
errors or omissions, or for the results obtained from the use of this information. All information is provided as is, with
no guarantee of completeness, accuracy or timeliness, and without warranty of any kind, express or implied, including,
but not limited to warranties of performance and risk management. Envestnet reserves the right to add to, change, or
eliminate any of the services listed herein.

FORHOMEOFFICEANDADVISORUSEONLY
2015Envestnet,Inc.Allrightsreserved.

2015Envestnet,Inc.Allrightsreserved.Forhomeofficeandadvisoruseonly.

RoboAdvisersPartII:DigitizingEffortsinOrdertoReach&EffectivelyOperatewiththeNextGeneration

GavinSpitzner,President
WealthConsultingPartners,LLC

MatthewR.Kane,Cofounder&ChiefNinja
Hedgeable

Gavin Spitzner
President of Wealth Consulting Partners, LLC

Gavin Spitzner is President of Wealth Consulting Partners, a boutique consultancy that advises
Financial Institutions and their Providers on how to leverage technology and best practices in
Portfolio Management, Goals-Based and Digital Advice to improve the
client experience and drive topline revenue and bottomline business
results.
Gavin has more than 25 years of experience working in and
consulting to Fortune 500 companies with a breadth of experience
encompassing strategic consulting, business development, process
reengineering, product development, digital strategy, marketing and
professional development. He has partnered with numerous top 25
U.S. and Global banks and broker-dealers to develop and implement
innovative investment management platform solutions leveraging modern technology and
processes to improve business performance.
More information can be found on Gavins corporate website at wealthconsultingpartners.com.

Matthew Kane Bio


Matthew is the co-founder and chief ninja of Hedgeable, a venture backed private banking
startup he started with his twin brother Mike with less than $100 in his bank account out of his
apartment when he was 24. Matt uses all of his covert product, strategy, and design ninja skills to
silently take down an industry of sleeping giants ripe for disruption. Some of the industry firsts
in the digital wealth space Matthew has been responsible for include:
-

The first to offer tactical, risk managed accounts


The first to offer bitcoin investing as an asset class
The first to offer venture investing as an asset class
The first to offer impact and socially responsible portfolios
The first gamified wealth management platform
The first rewards based loyalty program

Matt also advises early stage startups through his firm Morefield Partners. Before starting
Hedgeable he was an associate at multi-billion dollar fund seeded by SAC capital called Sailfish
Capital Partners.
Born and raised in the Northeast section of Philadelphia, and educated entirely in the
Philadelphia public school system, Matthew now lives in New York City. He graduated with
distinction from Penn State University with a B.S. in Finance and was one of the first graduates
of the Engineering Entrepreneurship program.
About Hedgeable
Hedgeable is the first private bank built for millennials. It was founded in 2009 in response to the
unprecedented losses seen during the financial crisis when Americans who didnt have $10
million to invest with the most sophisticated managers suffered the most. Hedgeables mission is
to offer "Goldman Sachs for the rest of us", a high net worth style wealth management platform
made accessible to everyone online at a low cost. The company has been featured in publications
such as Time, Bloomberg BusinessWeek, The Wall Street Journal, and Barrons.

10/7/2015

782,000

10/7/2015

13th Annual UMA & Managed Accounts Summit

MatthewKane,CoFounderand
ChiefNinja

GavinSpitzner,President
Wealth Consulting Partners, LLC
Wealth Management Strategy,
Design and Deployment

September 28, 2015

Attack of the Robos

10/7/2015

Attack of the Robos

Vanguard Personal Advisor Services

Attack of the Robos

$
Vanguard Personal Advisor Services

$
$

10/7/2015

Attack of the Robos

Augmented Advice

10/7/2015

Attack of the Robot Unicorns

Responses from Traditional Advisors

Fear and Anxiety

10/7/2015

Responses from Traditional Advisors

Anger

Responses from Traditional Advisors

Ignore It

10/7/2015

Responses from Traditional Advisors

Happy?

How Robos Are Changing the Game


EvolvingBank WealthManagementMetrics

Theyre more objective and client-centric than you

14

10/7/2015

How Robos Are Changing the Game


Theyre cheaper than you

EvolvingBank WealthManagementMetrics

15

How Robos Are Changing the Game


EvolvingBank WealthManagementMetrics

Theyre easier to work with than you

16

10/7/2015

How Robos Are Changing the Game


EvolvingBank WealthManagementMetrics

Theyre cooler than you

Modern Advisor executive

17

Whats Appealing to the Next Generation?


EvolvingBank WealthManagementMetrics

Frictionless
Experience
Low-Cost

GoalBased
and
Holistic

Transparency

18

10/7/2015

Whats Appealing to the Next Generation?


EvolvingBank WealthManagementMetrics
Goals-Based
Advice

Tax-Optimization Personal
Financial
Management

Account
Aggregation

Financial
Planning

Automated
investment
management

Vault

Reporting

Online Account
Opening

Only Way Firm Can Deliver That Is


Both Scalable and Personalized is
Through Technology
19

Implications for Traditional Advice Providers

With portfolio
management and
trading becoming
commoditized at 25-50
basis points, the
spotlight is on advisors
to demonstrate the
incremental value of
human advice
20

10

10/7/2015

Digital Advice Case Study: Hedgeable

Q&A
EvolvingBank WealthManagementMetrics

22

11

BuildingMomentum,CapturingMarketShare,andEffectiveStrategiestoRetainit

KeithW.Walker,President
FirstCitizensInvestorServices

KEITH WALKER

President
First Citizens Investor Services, Inc.
Keith Walker joined First Citizens Investor Services (FCIS), a subsidiary of First Citizens Bank, in
2004 as a Regional Sales Manager. Currently serving as President of the Raleigh, N.C.-based firm, his
responsibilities include oversight of a growing regional bank broker dealer with 44 registered
advisors and almost $5 billion in assets under management. Since 2004, FCIS revenues have
doubled, growing from approximately $16 million to a projected $32 million for 2015. In 2007,
BISA presented FCIS with the coveted Award of Excellence for Regional Institution Program of the
Year.
During his time with the firm, Walker has played an integral role in the growth of the Fee Based
Managed Account Program at FCIS, which has grown assets under management from $75 million to
its current size of $560 million. More importantly, the revenue produced by the program has grown
from 9 percent of total firm revenue, to its current total of approximately 26 percent.
He is currently leading the firm through an important strategic merger with First Citizens Securities
of South Carolina, which will result in a combined firm with 62 Financial Advisors, $7.5 billion in
assets and $45 million in annual revenues.
Prior to joining First Citizens Investor Services, Walker held various positions, including advisor and
management roles with BB&T Investment Services and as a Financial Advisor with FCIS and
Edward Jones. Before starting his Financial Services Industry career in 1995, Walker was a college
basketball coach for eight years, drawing extensively on those same coaching principles to lead his
management team and sales force. He holds a bachelors degree in science from Mars Hill
University.
September 2015

First Citizens Wealth Management is a joint marketing mark of First-Citizens Bank & Trust Company, Member FDIC, Equal Housing
Lender; First Citizens Investor Services, Inc., Member FINRA/SIPC, an SEC-registered broker-dealer and investment advisor; and
First Citizens Asset Management, Inc., an SEC-registered investment advisor.

TrackB:
Technology&Operations

Chairperson
PaulG.Ahern,ManagingPrincipalWinslow
CapitalGroup,LLC

ProfessionalBiography

PaulG.AhernisthefoundingprincipalofWinslowCapitalGroup,LLC
(winslowcapitalgroup.com),aleadinginstitutionalconsultingfirmforthebankwealth
managementchannel.WinslowCapitalGroup,LLCprovidesnicheexpertiseforbanksandtheir
affiliatesseekingtoachieveefficiencyandsustainableprofitability.Mr.Ahernhas30yearsof
experienceasahandsonpractitionerinbothabanktrustenvironment,andwithinRegistered
InvestmentAdvisers,thelast12yearasaleadingconsultanttobankswealthdivisionsandtheir
affiliates.

WinslowCapitalGroup,LLChelpsinstitutionalclientsmaketherightdecisiononvendor
selection;integrationofaffiliatedbusinesslines;streamliningsystemsofrecord;custody;
internalandexternalreporting;implementation&adoption;howtouseTurnKeyAsset
ManagementPlatforms(TAMP);andPointSolutionModels.Weprovidenicheexpertiseand
guidanceontopicsincludinghelpincraftingastrategicvisionandtacticalimplementationplan
fororganizationsneedingtomaketimelyandcosteffectivetransitions.

Mr.Ahernsassignmentsareonboththebuysideandthesellsideincludingbanktrust
companies;sovereignfunds;RegisteredInvestmentAdvisers;proprietarybankaffiliated
investmentmanagementprograms;separatelymanagedaccountplatforms(SMA);Overlay
technologyfirms;UnifiedManagedAccountofferings(UMA)andUnifiedManagedHousehold
(UMH)architectures.

Mr.AhernearnedabaccalaureatedegreefromtheUniversityofMassachusettsandanMBA
withaconcentrationinfinancefromUniversityofMaine.PriortofoundingWinslowCapital
Group,LLC,Mr.AhernwasExecutiveVicePresidentandthenCEOofBTIFinancialGroupfrom
itsfoundingasanoperatingsubsidiaryofBarHarborBanksharesuntil2002.Mr.Ahernserved
asPresidentofBTIssubsidiary,registeredinvestmentadviserandwasVicePresidentofthe
BoardofDirectorsofBarHarborBankshares,apubliccompany.PriortoMr.Ahernswork
establishingBTIFinancialGroup,heservedasChiefInvestmentOfficerofBarHarborBanking
andTrustCompanyuntilhispromotionwithinthegreaterBanksharesorganizationtoCEOof
BTIFinancialGroup.PrevioustohisemploymentatBarHarborBankingandTrust(operating
subsidiaryofBarHarborBankshares)hewasPortfolioManageratWinslowAssetManagement
(nocorporaterelationtoWinslowCapitalGroup,LLC)aswellasPortfolioManageratWinslow
AssetManagementssuccessororganization,F.L.Putnam/WinslowInvestmentManagement

WinslowCapitalGroup,LLC2012AllRightsReservedwww.winslowcapitalgroup.com

Telephone:207.632.0215

EMail:pahern@winslowcapitalgroup.com

Company(nocorporaterelationtoWinslowCapitalGroup,LLC).Mr.Ahernbeganhis
investmentcareerasaFinancialConsultantwithMerrillLynch.

Page

WinslowCapitalGroup,LLC2012AllRightsReservedwww.winslowcapitalgroup.com

Telephone:207.632.0215

EMail:pahern@winslowcapitalgroup.com

WhatDoesitTaketoAchieveScalability&Suitability?

PaulG.Ahern,ManagingPrincipal
WinslowCapitalGroup,LLC

TomKane,ManagingPrincipal
KaneCarlton,LLC

ProfessionalBiography

PaulG.AhernisthefoundingprincipalofWinslowCapitalGroup,LLC
(winslowcapitalgroup.com),aleadinginstitutionalconsultingfirmforthebankwealth
managementchannel.WinslowCapitalGroup,LLCprovidesnicheexpertiseforbanksandtheir
affiliatesseekingtoachieveefficiencyandsustainableprofitability.Mr.Ahernhas30yearsof
experienceasahandsonpractitionerinbothabanktrustenvironment,andwithinRegistered
InvestmentAdvisers,thelast12yearasaleadingconsultanttobankswealthdivisionsandtheir
affiliates.

WinslowCapitalGroup,LLChelpsinstitutionalclientsmaketherightdecisiononvendor
selection;integrationofaffiliatedbusinesslines;streamliningsystemsofrecord;custody;
internalandexternalreporting;implementation&adoption;howtouseTurnKeyAsset
ManagementPlatforms(TAMP);andPointSolutionModels.Weprovidenicheexpertiseand
guidanceontopicsincludinghelpincraftingastrategicvisionandtacticalimplementationplan
fororganizationsneedingtomaketimelyandcosteffectivetransitions.

Mr.Ahernsassignmentsareonboththebuysideandthesellsideincludingbanktrust
companies;sovereignfunds;RegisteredInvestmentAdvisers;proprietarybankaffiliated
investmentmanagementprograms;separatelymanagedaccountplatforms(SMA);Overlay
technologyfirms;UnifiedManagedAccountofferings(UMA)andUnifiedManagedHousehold
(UMH)architectures.

Mr.AhernearnedabaccalaureatedegreefromtheUniversityofMassachusettsandanMBA
withaconcentrationinfinancefromUniversityofMaine.PriortofoundingWinslowCapital
Group,LLC,Mr.AhernwasExecutiveVicePresidentandthenCEOofBTIFinancialGroupfrom
itsfoundingasanoperatingsubsidiaryofBarHarborBanksharesuntil2002.Mr.Ahernserved
asPresidentofBTIssubsidiary,registeredinvestmentadviserandwasVicePresidentofthe
BoardofDirectorsofBarHarborBankshares,apubliccompany.PriortoMr.Ahernswork
establishingBTIFinancialGroup,heservedasChiefInvestmentOfficerofBarHarborBanking
andTrustCompanyuntilhispromotionwithinthegreaterBanksharesorganizationtoCEOof
BTIFinancialGroup.PrevioustohisemploymentatBarHarborBankingandTrust(operating
subsidiaryofBarHarborBankshares)hewasPortfolioManageratWinslowAssetManagement
(nocorporaterelationtoWinslowCapitalGroup,LLC)aswellasPortfolioManageratWinslow
AssetManagementssuccessororganization,F.L.Putnam/WinslowInvestmentManagement

WinslowCapitalGroup,LLC2012AllRightsReservedwww.winslowcapitalgroup.com

Telephone:207.632.0215

EMail:pahern@winslowcapitalgroup.com

Company(nocorporaterelationtoWinslowCapitalGroup,LLC).Mr.Ahernbeganhis
investmentcareerasaFinancialConsultantwithMerrillLynch.

Page

WinslowCapitalGroup,LLC2012AllRightsReservedwww.winslowcapitalgroup.com

Telephone:207.632.0215

EMail:pahern@winslowcapitalgroup.com

Thomas C. Kane
Founder and Chief Transformation Strategist
KaneCarlton, LLC
Tom has 35 years of financial services experience specializing in helping clients review
and revise business models for the distribution of wealth management services. His
focus is optimizing results for financial institutions, family offices, RIAs, Hybrids and
vendors supporting wealth managers. He helps executive managers make informed
decisions by providing them with research, competitive intelligence, best practices and
innovative, objective solutions to reduce costs, increase profits and gain competitive
advantage.
A few of the services Tom provides are:

Conducting business unit(s) performance and capabilities assessments


Developing and implementing interdepartmental integration strategies
Reviewing and designing compensation plans
Streamlining distribution and operations models
Vetting and selecting third-party vendors
Leading organizational transformation
Updating/installing sophisticated investment management platforms

Mr. Kane obtained extensive practical experience through a variety of executive


management roles at banks of all sizes, ranging from a de novo community bank to a
multinational institution.
Tom is a frequent contributor to Bank Investment Consultant Magazine, BISA OneSource
and speaks at many industry events. He is the author of Wealth Biz Buzz, a thought-
provoking blog. He is the manager of the LinkedIn Group, Bank Investment Advisors,
Managers and Executives. Most recently he addressed the Bank Insurance Securities
Association, PROCU, Raymond James Financial Institutions Executives and the North
Dakota, South Dakota, Minnesota, New York and Virginia Bankers Associations on ways
to improve the client experience, organizational efficiencies and profits by modernizing
their wealth management offering.
9940 Hampton Road, Second Floor, Fairfax Station, VA 22039 / 703-690-9985 / info@kanecarlton.com
www.kanecarlton.com

OvercomingOperationalShortcomings

SimonAlgar,Consultant
WealthReports

DougBartels,VicePresident,WealthManagement
NorthernTrust


Simon Algar is the principal of wealth-reports, a boutique management consulting firm. Simon has over
twenty years of capital markets experience and provides operating model definition, business
transformation consulting and associated implementation support services to mid-large wealth managers
and the technology and consulting firms that support them. Representative clients include AssetMark, the
Capital Group, Comerica, Envestnet, E&Y, Fidelity, PNC, T. Rowe Price, US Bank and Wells Fargo.
Earlier in his career Simon was a business strategist with SunGard. Simon joined SunGard from an IT
product company that he founded, grew and then recreated as a SunGard business. Prior experience
was gained as a Product Manager with Chase and Citibank and as a tax accountant with Deloitte &
Touche. Originally from the UK, Simon holds degrees in Scots Law from Edinburgh and Strathclyde
Universities and an MBA from Thunderbird.

Doug Bartels, CFA | Vice President | Wealth Management


Functioning as a product manager responsible for overall management, leadership and
oversight in the development and implementation of new and enhanced trust products
focused around the emerging wealth management segments up through high net worth
individuals.

TakingaCloseLookattheDOLRuleandResponsibilitiesanditsImpactontheIndustry

DanielR.Kleinman,Partner
MorganLewis&BockiusLLP

RichardD.Marshall,Partner
KattenMuchinRosenman

DANIEL R. KLEINMAN
PARTNER

dkleinman@morganlewis.com

Washington, DC

Phone +1.202.739.5143

Fax +1.202.739.3001

1111 Pennsylvania Ave. NW \\ Washington, DC 20004-2541 \\ United States

Daniel R. Kleinman advises businesses on the duciary responsibilities provisions (Title I) of the
Employee Retirement Income Security Act (ERISA). He also counsels these clients on related tax,
corporate, and securities laws in connection with the structuring and marketing of investment
products (including private equity and hedge funds) and nancial services to employee benets
plans. Additionally, Daniel handles issues related to the regulation of broker-dealers and
investment advisers under US federal and state securities laws.
ADMISSIONS
District of Columbia
New Jersey
Pennsylvania

EDUCATION
Georgetown University Law Center, 2002, LL.M.
New York University, 1992, B.S.
Pennsylvania State University, Dickinson School of Law, 1997, J.D.

SECTORS
Financial Services
Technology

SERVICES
Securities and Corporate Governance
Mergers & Acquisitions
Investment Management
Private Equity
ERISA/Employee Benets Litigation
ERISA Fiduciary Duty

REGIONS
North America

9/24/2015

DEPARTMENT OF LABOR FIDUCIARY


RULE PROPOSAL
FINANCIAL RESEARCH ASSOCIATES, LLC
MANAGED ACCOUNTS & UMA SUMMIT
Daniel R. Kleinman
September 28, 2015

2015 Morgan, Lewis & Bockius LLP

What Happened?
October 22, 2010
Department of Labor (DOL) proposes Redefinition of Fiduciary

September 19, 2011


DOL announces intention to withdraw proposal

2013
GAO issues Rollover Report
Frontline report The Retirement Gamble

February 23, 2015


President Obama announces support for DOLs reproposal of Conflicted
Advice Rule
Rule sent to Office of Management and Budget for review

9/24/2015

What Happened? (Contd)


April 14, 2015
DOL publishes new proposed definition of fiduciary and exemption package

July 21, 2015


First comment period closes
Senate subcommittee hearing Restricting Advice and Education: DOLs
Unworkable Investment Proposal for American Families and Retirees

August 10 13, 2015


DOL hearings

September 10, 2015


House subcommittee hearing Preserving Retirement Security and Investment
Choices for All Americans

September 24, 2015


Second comment period closes

What are People Asking About?


How would this rule change how products and services are sold to
ERISA plans and IRAs?
What conversations can you have without becoming a fiduciary?
How do the requirements and available exceptions/exemptions differ for
IRAs, participant-directed plans, and non-participant-directed plans?
Participants, plan sponsor fiduciaries, plan asset fiduciaries?
Large plans and accounts and small plans and accounts?

How does this rule change litigation risks for providing services to IRAs
and ERISA plans?
What compliance and operational issues do the best interest standard
and other requirements raise?
How do the rules change for current ERISA/IRA fiduciaries?

9/24/2015

Rulemaking Timeline
Final rule to be effective 60 days after publication in Federal Register
Requirements of final rule become applicable 8 months after
publication in Federal Register (with potential exceptions)
Timeline may change due to
Comments
Litigation
Congressional actions
Elections

Why You Care


When is a fund subject to ERISA or Code section 4975?
Operations/management of fund: Fund must be a plan assets fund

Funds registered under 1940 Act are exempt from plan assets rules
Collective funds may be plan assets if a single plan invests
Insurance company separate accounts may be plan assets if a single plan invests
Other funds may be plan assets if they dont qualify as VCOC/REOC, and plans exceed 25%
test

Sales/distribution: Shares or interests offered to a plan or IRA


Non-fiduciary distributor (e.g., broker dealer under current law)
Reasonable compensation
Disclosures (for ERISA plans)
Fiduciary (e.g., discretionary manager)
Reasonable compensation
Disclosures (for ERISA plans)
No additional compensation without an exemption (e.g., PTE 77-4 for affiliated
investments; PTE 86-128 for affiliated brokerage)

9/24/2015

Why You Care


Current law
ERISA plan fiduciaries must:
Adhere to prudent expert standard of care and duty to act solely in the interest of
plan and participants and other fiduciary standards

ERISA plan and IRA fiduciaries must:


Comply with highly prescriptive prohibited transaction rules barring variable
compensation and many other common transactions (absent an exemption)

Proposed rule
Increases activities that would result in fiduciary status
Provides limited exceptions and exemptions
Imposes a contractual impartial conduct standards including duty to act in
clients best interests that would apply as a condition of a new exemption
Changes exemptions fiduciaries currently rely on

Why You Care (Contd)


If adopted as proposed, rule will have a profound impact on:
How services are provided to ERISA plans and IRAs
Retail brokerage
Institutional brokerage
Investment education and communications
Valuations and appraisals
Recordkeeping and platform providers

How all types of investment products and services are sold to ERISA plans and IRAs
How all types of investment products and services are sold to intermediaries that
become fiduciaries under the rule
Disclosures provided to small plan fiduciaries, plan participants, and IRAs
New proposed exemption would require extensive (some may say onerous and unworkable)
disclosure of investment-related compensation paid to financial institutions and their individual
representatives

9/24/2015

Overview of Proposal
1. Revised definition of investment advice fiduciary
a.

Broader definition of activities that result in fiduciary status

b.

Six explicit carve-outs

2. Two new prohibited transaction exemptions


a.

Best Interest Contract exemption

b.

Principal transactions exemptions

3. Amendments to ten current prohibited transaction exemptions, including


exemptions for
a.

Affiliated brokerage

b.

Affiliated mutual funds

c.

Insurance products

d.

Agency transactions

e.

Underwriting

f.

Margin loans

Revised Definition of Investment Advice


Fiduciary
Three primary elements:
1. Rendered pursuant to a written or verbal agreement, arrangement or
understanding
2. Individualized or specifically directed to the advice recipient
3. For consideration in making investment or management decisions

And is one of the following:

A buy, sell or hold recommendation


A recommendation as to the management of securities or other property
Recommendations to rollover assets from plans and IRAs, and recommendations
as to the investment or management of such assets
An appraisal or fairness opinion regarding the value of securities or other property
in connection with a specific transaction or transactions
A recommendation of a person who will receive a fee in connection with any of
the above

Also a fiduciary if you say you are one and do any of the activities above.

10

9/24/2015

Exceptions from Fiduciary Status


1. Sellers exception for large ERISA plans (100+ participants) and
accounts ($100M+ assets)

May permit, for example, an asset manager to recommend funds in a sales pitch to
an institutional client without becoming a fiduciary to the client

2. Counterparties advice in connection with certain swaps for ERISA


plans
3. Employees of the plan sponsor
4. Platform providers (including selection and monitoring assistance)
5. Valuations for ESOPs and pooled investment vehicles, and for legally
required reports and disclosures
6. Investment education
+

Exception for brokerage execution preserved

11

New Exemptions: Best Interest Contract


Scope: Covers non-discretionary advice to sponsors/fiduciaries of small,
non-participant directed plans, plan participants, and IRA account owners to
buy, sell, or hold certain assets
Conditions:
Contract: fiduciary representation, impartial conduct standards, warranties,
disclosures
Point of sale disclosure: estimated costs to client of holding investment in a dollar
amount if held for 1-, 5-, and 10- years
Annual disclosure: actual costs to plan or IRA and actual compensation received by
firm and individual advisers in connection with account
Public website: compensation payable to financial institution and individual
advisers in connection with each asset bought, sold, or held in last 365 days,
updated quarterly, including source of compensation
Range of investment options: additional conditions apply to closed architecture
arrangements
DOL disclosure and recordkeeping requirements: aggregated data regarding
inflows, outflows, holdings, and returns, including identity and amounts of revenue
received; DOL reserves right to publicly disclose data received

12

9/24/2015

New Exemptions: Principal Transactions


Covers nondiscretionary advice related to purchases and sales of certain
debt securities in principal transactions
Conditions:
Contract: fiduciary representation, some impartial conduct standards,
warranties, disclosures, affirmative consent (terminable at will)
Independent issuer
Moderate credit risk
Cash only/no in-kind transactions
Price must be at least as favorable as price outside a principal transaction, and
at least as favorable as the contemporaneous price offered by two unaffiliated
counterparties
Disclosures: point of sale, confirmations, annual disclosures, upon request
Recordkeeping

13

Amendments to Current Exemptions


These amendments would generally impose a best interest standard to
obtain relief under a number of exemptions covering transactions with
ERISA plans and IRAs
Amendments to PTE 86-128 (Affiliated Brokerage) change its application to
current fiduciaries:

Specifically defines and limits commissions for which relief is available


Extends coverage to principal trades of mutual fund shares (including riskless principal
transactions) (currently covered under a part of PTE 75-1 proposed to be revoked), subject to
new limitations on covered commissions
No longer be available for non-discretionary investment advice fiduciaries to IRAs (relief moved
to Best Interest Contract exemption)
Increase conditions for discretionary advice fiduciaries to IRAs

Amendments to PTE 84-24 (Insurance Agents and Brokers and Mutual Fund
Principal Underwriters) would revoke relief for transactions involving variable
annuity contracts and other annuity contracts that constitute securities
under federal securities laws and mutual fund shares (relief moved to Best
Interest Contract exemption)
Amendments to PTE 77-4 would impose best interest standard

14

9/24/2015

Amendments to Current Exemptions


(Contd)

PTE 75-1, Part I (Agency Transactions): Relief for providing certain


nonfiduciary services to plans and IRAs would be revoked with the
intention that persons who seek to engage in these transactions rely
on ERISA section 408(b)(2) or Code section 4975(d)(2)

15

Selected Hot Issues for Managed Account


Programs
Marketing of Advisory Programs and Services
Definition of Recommendation
Expand the Investment Education Carve-Out
Provide an Explicit Sellers Exception for Services
Model Providers Should Not Be Treated as Investment Advice
Fiduciaries
Specific Intermediary/Model Manager Carve-Out
Principal Transactions with Program Sponsors
Effect on Current Exemptions
PTE 84-24 (Insurance Products)
PTE 86-128 (Affiliated Transactions)
PTE 77-4 (Affiliated Mutual Funds)
PTE 75-1 (Underwritings)

16

9/24/2015

Other Selected Hot Issues


Scope of Sellers Exception
Systems changes needed to satisfy point-of-sale and other disclosures
Compliance with impartial conduct standards
Monitoring for violations of the impartial conduct standards on a transaction basis
Fiduciary status of model providers working through intermediaries
Limits on assets covered under exemptions
Issues raised by limiting investment education
Compliance with 100 participant thresholds
Review of current business practices in light of changes to existing exemptions, such as
PTEs 86-128, 77-4 and 75-1
How will the rule change fiduciary responsibility and administrative requirements for plan
sponsors
How does the contractual best interest standard change litigation/arbitration risks for
ERISA plans and IRAs

17

OPEN DISCUSSION
Questions and Answers (maybe).

2015 Morgan, Lewis & Bockius LLP

18

9/24/2015

ASIA
Almaty
Astana
Beijing
Singapore
Tokyo

EUROPE
Brussels
Frankfurt
London
Moscow
Paris

MIDDLE EAST
Dubai

NORTH AMERICA
Boston
Chicago
Dallas
Harrisburg
Hartford
Houston

Los Angeles
Miami
New York
Orange County
Philadelphia
Pittsburgh

Princeton
San Francisco
Santa Monica
Silicon Valley
Washington, DC
Wilmington

19

THANK
YOU
This material is provided as a general informational service to clients and friends of Morgan, Lewis & Bockius LLP. It does not constitute, and should not be
construed as, legal advice on any specific matter, nor does it create an attorney-client relationship. You should not act or refrain from acting on the basis of this
information. This material may be considered Attorney Advertising in some states. Any prior results discussed in the material do not guarantee similar outcomes.
Links provided from outside sources are subject to expiration or change.
2015 Morgan, Lewis & Bockius LLP. All Rights Reserved.

20

10

CoChairsRecap
KevinD.Mahn,President&ChiefInvestmentOfficer
Hennion&WalshAssetManagement

Kevin D. Mahn joined Parsippany, NJ based Hennion & Walsh as a Managing


Director in 2004. Currently serving as the President and Chief Investment Officer
(CIO) of Hennion & Walsh Asset Management, Mr. Mahn is responsible for all of
the Wealth and Asset Management products and services offered at the Firm
including fee-based money management and the various portfolio strategies
within the SmartTrust series of Unit Investment Trusts (UITs). Mr. Mahn was
also the former portfolio manager of the SmartGrowth Mutual Funds.
Mr. Mahn is the author of the quarterly ETF and CEF Insights newsletter as well
as one of the co-authors of the book, Exchange Traded Funds: Conceptual and
Practical Investment Approaches, 2009 Riskbooks. Mr. Mahn is a member of
the Forbes Investor team and a frequent contributor to the Forbes Intelligent
Investing and Advisor Intelligence blogs as well as the Seeking Alpha website.
Prior to Hennion & Walsh, Mr. Mahn was a Senior Vice President at Lehman
Brothers where he held several senior management positions, including CAO of
the High Net Worth Product and Services group within Lehmans Wealth and
Asset Management division as well as COO of Lehman Brothers Bank, during his
eleven year tenure with the Firm.
Mr. Mahn received his Bachelor's degree in Business Administration from
Muhlenberg College and his M.B.A. in Finance from Fairleigh Dickinson University.
Mr. Mahn has also served as an adjunct professor at Fairleigh Dickinson University
within the Department of Economics, Finance and International Business.
Mr. Mahn was the recipient of the 2009 Institutional Investor Rising Stars of
Mutual Funds Award. Mr. Mahn is also the Co-Chair of the NICSA UIT Industry
Committee and received an MVP award from NICSA for his leadership of the UIT
committee.
Interviews with, as well as byline articles and insights from, Mr. Mahn have
appeared in/on CBS News, Fox News, CNBC, Fox Business News, Wall Street
Journal, Investors Business Daily, Bloomberg.com, Fortune, Forbes, Business
Week, New York Times, Wall Street Week, CNNMoney.com, Investment Advisor
Magazine, SmartMoney, The Star-Ledger, The Daily Record, Reuters, Fund Action,
The Street.com, CNBC.com, Fox Business.com, Dow Jones Newswires,
MarketWatch, Ignites, Money Management Executive, Daily Finance, Wall Street
Transcript, Registered Rep., Financial Planning, , Risk Magazine, ETF Radar
Magazine, Structured Products Daily, Financial Times and Investment News.
Hennion & Walsh
2001 Route 46, Waterview Plaza
Parsippany, NJ 07054
P: (973) 299-8989 / F: (973) 299-0692
kmahn@hennionandwalsh.com
Visit our blog @ http://www.hennionandwalsh.com/blogs/index.html
Securities Offered through Hennion & Walsh, Inc. Member: FINRA SIPC

ATwoPartAssetFlowDiscussion
PartI:SuccessfullyPositioningAlternativeInvestmentsinYourManagedAccount&UMAPlatform
Moderator:
PaulM.Weisenfeld,Partner
PerellaWeinbergPartnersLP
Panelists:
RussellTipper,ManagingDirector,ManagedSolutionsGroup
MerrillLynchGlobalWealthManagement
ColinJ.Healy,CIMA,AIF,ExecutiveDirector,HeadofBusinessDevelopment,GlobalInvestmentSolutions
HighTower

Mr. Weisenfeld is a Partner in the Asset Management business at Perella Weinberg Partners
where he oversees expansion of the Firms intermediary channel efforts. In his most recent role
at Morgan Stanley as a Managing Director and Director of Mutual Funds and ETFs, Mr.
Weisenfeld oversaw a number investment products business units, including open-end domestic
and offshore mutual funds, ETFs, money market funds and 529 plans. Mr. Weisenfeld was
awarded Institutional Investors 2010 Rising Star of Mutual Funds. Prior to Morgan Stanley,
Mr. Weisenfeld was a Managing Director and the COO for Citigroup Global Wealth
Managements Investment Products business unit. In this role he directed strategy for the Mutual
Funds, Insurance, Annuities, UIT and Alternative Investments businesses. Earlier in his career,
Mr. Weisenfeld was the Director of Alternative Investments for Smith Barney. Mr. Weisenfeld
received his Bachelor of Science from Cornell University and a Juris Doctor from Benjamin N.
Cardozo School of Law.

Russell W. Tipper, CIMA


Director, Managed Solutions Group
Merrill Lynch

Russell W. Tipper is Managing Director, Managed Solutions Group within the Global
Wealth Retirement Solutions team (GWRS), a unit of Merrill Lynch. In this role,
Tipper is Head of the Third Party Discretionary and Client Discretionary Platform
teams with responsiblity for driving the strategic direction and sustaining the day-today business for the Consults, Unified Managed Account, Mutual Fund Advisor,
Merrill Lynch Personal Advisor, Strategic Portfolio Advisor, Managed Account
Services and BlackRock Private Investors programs as well as the services of
Managed, Custom Managed and Personalized with Client Discretion in Merrill Lynch
One.
Prior to joining Merrill Lynch, Tipper was Head of Marketing for the Nationwide
Advisory Services Program with responsibility for managing and implementing
marketing support for all fee-based programs. Previously, he was the product manager
for Putnams Taxable/Tax-Exempt Fixed Income and Global Asset Allocation product
lines with responsibilities to enhance strategic positioning, take advantage of
competitive opportunities and support profitable business mix within the retail sales
organization. During that tenure, Tipper was part of several product development
initiatives for Putnams separately managed accounts, global asset allocation and fixedincome product lines. Tipper has been a member of the investment community since
1997.
Tipper holds a masters degree in finance from Northeastern University and a
bachelors degree in economics from Denison University. He also holds the Certified
Investment Management Analyst designation.

Banc of America Investment Advisers, Inc. is an SEC-registered investment adviser and wholly owned subsidiary
of Bank of America, N.A.
Global Wealth & Investment Management is a division of Bank of America Corporation. Banc of America

Investment Services, Inc. , U.S. Trust, Bank of America Private Wealth Management and Columbia Management
are all affiliates within Global Wealth & Investment Management.
Banking products are provided by Bank of America, N.A., Member FDIC.
Investment products:

Are Not FDIC Insured

May Lose Value

Are Not Bank Guaranteed

Banc of America Investment Services, Inc. is a registered broker-dealer, member FINRA and SIPC, and a
nonbank subsidiary of Bank of America, N.A.

ColinJ.Healy,CIMA,AIF
ExecutiveDirector,HeadofBusinessDevelopment
GlobalInvestmentSolutions,HighTower

ColinHealybringsmorethan13yearsofwealthmanagementandconsultingexperiencetoHighTower.
PriortojoiningGlobalInvestmentSolutions,Mr.HealywasaManagingDirectorandPartnerat
HighTowerwithLyonWealthManagementinSanFrancisco,CA.BeforejoiningHighTowerhespent7
yearsatMorganStanleyasaSeniorConsultantandFinancialAdvisorintheGlobalWealthManagement
division.
Mr.HealyholdsaBS/MBAdegree,withhonors,infinancialanalysisandcorporatefinancefromthe
JacobsSchoolofManagementattheStateUniversityofNewYorkatBuffalo.HeisaCertified
InvestmentsManagementAnalyst,AccreditedInvestmentFiduciaryandaleveltwocandidateforthe
CharteredAlternativeInvestmentAnalystdesignation.HeholdsFINRASeries7,66&31licenses.

PartII:WhatisPromptingETFandIndexFundGrowthandWillitContinue?

Moderator:
PaulM.Weisenfeld,Partner
PerellaWeinbergPartnersLP

Panelists:
JohnStreur,PresidentandChiefExecutiveOfficer,
CalvertInvestments

MichelleM.Fuller,VicePresident,ETFStrategy
PIMCOETFs

Mr. Weisenfeld is a Partner in the Asset Management business at Perella Weinberg Partners
where he oversees expansion of the Firms intermediary channel efforts. In his most recent role
at Morgan Stanley as a Managing Director and Director of Mutual Funds and ETFs, Mr.
Weisenfeld oversaw a number investment products business units, including open-end domestic
and offshore mutual funds, ETFs, money market funds and 529 plans. Mr. Weisenfeld was
awarded Institutional Investors 2010 Rising Star of Mutual Funds. Prior to Morgan Stanley,
Mr. Weisenfeld was a Managing Director and the COO for Citigroup Global Wealth
Managements Investment Products business unit. In this role he directed strategy for the Mutual
Funds, Insurance, Annuities, UIT and Alternative Investments businesses. Earlier in his career,
Mr. Weisenfeld was the Director of Alternative Investments for Smith Barney. Mr. Weisenfeld
received his Bachelor of Science from Cornell University and a Juris Doctor from Benjamin N.
Cardozo School of Law.

John Streur
President and Chief Executive Officer of Calvert Investments, Inc.
John Streur is President and Chief Executive Officer of Calvert Investments, Inc., a $13 billion
investment management firm that specializes in responsible and sustainable investing across
global capital markets. Calvert serves all types of investors through its family of mutual funds
and separate accounts. John is also President and a Trustee of the Calvert Funds and a Director of
Calvert Foundation and member of its Executive Committee.
Mr. Streur began to focus his energy exclusively on responsible and sustainable investing in
2012, as President, Director and Principal of Portfolio 21, a boutique investment management
firm specializing in global environmental investing. Previously, John spent 20 years at Managers
Investment Group LLC (and its predecessor), a firm he co-founded and where he served as
President, CEO and Chair of the Investment Committee. John was also President and Trustee of
the firms fund family, Managers Funds and Managers AMG Funds. Managers Investment
Group LLC grew to over $30 billion in assets under management and offered investment
strategies across global equity, debt and derivative markets. John has managed socially
responsible investments at the request of institutional clients, including public funds, religious
institutions, and college and university endowments since 1991.
Mr. Streur is a graduate of the University of Wisconsin (Bachelor of Science, College of
Agriculture and Life Sciences), where he also competed nationally and internationally as a
member of the University's Rowing Team and as a member of the United States National
Rowing Team. He and his wife Mary have four adult children.

Updated3/18/15

Highresolutionheadshotavailableuponrequest.

Michelle M. Fuller
Ms. Fuller is a vice president and ETF strategist in the global wealth management group. She is
responsible for ETF business development with RIAs, ETF Strategists, Asset Managers, Bank
Trusts and Hedge Funds in the Northeast. Additionally, Michelle manages ETF home office
relationships with broker dealers across the country. Prior to joining PIMCO in 2012, she held
various roles at State Street Global Advisors/SPDR ETFs, including senior national accounts
manager, sales desk manager and internal sales consultant. Ms. Fuller began her career at
UBS as a wealth management associate. She has 13 years of investment and financial services
experience and holds a bachelor's degree in marketing and international business from Penn
State University. Additionally, she earned the Certified Investment Management Analyst (CIMA)
designation through the Wharton School of the University of Pennsylvania.

AdoptionStrategies:ConvertingtheBusinessModeltoaTamporManagedAccountOffering
PaulG.Ahern,ManagingPrincipal
WinslowCapitalGroup,LLC
GavinSpitzner,President
WealthConsultingPartners,LLC

ProfessionalBiography

PaulG.AhernisthefoundingprincipalofWinslowCapitalGroup,LLC
(winslowcapitalgroup.com),aleadinginstitutionalconsultingfirmforthebankwealth
managementchannel.WinslowCapitalGroup,LLCprovidesnicheexpertiseforbanksandtheir
affiliatesseekingtoachieveefficiencyandsustainableprofitability.Mr.Ahernhas30yearsof
experienceasahandsonpractitionerinbothabanktrustenvironment,andwithinRegistered
InvestmentAdvisers,thelast12yearasaleadingconsultanttobankswealthdivisionsandtheir
affiliates.

WinslowCapitalGroup,LLChelpsinstitutionalclientsmaketherightdecisiononvendor
selection;integrationofaffiliatedbusinesslines;streamliningsystemsofrecord;custody;
internalandexternalreporting;implementation&adoption;howtouseTurnKeyAsset
ManagementPlatforms(TAMP);andPointSolutionModels.Weprovidenicheexpertiseand
guidanceontopicsincludinghelpincraftingastrategicvisionandtacticalimplementationplan
fororganizationsneedingtomaketimelyandcosteffectivetransitions.

Mr.Ahernsassignmentsareonboththebuysideandthesellsideincludingbanktrust
companies;sovereignfunds;RegisteredInvestmentAdvisers;proprietarybankaffiliated
investmentmanagementprograms;separatelymanagedaccountplatforms(SMA);Overlay
technologyfirms;UnifiedManagedAccountofferings(UMA)andUnifiedManagedHousehold
(UMH)architectures.

Mr.AhernearnedabaccalaureatedegreefromtheUniversityofMassachusettsandanMBA
withaconcentrationinfinancefromUniversityofMaine.PriortofoundingWinslowCapital
Group,LLC,Mr.AhernwasExecutiveVicePresidentandthenCEOofBTIFinancialGroupfrom
itsfoundingasanoperatingsubsidiaryofBarHarborBanksharesuntil2002.Mr.Ahernserved
asPresidentofBTIssubsidiary,registeredinvestmentadviserandwasVicePresidentofthe
BoardofDirectorsofBarHarborBankshares,apubliccompany.PriortoMr.Ahernswork
establishingBTIFinancialGroup,heservedasChiefInvestmentOfficerofBarHarborBanking
andTrustCompanyuntilhispromotionwithinthegreaterBanksharesorganizationtoCEOof
BTIFinancialGroup.PrevioustohisemploymentatBarHarborBankingandTrust(operating
subsidiaryofBarHarborBankshares)hewasPortfolioManageratWinslowAssetManagement
(nocorporaterelationtoWinslowCapitalGroup,LLC)aswellasPortfolioManageratWinslow
AssetManagementssuccessororganization,F.L.Putnam/WinslowInvestmentManagement

WinslowCapitalGroup,LLC2012AllRightsReservedwww.winslowcapitalgroup.com

Telephone:207.632.0215

EMail:pahern@winslowcapitalgroup.com

Company(nocorporaterelationtoWinslowCapitalGroup,LLC).Mr.Ahernbeganhis
investmentcareerasaFinancialConsultantwithMerrillLynch.

Page

WinslowCapitalGroup,LLC2012AllRightsReservedwww.winslowcapitalgroup.com

Telephone:207.632.0215

EMail:pahern@winslowcapitalgroup.com

Gavin Spitzner
President of Wealth Consulting Partners, LLC

Gavin Spitzner is President of Wealth Consulting Partners, a boutique consultancy that advises
Financial Institutions and their Providers on how to leverage technology and best practices in
Portfolio Management, Goals-Based and Digital Advice to improve the
client experience and drive topline revenue and bottomline business
results.
Gavin has more than 25 years of experience working in and
consulting to Fortune 500 companies with a breadth of experience
encompassing strategic consulting, business development, process
reengineering, product development, digital strategy, marketing and
professional development. He has partnered with numerous top 25
U.S. and Global banks and broker-dealers to develop and implement
innovative investment management platform solutions leveraging modern technology and
processes to improve business performance.
More information can be found on Gavins corporate website at wealthconsultingpartners.com.

10/7/2015

13th Annual UMA & Managed Accounts Summit

PaulG.Ahern,ManagingPrincipal

GavinSpitzner,President
Wealth Consulting Partners, LLC
Wealth Management Strategy,
Design and Deployment

September 29, 2015

Platform Adoption: Framing Thoughts


EvolvingBank WealthManagementMetrics

Adopting What?

UMH

Rep-As-PM

Passive

Alts

Robo/ Digital

Platform
Consolidation

Converting all
Business? Just for
new biz? Changing
client portfolios or just
adopting new tech?

Goals-Based
Investing

Repricing

Goals-Based
Performance
Measurement

Overlay Tech

Retirement
Income

Tax-Efficiency

Role
Evolution

Value Prop
Evolution

Technology

End-to-End?
Point Solutions?
- Trading
- Rebalancing?
- Prop Gen?
- Reporting?

10/7/2015

Implementation and adoption are different


Achieving adoption is the functional equivalent of restructuring the wealth
business model when it comes to managed accounts / UMA / UMH /
overlay.

Picture of a future adoption failure


when adoptions fail it is most often because:
Underestimate the scope and impact on the business and leave too little
time and set unrealistic expectations.
Change management effort is limited to technology implementation and
delegated to IT and not senior management.
Partial adoptions: Adding a new offering without converting all accounts to
one process.
Fail to reprice all services if incurring new costs
Staff is allowed to choose to work with new platform or continue what
theyve been doing successfully in the past.

10/7/2015

What it takes to transition a strategic plan to


reality: what attributes prove more challenging
than first envisioned
Many institutional clients do not understand the full implications
of what theyve purchased & enabled
Aligning the fee schedule for profitabilityespecially in banks
Onboarding clients and capturing account sticky notes
Getting PMs to learn to think through their process using a new
toolkit
Procedures (as differentiated from policy)
Compensation policies aligning with desired behavior

Characteristics that should be part of a


successful adoption
Automation and replication of otherwise manual work.
Too many platforms just bundle what are essentially discreet and still
highly manual workflows under a common umbrella and call it
automation.
Replication requires automation of complex analysis and
customization work otherwise done manually.
Tax aware based on client specific not generalizations to the tax lot
level
Ability to document to client why they are better off paying a higher fee
Embrace and manage change and not force a platform to copy your
inefficiencies scale.

10/7/2015

Platform Adoption: Adoption Success


Factors and Key Elements
- Business case
- Metrics
-

Including revamped Employee Performance Scorecard Metrics/Variable


Comp Drivers

Involve and recognize all constituents


Is it transformational or just replatforming what already doing?
Future state vision (showing change management from current state)
Granular Requirements
Process Engineering/Workflows
Use Cases for Demos, Testing and Training
Clean Data
Robust Testing
Training and Communication
-

Cross-Departmental and Functionally-Specific (Portfolio Management,


Product Management, Sales, Trust Admin, Ops, IT, Compliance,
Marketing, Private Banking, Commercial Banking, etc.)

- Project Management Resources


- Product/Program Management Resources
7

Adoption Best Practices


EvolvingBank WealthManagementMetrics

Ensure youre ready


Treat as change management exerciseutilize best practices
of change management
Recognize whats involvednot just about the provider building
a site for you configured based on your needs.
Engage cross-functional team early and oftenhelps ensure
measure twice/cut once clarity and drives buy-in
Dont let the inmates run the asylum: project cant be driven by
PMO, IT, Usersneeds consistent executive focus
Many implementations fail or take much too long due to a lack
of shared clarity between Financial Institutions and their
Providers.
Clear roles and responsibilities RACI

10/7/2015

Provider
Works streams

Product
Mgmt

PMO

PMs

Trust
Officers

Legal
Compliance

Ops
Tech

Steering
Comm

PMO

Config

Product
Mgmt

Data
Training
Conv
Mgr
Mgr/ Ops

RM

C, I

NA

NA

NA

C, I

C, I

C, I

Research,
Diligence,
Assembly

C, I

C, I

NA

C, I

C, I

C, I

Profiling and
Planning

C, I

C, I

C, I

C, I

C, I

Proposal-Ing
and Practice
Management

C, I

C, I

C, I

C,I

C, I

C, I

NA

C, I

Implement
Investing

C, I

C,I

C, I

C, I

C, I

C, I

C, I

C, I

C, I

C, I

C, I

C, I

C, I

C,I

C, I

C, I

C, I

C, I

C, I

C, I

C, I

C, I

C,I

NA

NA

NA

C, I

C, I

C, I

C, I

C, I

NA

C,I

C,I

NA

NA

NA

C,I

Legal

Investment
Operations
and Service
Client and
Advisory
Reporting
Compliance

Infrastructure

Training

Responsible

Whoisresponsiblefortheexecutionofthetask?

C Consulted

WhoaretheSMEstobeconsulted?

Accountable

Who is accountable for tracking tasks, status


reporting?

I Informed

Whoneedstobeupdatedon
progress?

Q&A
EvolvingBank WealthManagementMetrics

10

AchievingRetirementIncomeGoals
MichaelJones,CFA,ChairmanandChiefInvestmentOfficer
RiverfrontInvestmentGroup,LLC

MICHAEL JONES, CFA


CHAIRMAN AND CHIEF INVESTMENT OFFICER
Michael serves as Chairman and Chief Investment Officer, bringing more than 25
years of global investment experience to his role in leading the organization.
Michaels primary investment responsibility is setting the firms overall asset
allocation strategy and ensuring appropriate investment and risk management
processes are applied to all of the firms portfolio decisions. In addition, he serves
on the firms Operating Committee.
Prior to launching RiverFront in 2008, Michael was the Chief Investment Officer at
Wachovia Securities from 2002. In this capacity, he was responsible for all aspects
of financial advice, including asset allocation, tactical strategy and portfolio
implementation and managed over $75B in discretionary portfolio assets.
Michael began his career in fixed income portfolio management, serving in a
variety of roles cumulating in his promotion to Chief Fixed Income Officer for
Mentor Investment Group. While at Mentor and its successor firm, Evergreen
Investment Management, Michael managed over $12 billion in high grade and high
yield fixed income assets and was responsible for the design and implementation
of advanced fixed income and risk management analytics.
Michael is a regular guest on the financial news channels (CNBC, Bloomberg) and is
frequently quoted in the financial press.
Michael earned a BA in Economics from the College of William and Mary and an
MBA from the Wharton School at the University of Pennsylvania. He received his
CFA designation in 1990.
The Art: Though Michaels artistic side is less developed than his financial side,
he has compensated for this shortcoming by a marrying a woman with fantastic
artistic tastes. As a result, their three children express themselves through the
guitar, piano, musical composition and drama. Michaels artistic role in the
family is confined to occasionally picking out the wine for dinner and playing with
their dog Spot, who also lacks any discernible artistic talents.

THE ART & SCIENCE OF DYNAMIC INVESTING.

SEPARATE ACCOUNTS

MUTUAL FUNDS

ETF PORTFOLIOS

10/7/2015

NOT YOUR PARENTS RETIREMENT


STRATEGY
Michael Jones
Chairman & Chief Investment Officer
September 2015

RIVERFRONT OVERVIEW

Pioneers in ETF portfolio management


More than $5.2 billion in Assets Under
Management as of 6/30/15
Strategic allocation based on Price Matters
Tactical adjustments based on shorter term
opportunities and risks
RiverFronts Price Matters discipline compares inflation-adjusted current prices relative to their long-term trend to help
identify extremes in valuation.

FINANCIAL PROFESSIONAL USE ONLY NOT FOR DISTRIBUTION TO THE PUBLIC

10/7/2015

BABY BOOMER PARENTS HAD BIG


ADVANTAGES IN RETIREMENT

Guaranteed pension benefits


High real interest rates
Relatively generous social security benefits
A typical two pack a day smoking habit

RiverFronts Price Matters discipline compares inflation-adjusted current prices relative to their long-term trend to help
identify extremes in valuation.

FINANCIAL PROFESSIONAL USE ONLY NOT FOR DISTRIBUTION TO THE PUBLIC

BOTTOM LINE:
BABY BOOMER RETIREMENT
SOLUTIONS SHOULD NOT LOOK LIKE
THOSE OF THEIR PARENTS.

10/7/2015

NOMINAL BOND RETURNS ARE EASY TO PREDICT

10 Year Treasury Yield at Periods Beginning


Source: RiverFront Investment Group, Center for Research in Security Prices (CRSP), Booth School of Business, The University of Chicago.

FINANCIAL PROFESSIONAL USE ONLY NOT FOR DISTRIBUTION TO THE PUBLIC

WHICH IS ASSET CLASS IS BETTER FOR RETIREES?


ANNUAL INCOME INDEXEDTO100ON12/31/1974
12.0

10.0

8.0

6.0

4.0

2.0

0.0

**Above chart is for illustrative purposes only.


Source: Calculated based on data from CRSP 1925 US Indices Database 2014 Center for Research in Security Prices (CRSP), Booth School of
Business, The University of Chicago; Robert Shiller; RiverFront Investment Group; Past performance is no guarantee of future results. Please see the
end of this presentation for important disclosure information.

FINANCIAL PROFESSIONAL USE ONLY NOT FOR DISTRIBUTION TO THE PUBLIC

10/7/2015

WHAT DO RETIRED PEOPLE REALLY


NEED FROM THEIR PORTFOLIO?

Income!

WHICH IS ASSET CLASS IS BETTER FOR RETIREES?


ANNUAL INCOME INDEXEDTO100ON12/31/1974
12.0

10.0

TBills
10YearTreasury
LargeCapStocks

8.0

6.0

4.0

2.0

0.0

Source: Calculated based on data from CRSP 1925 US Indices Database 2014 Center for Research in Security Prices (CRSP), Booth School of
Business, The University of Chicago; Robert Shiller; RiverFront Investment Group; Past performance is no guarantee of future results. Please see the
end of this presentation for important disclosure information.

FINANCIAL PROFESSIONAL USE ONLY NOT FOR DISTRIBUTION TO THE PUBLIC

10/7/2015

THE REALITY OF RETIREMENT RISK


MANAGEMENT
1. Investors who do not panic should
eventually recover the money lost
in the stock market.
2. Money lost in the bond market relative
to inflation is gone forever.

FINANCIAL PROFESSIONAL USE ONLY NOT FOR DISTRIBUTION TO THE PUBLIC

THE THREE BARRIERS TO EQUITY-BASED


INCOME SOLUTIONS
Culture
What I tell you three times is true
Performance benchmarks

Compliance
Conflicts of interest
Stock options + investment banks = buybacks
Utilities, REITs, and MLPs illustrate that paying dividends
doesnt necessarily sacrifice capital gains.

10

FINANCIAL PROFESSIONAL USE ONLY NOT FOR DISTRIBUTION TO THE PUBLIC

10/7/2015

THE PRIMARY OBLIGATION OF OUR INDUSTRY


The largest demographic wave in US history is
approaching retirement.
Pensions and Social Security wont fund their needs.
Traditional income alternatives offer low income and
high risks.
The Three Cs have deemphasized equity investments
as a core income solution.
Something has to change if the baby boomers are to
have a secure retirement.

11

FINANCIAL PROFESSIONAL USE ONLY NOT FOR DISTRIBUTION TO THE PUBLIC

DISCLOSURES

Information on charts from CRSP: Calculated based on data from CRSP 1925 US Indices Database 2014 Center for
Research in Security Prices (CRSP), Booth School of Business, The University of Chicago. Large Cap Universes used in
the chart is defined by CRSP based on market capitalization.
Used as a source for cap-based portfolio research appearing in publications, and by practitioners for benchmarking,
the CRSP Cap-Based Portfolio Indices Product data tracks micro, small, mid- and large-cap stocks on monthly and
quarterly frequencies. This product is used to track and analyze performance differentials between size-relative
portfolios.
CRSP ranks all NYSE companies by market capitalization and divides them into ten equally populated portfolios.
Alternext and NASDAQ stocks are then placed into the deciles determined by the NYSE breakpoints, based on market
capitalization. The series of 10 indices are identified as CRSP 1 through CRSP 10, where CRSP 10 has the largest
population and smallest market-capitalization. CRSP portfolios 1-2 represent large cap stocks, portfolios 3-5 represent
mid-caps and portfolios 6-10 represent small caps.

12

Data from Robert Shiller used in this presentation are discussed in two books by Robert Shiller -- Irrational Exuberance
(Princeton University Press 2000, Broadway Books 2001, 2nd ed., 2005) and Market Volatility (Cambridge, MA: MIT
Press, 1989). This data set consists of monthly stock price, dividends, and earnings data and the consumer price index
(to allow conversion to real values), all starting January 1871. For further information about Robert Shillers
methodology, please visit www.econ.yale.edu/~shiller/

RiverFronts Price Matters discipline compares inflation-adjusted current prices relative to their long-term trend to
help identify extremes in valuation.

Exchange Traded Funds (ETFs) are sold by prospectus. Please consider the investment objectives, risk, charges
and expenses carefully before investing. The prospectus and summary prospectus, which contains this and
other information, can be obtained by calling your financial advisor. Read it carefully before you invest.

RiverFront Investment Group, LLC, is an investment advisor registered with the Securities Exchange Commission under
the Investment Advisors Act of 1940. The company manages a variety of portfolios utilizing stocks, bonds, and
exchange-traded funds (ETFs). Any discussion of the individual securities that comprise the portfolios is provided for
informational purposes only and should not be deemed as a recommendation to buy or sell any individual security
mentioned. Opinions expressed are current as of the date shown and are subject to change. They are not intended as
investment recommendations.

FINANCIAL PROFESSIONAL USE ONLY NOT FOR DISTRIBUTION TO THE PUBLIC

10/7/2015

PRINCIPAL RISKS

13

Stocks represent partial ownership of a corporation. If the corporation does well, its value increases, and investors
share in the appreciation. However, if it goes bankrupt, or performs poorly, investors can lose their entire initial
investment (i.e., the stock price can go to zero). Bonds represent a loan made by an investor to a corporation or
government. As such, the investor gets a guaranteed interest rate for a specific period of time and expects to get
their original investment back at the end of that time period, along with the interest earned. Investment risk is
repayment of the principal (amount invested). In the event of a bankruptcy or other corporate disruption, bonds are
senior to stocks. Investors should be aware of these differences prior to investing.

Master Limited Partnership (MLP) investing includes risks such as equity- and commodity-like volatility. Also,
distribution payouts sometimes include the return of principal and, in these instances, references to these payouts as
"dividends" or "yields" may be inaccurate and may overstate the profitability/success of the MLP. Additionally, there
are potentially complex and adverse tax consequences associated with investing in MLPs. This is largely dependent on
how the MLPs are structured and the vehicle used to invest in the MLPs. It is strongly recommended that an investor
consider and understand these characteristics of MLPs and consult with a financial and tax professional prior
to investment.

Real Estate Investment Trusts (REITs) investing entails special risks, including credit risk, interest rate fluctuations
and the impact of varied economic conditions.

ETFs are subject to substantially the same risks as those associated with the direct ownership of the securities
comprising the index on which the ETF is based. Additionally, the value of the investment will fluctuate in response
to the performance of the underlying index. ETFs typically incur fees that are separate from those fees charged by
RiverFront. Therefore, investments in ETFs will result in the layering of expenses.

Fixed Income Securities' value generally declines in a rising interest rate environment.

High-yield securities (including junk bonds) are subject to greater risk of loss of principal and interest, including
default risk, than higher-rated securities.

FINANCIAL PROFESSIONAL USE ONLY NOT FOR DISTRIBUTION TO THE PUBLIC

BreakingOutoftheUMHVendorHypetoTangleImplementationStrategies
EricLordi,HeadofCrossPlatformDevelopment
BarclaysWealth

Eric B. Lordi is the Head of Cross Platform Development for Barclays Wealth Americas.
He is responsible for architecting the portfolio of strategic initiatives supporting the
provision of Advice to wealth management clients. Much of his role consists of
simplifying the highly complex, by focusing on one fundamental principle: deliver the
best experience for Clients and Advisors that serve them. Prior to joining Barclays in
2014, he worked for Merrill Lynch, as Head of Merrill Lynch One strategy and business
development, and executed on consolidating multiple investment advisory products
into one single platform. He has been in the industry for 17 plus years, in a variety of
strategic roles, and started out as a lawyer (but dont hold that against him). When he
can find free time, he plays in a band, and has written and sold a screenplay. He
currently resides in New Jersey, where he grew up, with his wife Kimberly, three children,
and a beagle.

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