Family Wealth Management - Why Do People Fail to Sign A Business?

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1 Name Title FAMILY WEALTH MANAGEMENT: GENERATIONAL WEALTH CONVERSATIONS Helping families successfully transfer wealth MFS does not provide legal, tax or accounting advice. Clients of MFS should obtain their own independent tax and legal advice based on their particular circumstances. The views expressed are those of the speaker and are subject to change at any time. These views do not necessarily reflect the views of others in the MFS organization MFS Investment Management. 111 Huntington Avenue, Boston, MA

2 GENERATIONAL WEALTH CONVERSATIONS Understand: why transfers fail Plan: to avoid mistakes Communicate: to engage and educate

3 UNDERSTAND: WHY TRANSFERS FAIL Parents Don't have a plan Don't communicate the plan Heirs Fight each other Fight the plan Don't get/accept advice

4 UNDERSTAND: WHY TRANSFERS FAIL Comfortable discussing with your adult children (Extremely/Very Comfortable) Personal health issues Politics Religion Your wishes upon your death Your money 79% 75% 73% 73% 69% Sex 42% Source: MFS Investing Sentiment Survey, February 2016 Methodology: MFS, through Research Collaborative, an independent research firm, sponsored an online survey of individual investors with $100,000 or more in household investable assets (nonretirement) who make or share in making financial decisions for their household and licensed financial advisors (either FINRA or SEC) who have been licensed for at least three years with at least $500,000 annual mutual fund sales. In September 2015, 620 advisors were surveyed. In February 2016, 561 investors and 404 advisors were surveyed. MFS was not identified as the sponsor of the survey. Gen Y refers to investor respondents ages <36. Gen X refers to investor respondents between the ages of Boomers refers to investor respondents between the ages of GI/Silent refers to investor respondents over 70 years of age.

5 UNDERSTAND: WHY TRANSFERS FAIL Have discussed family wealth management with advisor Helpfulness of family wealth management discussion with advisor Yes 31% No/Not Sure No/Not Sure 69% 61% Yes 39% 79% Extremely helpful 18% 4% Somewhat helpful Not very/not at all helpful Source: MFS Investing Sentiment Survey, February 2016

6 UNDERSTAND: WHY TRANSFERS FAIL What Investors Will Do With Any Inheritance Money Why Investors Have/Expect to Move Inheritance Money to a Different Firm Move all/some of it to another advisor/firm 48% Have advisor relationship elsewhere I am happy with 39% Better investment opportunity elsewhere 30% Keep it where it is 26% Desire to minimize firms I do business with 29% Geographic distance (firm/advisor not close by) 20% Not a significant enough balance to justify keeping it there 15% Spend it 18% Other/not sure 12% Need more help than would be available 12% Not sure 7% Prefer to work with an advisor my own age 9% Dislike firm/advisor it was with 5% Source: MFS Investing Sentiment Survey, February 2016

7 UNDERSTAND: WHY TRANSFERS FAIL Heirs and the family cottage

8 PLAN: TO AVOID MISTAKES 1. Create a family "map" 2. Identify legacy needs for each

9 PLAN: TO AVOID MISTAKES

10 COMMUNICATE: ENGAGE AND EDUCATE Engage family members early and often: Account openings Gifting discussions Joint meetings with advisors Educate for tomorrow: Who: to talk to when the time comes How: to avoid mistakes What and where: documents and accounts

11 COMMUNICATE: ENGAGE AND EDUCATE Author not affiliated with MFS Investment Management or any of its subsidiaries.

12 COMMUNICATE: ENGAGE AND EDUCATE. Authors not affiliated with MFS Investment Management or any of its subsidiaries.

13 COMMUNICATE: ENGAGE AND EDUCATE Outline a giving plan Funding areas - Cultural, Education, Social Programs, Environment ect. Local vs. Global Organization Amount and Percentage Legacy wished

14 FAMILY WEALTH MANAGEMENT GENERATIONAL WEALTH CONVERSATIONS Successfully transfer wealth: Understand: why transfers fail Plan: to avoid mistakes Communicate: to engage and educate

15 Questions? Thank you. Unless otherwise indicated, logos and product and service names are trademarks of MFS and its affiliates and may be registered in certain countries.issued in the United States by MFS Institutional Advisors, Inc. ( MFSI ) and MFS Investment Management. Issued in Canada by MFS Investment Management Canada Limited. No securities commission or similar regulatory authority in Canada has reviewed this communication. Issued in the United Kingdom by MFS International (U.K.) Limited ( MIL UK ), a private limited company registered in England and Wales with the company number , and authorized and regulated in the conduct of investment business by the U.K. Financial Conduct Authority. MIL UK, an indirect subsidiary of MFS, has its registered office at One Carter Lane, London, EC4V 5ER UK and provides products and investment services to institutional investors globally. This material shall not be circulated or distributed to any person other than to professional investors (as permitted by local regulations) and should not be relied upon or distributed to persons where such reliance or distribution would be contrary to local regulation. Issued in Hong Kong by MFS International (Hong Kong) Limited ( MIL HK ), a private limited company licensed and regulated by the Hong Kong Securities and Futures Commission (the SFC ). MIL HK is a wholly-owned, indirect subsidiary of Massachusetts Financial Services Company, a U.S.-based investment advisor and fund sponsor registered with the U.S. Securities and Exchange Commission. MIL HK is approved to engage in dealing in securities and asset management-regulated activities and may provide certain investment services to professional investors as defi ned in the Securities and Futures Ordinance ( SFO ). Issued in Singapore by MFS International Singapore Pte. Ltd., a private limited company registered in Singapore with the company number M, and further licensed and regulated by the Monetary Authority of Singapore. Issued in Latin America by MFS International Ltd. For investors in Australia: MFSI and MIL UK are exempt from the requirement to hold an Australian financial services license under the Corporations Act 2001 in respect of the fi nancial services they provide. In Australia and New Zealand: MFSI is regulated by the U.S. Securities and Exchange Commission under U.S. laws, and MIL UK is regulated by the U.K. Financial Conduct Authority under U.K. laws, which differ from Australian and New Zealand laws

CAPACITY MANAGEMENT: A KEY RISK MEASURE

MFS White Capability Paper Series Focus Month May 2016* 2012 Authors CAPACITY MANAGEMENT: A KEY RISK MEASURE Michael T. Cantara, CFA Head of Global Client Group Joseph C. Flaherty Jr. Chief Investment