A Personalized Wealth Program. Customized for Test Client. Presented by Sample Advisor TEST-BD-Regular, Inc

Transcription

1 A Personalized Wealth Program Customized for Test Client Presented by Sample Advisor TEST-BD-Regular, Inc Date January 8, 2015

2 Introduction On behalf of TEST-BD-Regular, Inc., thank you for the opportunity to review your investment profile and other financial information. As you know, TEST-BD-Regular, Inc. uses a holistic approach to wealth management. Our objective is to help manage your wealth in a manner consistent with helping you achieve your life goals. Your dreams, desires and means are our guide. They provide the context for all of our recommendations and direct everything we do on your behalf. Utilizing our unique Discovery process, we have prepared a custom proposal that makes specific recommendations for investment strategies and overall management of your assets. We encourage you to review the recommendations and our comments regarding them and to comment on and question any and all aspects. We look forward to working with you to ensure that your wealth is properly aligned to enable your life goals and objectives. Specific questions should be addressed directly to: TEST-BD-Regular, Inc. 1 Freedom Valley Drive Oaks, PA (work) jrotella@seic.com

3 Your Advisory Team TEST-BD-Regular, Inc. leads a team of dedicated wealth management professionals to focus on you. We have chosen to work with SEI, a leading global provider of wealth services, to offer you a unique level of investment sophistication, solution integration and focused attention to your goals and objectives. Working with TEST-BD-Regular, Inc. you can be confident that you are receiving high quality objective advice tailored to meet your specific needs. Positioned for Success Test Client We understand that you require the necessary knowledge, experience and guidance to not only prepare for retirement but to reach other family and lifestyle goals. To help you achieve these goals TEST- BD-Regular, Inc. uses tools and services provided by SEI built on four integrated competencies: Expert Financial industry knowledge TEST-BD-Regular, Inc. Cutting-edge investment strategies and products World-class asset management technology On-going commitment to research TEST-BD-Regular, Inc. combines these capabilities with our own in-depth skills, training and experience along with our in-depth knowledge of your specific financial picture to focus on your ultimate success. The program services described in this proposal are provided by SEI Investments Company and/or its subsidiaries (SEI).

4 SEI Corporate Overview SEI (Nasdaq:SEIC) is a leading global provider of investment processing, fund processing, and investment management business outsourcing solutions that help corporations, financial institutions, Financial Advisors, and ultra-high-net-worth families create and manage wealth. As of 30-Jun-13, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $507 billion in mutual fund and pooled or separately managed assets, including $204 billion in assets under management and $303 billion in client assets under administration. For more information, visit Carefully consider the investment objectives, risk factors and charges and expenses of the Funds before investing. This and other information can be found in the Funds prospectuses, which may be obtained by calling DIAL-SEI. Read it carefully before investing. There are risks involved with investing, including loss of principal. Current and future portfolio holdings are subject to risks as well. Diversification may not protect against market risk. There is no assurance the objectives discussed will be met. Past performance does not guarantee future results. For those SEI Funds which employ the manager of managers structure, SEI Investments Management Corporation (SIMC) has ultimate responsibility for the investment performance of the Funds due to its responsibility to oversee the sub-advisers and recommend their hiring, termination and replacement. SIMC is the adviser to the SEI Funds, which are distributed by SEI Investments Distribution Co. (SIDCO). Custody services provided by SEI Private Trust Company (SPTC), a limited purpose thrift. SIMC, SIDCO and SPTC are wholly owned subsidiaries of SEI Investments Company. Neither SEI nor its subsidiaries are affiliated with your advisor. For those portfolios of individually managed securities, SIMC makes recommendations as to which manger will manage each asset class. SEI may recommend the termination or replacement of a money manger and the investor has the option to move the account assets to another custodian or to change the manager as recommended. For a complete description of all fees and expenses for separately managed accounts, please refer to SEI Investments Management Corporation s ADV Part 2A.

5 Evolution of SEI s Process Much of SEI s success has been driven by consistent innovation and improvement on the solutions they provide to their clients. As a result of partnering with SEI, we will be leveraging a process with an established track record which has a reputation for client focus. The chart below illustrates the evolution of SEI s product and service offering.

6 Our Process Managing Your Wealth to Support Your Life At TEST-BD-Regular, Inc., we see you, your life, and the way you should invest from a unique perspective. Where you want to go in life and managing the risks that can hamper your progress is what really matters. Here are the five steps we ll take to get you there: (1) In Discovery we ll help clarify your life goals, and arrange them by timeframe and priority. We ll explore how specific goals fit into the greater picture of your life and we ll challenge your previous investment assumptions if they only focused on your immediate financial concerns. (2) Then we ll Assess the needs and issues surrounding each of your goals and develop a clearer perspective for what needs to be done. You ll have complete clarity regarding your risks as well as your opportunities. (3) Together, we ll Evaluate options and select from numerous goals-based scenarios that reveal how you can ultimately use your wealth to achieve your most significant objectives. (4) We will work within a disciplined environment to Implement a program whose elements remain consistent with your life s goals. We ll make your vision come to life. (5) By Monitoring & Adjusting your program, we ll help you anticipate and deal with life s inevitable changes. We re prepared to help with the unexpected, and ready to recommend options for adjusting your life and wealth program to ensure that it continually supports the way you want to live.

7 Our Investment Philosophy In a highly volatile investment world, how can you build a plan for long-term success? What does it take to sift through thousands of investment opportunities and identify the relative handful that complement your specific goals, time horizon and risk tolerance? Where can you find experienced, highly skilled portfolio managers who will add value to the investment process and keep your plan on track? At TEST-BD-Regular, Inc., we believe that a consistent, disciplined approach to portfolio management offers the best chance for success. That is why we have selected to work with SEI to provide our clients with an established and disciplined investment process. For every client, a tailored investment strategy is developed, incorporating asset allocation and diversification designed to meet your precise needs. You can benefit from access to sophisticated investment strategies and top-tier investment managers including some that are not typically available to individual investors.

8 Our Approach Overlaying your life onto investment research and analysis At TEST-BD-Regular, Inc., our investment philosophy is focused on meeting clients objectives while managing risk. This tailored approach to the development of investment strategy has evolved over time so that our clients portfolios can be positioned to take advantage of market inefficiencies and the attractive opportunities they present. The most important part of the approach is understanding our clients and their needs. Only then can we begin building an investor s particular investment strategy. At TEST-BD-Regular, Inc., we believe this comprehensive approach to discovery and assessment can be one of the most critical conversations we have with our clients. In this conversation, a number of questions need to be thoroughly explored: 1) What specifically are your goals and objectives? Near-term? Long-term? Mandatory? 2) What are the risks to be guarded against in the process? And what are the consequences of guarding against and dealing with each of these risks? Only when these questions have been fully discussed and defined can the investment process begin. We work with SEI to initiate an investment process which is based on the following principles: 1) Asset Allocation Creating strategies with appropriate diversification among asset classes and between investment approaches, both of which are critical drivers of investment success. 2) Portfolio Design identifying alpha source(s), or returns in excess of benchmark returns, across our equity, fixed-income and alternative investment portfolios. 3) Investment Manager Selection Evaluating individual holdings in addition to monitoring manager performance. 4) Portfolio Construction and Management Using investments with complementary objectives designed to ensure diversification of risk and return within the portfolio. 5) Tax Management Helping investors to keep more of what they earn through year-round efforts to reduce tax obligations. 6) Risk Management Overseeing each manager s investment approach in alignment with the objectives of that segment of the portfolio. Diversification may not protect against market risk.

9 SEI s Manager Selection Process Choosing the right money managers for your portfolio One of the key foundations of SEI s investment philosophy is the use of multiple portfolio managers, each focusing on a particular investment style as well as investment approach. We believe that a manager s style and approach are both critical to investment success. For example, in addition to evaluating managers who focus on the fundamental valuations (e.g. price/earnings, price/book ratios) of individual stocks, SEI researches managers who employ "macro" quantitative models, which seek to benefit from specific market factors and trends. At the same time, they continuously evaluate managers in all major asset classes and market sectors. In SEI s experience, blending contrasting investment techniques is generally successful in supporting clients return objectives, while enhancing portfolio risk management. In effect, SEI acts as a "manager of managers", selecting top investment talent from a global network of money managers who concentrate on different sectors and styles. The manager selection process is an exacting, step-by-step approach that starts with the unique first step of identifying opportunities, inefficiencies and diversified sources of returns in the markets. This research, coupled with a client s portfolio objectives, drives SEI s search parameters. * Initial universe includes global equity and fixed income managers. More than 19,000 Managers in initial universe* 3,000 Managers remain after initial fundamental screen 1,000 Managers remain after qualitative screen 45 Managers qualify

10 SEI s Manager Research Parameters: Performance: SEI compares a manager s performance against a benchmark relevant to the manager s investment style. The consistency in a manager s returns and returns across market cycles are also examined. Philosophy: SEI looks for specialist money managers who have a clearly defined investment philosophy and process such as managers with fundamental or quantitative processes or managers who have a preference for large or small companies. Process: SEI examines how a firm puts its philosophy into action and looks for firms with a commitment to researching new investment opportunities and a discipline in making buy and sell decisions. People: Because an investment firm s primary assets are its people, SEI looks for stable, well managed firms that they believe have the ability to attract and retain outstanding investment management talent. They also look for companies with a team approach to investing, rather than those that may rely solely on the talents of their individual managers. Continuous Portfolio Management: After a manager is chosen, dedicated SEI analysts continuously and rigorously monitor its philosophy, process, people and performance. In addition, they use sophisticated technology capabilities which allows them to monitor managers regularly checking portfolio holdings and trades, and ensuring that the investment portfolio is aligned with the overall strategy and objectives. Still, SEI understands that no matter how thorough the evaluation process, even the most careful investment plan is subject to the natural fluctuations of the markets. This can cause allocation targets to drift from their original positions and produce unexpected risk. SEI addresses such inevitable change through a twostep process of continuous portfolio management. First, the asset mix of SEI s portfolios is periodically rebalanced to their targeted points. This is designed to reduce risk and keep a specific investment strategy on track. Second, through ongoing monitoring and manager reviews, SEI ensures that the managers investment approaches remain consistent with the objectives of their segments of the investment portfolio. And if SEI s analysis indicates that a management firm has deviated from its philosophy or failed to achieve stated goals, that manager can be replaced. Because taxes play an integral role in our investment process, a special focus on tax management is employed to control implications within your portfolio and to help you enhance after-tax returns.

11 Investment Summary The following chart is based on our recent discussion around your current objectives and financial opportunities. Our ability to provide appropriate advice begins with an understanding of your current financial position. An analysis of your financial circumstances, including available money, time horizon, liquidity needs, objectives and tolerance for risk, has enabled us to assemble a complete picture of your current financial situation. Your personal profile below reflects our recent discussions. Broad Asset Allocation Overview: Proposed Account Name: Strategy Selection: Investment Selection: Initial Investment: Test IRA Private Client Core Market Mutual Funds $500, Note: The underlying asset class exposure of the Multi-Asset Class funds is revealed in the Broad Asset Allocation Overview pie chart shown on the Investment Summary page only. On all other pages only the allocation to the Multi- Asset Class funds is shown.

12 Strategy Detail Private Client Core Market Implemented with Mutual Funds for Test IRA Account Overview The Core Market Strategy is the most suitable strategy for you based upon your particular investment objectives, your time horizon and your attitude towards investment risk. This diversified strategy supports goals that seek asset growth through broad equity and bond market participation. The Strategy is balanced between growth oriented securities and investment grade bonds. Performance is not guaranteed and the portfolio may experience losses. Strategy Structure The Core Market Strategy's assets will invest primarily in U.S. and/or foreign common stocks and U.S. investment grade fixed income securities, including mortgage-backed fixed income securities. The Strategy will invest to a lesser extent in U.S. and/or foreign non-investment grade fixed income securities and securities of REITs and/or real estate companies. These investments may be held through SEI mutual funds and/or directly in a portfolio of securities chosen by SEI Investments Management Corporation (SIMC) or by individual managers that are selected by SIMC. The Strategy's assets will be allocated within the following percentage ranges: U.S. Equity: 20-70% International Equity: 0-30% REITs and/or Real Estate Companies: 0-20% Investment Grade Bonds & Money Market: 30-75% Non-Investment Grade Bonds: 0-30% The asset allocation of the Strategy may change within the stated ranges based on occurrences in the market or changes in SEI's capital market assumption research.

13 Private Client Core Market Implemented with Mutual Funds for Test IRA Account Investment Solution This Mutual Fund strategy has been designed to address your goals and objectives. A mutual fund strategy typically provides a highly diversified, customized alternative to purchases of individual retail mutual funds. This method of implementation can be an attractive alternative for investors who seek a diverse asset allocation of stocks, bonds and cash in order to manage overall investment risk, desire access to mutual funds that are comprised of specialist money managers designed to manage riskadjusted returns, want to benefit from institutional money managers while avoiding typical institutional minimums, and are looking for a portfolio that offers flexibility. Strategy Allocations

14 Private Client Core Market Implemented with Mutual Funds for Test IRA Account This chart breaks down all the securities held in this strategy, from high-level asset classes, to sub-asset classes and styles, through to the approximate number of securities held within each style. Breaking out all of the components of the strategy in this fashion gives you a general sense for the level of diversification in your proposed portfolio.

15 Private Client Core Market Implemented with Mutual Funds for Test IRA Account The outline below shows the detail of your portfolio diversification based on the initial investment you specified for this investment strategy. Asset Allocation Investment Weighting Value Alternative Other Alternative Multi-Strategy Alternative Fund (SMSAX) 5.00% $25, Domestic Equity Large Cap Core Large Cap Fund (SLGAX) 15.00% $75, Small Cap Core Small Cap Fund (SLLAX) 3.00% $15, Domestic Fixed Income High Yield Bonds High Yield Bond Fund (SHYAX) 9.00% $45, US Fixed Income U.S. Fixed Income Fund (SUFAX) 17.00% $85, International Equity Emerging Markets Equity Emerging Markets Equity Fund (SIEMX) 3.00% $15, International Equity International Equity Fund (SEITX) 7.00% $35, International Fixed Income Emerging Markets Debt Emerging Markets Debt Fund (SITEX) 7.00% $35, Multi-Asset Class Other Multi-Asset Accumulation Multi-Asset Accumulation Fund (SAAAX) 20.00% $100, Multi-Asset Income Multi-Asset Income Fund (SIOAX) 3.00% $15, Multi-Asset Inflation Multi-Asset Inflation Fund (SIFAX) 10.00% $50, Taxable Cash Taxable Money Market Prime Obligation Fund (TPRXX) 1.00% $5, Total: % $500, Note: The underlying asset class exposure of the Multi-Asset Class funds is revealed in the Broad Asset Allocation Overview pie chart shown on the Investment Summary page only. On all other pages only the allocation to the Multi- Asset Class funds is shown.

16 Private Client Core Market Implemented with Mutual Funds for Test IRA Account Available fund managers for the funds in this portfolio have been listed below: Emerging Markets Debt Fund (SITEX) Investec Asset Management US Ltd. Neuberger Berman Management Inc. Stone Harbor Investment Partners LP Emerging Markets Equity Fund (SIEMX) Delaware Investments JO Hambro Capital Management Kleinwort Benson Investors International Ltd. Lazard Asset Management Neuberger Berman Management Inc. PanAgora Asset Management High Yield Bond Fund (SHYAX) Ares Management, LLC Benefit Street Partners LLC Brigade Capital Management, LLC Delaware Investments JP Morgan Investment Management Inc. International Equity Fund (SEITX) Acadian Asset Management Inc. Blackcrane Capital LLC Causeway Capital Management Henderson Global Investors Ltd Intech Investment Management, LLC Neuberger Berman Management Inc. Tradewinds Global Investors Large Cap Fund (SLGAX) AQR Capital Management Aronson+Johnson+Ortiz, LP Brown Investment Advisory Incorporated Jackson Square Partners LLC LSV Asset Management Waddell & Reed Investment Management Co. Multi-Asset Accumulation Fund (SAAAX) AQR Capital Management PanAgora Asset Management Multi-Asset Income Fund (SIOAX) Guggenheim Investment Management, LLC State Street Global Advisors Multi-Asset Inflation Fund (SIFAX) Alliance Bernstein, LP QS Investors LLC Multi-Strategy Alternative Fund (SMSAX) SEI Investments Management Corporation Prime Obligation Fund (TPRXX) Bank of America Capital Management, LLC Small Cap Fund (SLLAX) Alliance Bernstein, LP AQR Capital Management EAM Investors LLC Fiduciary Management Associates Montibus Capital Management LLC Robeco Investment Management Snow Capital Management L.P. Victory Capital Management Inc U.S. Fixed Income Fund (SUFAX) Jennison Associates, LLC JP Morgan Investment Management Inc. Metropolitan West Asset Management Wells Capital Management Inc. Western Asset Management

17 Program Expenses The fees based on the value of this proposal are described below. Because the fee is calculated as a percentage of your assets, the exact amount of your fee will vary based upon changes in your total portfolio value resulting from appreciation, depreciation, withdrawals, or additional contributions. Total Proposed Account Value: $500, Advisor Fee: 0.95% Investment Fee: Test IRA 1.06% Total Fee 2.01% Your fee covers all the costs associated with your investment program including: Compensation to TEST-BD-Regular, Inc. for the development and ongoing monitoring of your investment program Your investment program recommendations Ongoing monitoring and rebalancing of your investment strategy Customized quarterly reporting and monthly statements All ongoing investment manager due diligence provided by SEI The Investment Fee consists of different expenses based on your specific Program implementation. If your Program is implemented through SEI s managed account programs, this fee consists of SEI s managed account fees and, if applicable, the product fees for any SEI mutual fund included in your Program. Product fees for Exchange Traded Funds (ETFs) are not included in the Investment Fee. For all other investment programs, this fee represents a blended total product fee comprised of the weighted average of assets included in your Program.

18 Summary of Program Services Fundamental to achieving your financial objectives is constructing an investment program that not only manages your wealth in conjunction with your life, but also adjusts over time to keep you on track. We ve prepared this proposal with the expectation that we will continue to monitor, manage, evaluate and advise it on an ongoing basis. The following represents a list of our program services that you will receive as a result of our working relationship: Our On-Going Advice & Analysis We will work with you on a regular basis to keep your investment program rigorously focused on your needs. We will continually review changes in your financial circumstances and investment profile, as well as the markets and investment offerings, to make sure that your program stays synchronized with your profile and objectives. Together with SEI, our singular focus is to position you to meet your financial goals, today and in the future. Reporting and Review Process The performance of your portfolio and its individual components will be monitored and reported to you on a quarterly basis. Your overall investment program will be reviewed with you at least annually to assure that you are making progress against your investment objectives while staying within your overall tolerance for risk. Manager Selection and Monitoring Your portfolio will be composed of, and managed by, a diversified group of the industry's top investment managers. We will work with SEI to ensure that your investment managers are held to the highest standards of investment process, style and compliance. Our quantitative and qualitative approach to maintaining your portfolio will, we believe, improve your portfolio's performance over time. However, the use of these methods and the accompanying historical performance information is no guarantee of future performance. Automated Portfolio Rebalancing The percentage weighting assigned to each asset class within your portfolio can and will vary as different asset classes perform differently over time. These weightings will be allowed to fluctuate within reasonable ranges, depending on market conditions, but will be automatically rebalanced back to your target weightings if these ranges are exceeded. Electronic Statement/Report Delivery Online statements through offer a convenient way for you to view and receive your monthly and quarterly account statements. If you have a personal computer, online Internet access, and enjoy the convenience of monitoring your investments electronically, you are welcome to use this modern alternative to hard-copy statements. PortfolioAccess.com also offers the convenience of downloading current investment account information directly into Quicken(R) Personal Finance Software**. Downloading monthly and quarterly account information allows you to manage your investment accounts, along with your personal and household finances, without having to manually enter information into Quicken. ** For more information on Quicken Personal Finance Software, please visit

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