The Industry s Leading Suite of Wealth Management Services. Securities America s Wealth Management Advantage

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1 The Industry s Leading Suite of Wealth Management Services Securities America s Wealth Management Advantage

2 Securities America s Wealth Management Advantage Table of Contents Introduction 1 Trust Services Premier Trust 1 Investment Banking Ladenburg Thalmann & Co. Inc. 3 Investment Research 3 Capital Markets 4 Financial Advisory 5 Ladenburg Thalmann Asset Management 6 Contacts 8 About Securities America 9 Copyright March 2012, Securities America Financial Corporation, all rights reserved. For Broker/Dealer Use Only.

3 Introduction With more than 10,000 baby boomers retiring every day (Pew Research Center, 2010) and more than 5.5 million households having $1 million or more in investable assets (Frank, 2010), the future is full of opportunity for financial advisors. But competition for these clients will be fierce. Advisors will need to demonstrate the ability to provide comprehensive wealth management tools and solutions to attract and retain high net worth and mass affluent clients. Securities America, through its parent company Ladenburg Thalmann, offers its advisors The Wealth Management Advantage A comprehensive suite of wealth management tools, services and resources. The Wealth Management Advantage provides a clear competitive edge in serving mass affluent and high net worth clients by allowing them access to resources typically not available to independent financial advisors. The Wealth Management Advantage TRUST SERVICES WMA INVESTMENT BANKING The Wealth Management Advantage provides a clear competitive edge in serving mass affluent and high net worth clients. ASSET MANAGEMENT Trust Services Premier Trust As the United States population continues to age, advisors stand on the precipice of the largest shift of wealth transferring from one generation to the next in history (Boston College, 2003). Though this creates great opportunity for advisors, it also can be a significant challenge. According to research conducted in 2009 by Rothstein Kass, an accounting and professional services firm, 86 percent of heirs in global family offices intend to fire the registered investment advisor used by their parents once they inherit their wealth. Utilizing advisor-friendly trust services insulates advisors from the possibility of losing business when assets are transferred from one generation to the next. Advisors utilizing these services also demonstrate the ability to serve the affluent and mass affluent client s need for estate and tax planning as they age. Securities America advisors are able to provide industry-leading trust services and solutions through Premier Trust, a subsidiary of Ladenburg Thalmann. Premier Trust is able to work with the advisor and the client s other professional advisors on every aspect of the financial plan and serve as administrator of revocable trusts, ILITs, charitable trusts, asset protection trusts, dynasty trusts and trusts that custody non-traditional assets. A significant advantage in working with Premier Trust is its flexibility in allowing advisors to serve as investment managers to their trusts. This enables advisors to use their preferred Securities America advisory platform, such as Managed Opportunities or FAP, to manage trust assets just as they would a client s qualified or non-qualified account. 1

4 Naming Premier Trust as successor trustee on a client s existing revocable trust or adding dynastic provisions are two strategies advisors might discuss with clients. Clients benefit by having professional management and administration of trust assets after the death of the grantor. Advisors benefit by maintaining the assets under management as the assets are passed to the next generation. As a result, this simple strategy can increase the value of an advisor s book of business by increasing the stickiness of their assets under management. Premier Trust Helps an Advisor Save an Account An experienced advisor had a long-standing investment advisory relationship with an insurance company for the asset management of his statutory reserves. The insurance company s account was held in a brokerage account at the clearing firm in the name of the company. A significant advantage in working with Premier Trust is their flexibility to allow advisors to serve as investment managers to their trusts. After a merger, auditors informed the insurance company it would be required to hold reserves in trust and would no longer be able to hold assets in a simple brokerage account in the company name. The advisor knew if the reserves were placed in trust with a bank or institutional trust company, he would lose the account. The advisor contacted Premier Trust and, within a week, was able to present a solution to the insurance company. The company now uses Premier Trust as custodian for the benefit of the company s reserves in an account at the same clearing firm, and the advisor retained the assets under management. The cost to the insurance company is only $2,000 per year, a very reasonable fee to maintain the relationship with an advisor they know and trust. Premier Trust Helps an Advisor Gather $2 million in Additional Assets During a review meeting for a client with several small accounts, an advisor learned the client was beneficiary of an irrevocable trust established by his father holding $2 million. The trust was being managed by the trustee a national bank and trust company. The client was dissatisfied with both the administration of the trust and the investment management inside the trust. The advisor asked Premier Trust to review the trust document to determine if the trustee could be replaced. It was determined that it was possible, and the process was discussed with the advisor and his client. The client executed the appropriate documents, and Premier Trust was named the new trustee. With the client s approval, Premier Trust opened an investment management account in the name of the trust so the $2 million could be managed by the advisor. 2

5 Becoming an expert on the services available through Premier Trust provides the opportunity for advisors to present solutions for all of a client s trust planning needs. It also increases the likelihood of landing larger accounts and controlling assets and wealth for multiple generations. Advisors can learn more by participating in Premier Trust s monthly webinar covering a variety of estate and trust planning topics. To automatically receive an invitation to the webinar, advisors can their request to INFO@PREMIERTRUST.COM. Investment Banking Ladenburg Thalmann & Co. Inc. Today s high net worth client frequently has a unique set of challenges over and above asset management, insurance and financial planning. They are sophisticated investors seeking access to unique investment solutions. They frequently may be owners or executives of successful businesses in need of raising capital or transition planning. The Securities America Wealth Management Advantage provides access to investment banking services through its parent company, Ladenburg Thalmann. Ladenburg s investment banking history dates back to After joining the New York Stock Exchange in 1879, Ladenburg quickly became one of the most influential private merchant banking firms, serving as a major financial intermediary between America, Great Britain and the European Continent. Among the few investment banks to prosper during the Depression, Ladenburg played an important role in financing the growth of American industry through the early 20th century. Ladenburg s investment banking activities are divided into three distinct disciplines: investment research, capital markets and financial advisory. Today, Ladenburg s investment banking activities are divided into three distinct disciplines: investment research, capital markets and financial advisory. Leveraging these resources provides advisors of Securities America a clear-cut edge in attracting and retaining affluent clientele. Investment Research Ladenburg Thalmann s equity research team provides proprietary, actionable research on approximately 165 public companies. Research includes a special focus on yield oriented securities in the areas of master limited partnerships (MLP), publicly traded mortgage and property real estate investment Trusts (REIT), business development corporations (BDC), energy, power & infrastructure, health care and technology. Investment Research Categories Special Situation Biotechnology MLPs Sector Specialties REITs BDCs Technology Power Infrastructure Exploration & Production 3

6 Advisors may benefit from this proprietary investment research in a number of scenarios: (1) Clients desiring publicly traded alternative investment strategies Yield and income producing components of non-traded alternative securities as a portion of an overall asset allocation are attractive to many clients. At the same time, they may be concerned about the illiquidity and lack of transparency in these nontraded options. Since Ladenburg s research covers publicly traded MLPs, REITs, and BDCs as sector specialties, advisors may benefit from the research to assist in finding publicly traded alternative securities. (2) Clients with sector expertise Clients with a background in energy, health care, and technology may express interest in discovering investment opportunities in these specific sectors. Advisors may rely upon the equity research of Ladenburg to uncover opportunities for these clients. Ladenburg Thalmann equity research provides research team coverage on over 165 public companies in a variety of sectors that may be of interest to clients looking for additional satellite opportunities. (3) Core and satellite investors looking for something unique More affluent clients will, on occasion, have additional money outside of their core asset allocation and investment strategy for which they seek additional opportunity and desire to be more speculative. This is often referred to as the core and satellite approach. Ladenburg Thalmann equity research team provides research coverage on over 165 public companies in a variety of sectors that may be of interest to clients looking for additional satellite opportunities. Securities America advisors can access the Ladenburg Thalmann proprietary equity research through the e*office website by clicking on the Investment Research tab and then Equity Research link. This leads directly to the Ladenburg Thalmann proprietary website, where the coverage universe, research reports and contact information for each analyst can be found. Capital Markets Securities America s partnership with Ladenburg Thalmann allows advisors to provide two distinct capital market opportunities to their clients: investing opportunities and capital raising opportunities. Investment Opportunities Each year Ladenburg participates as an underwriter on initial public offerings (IPO) and follow-on offerings. The opportunity to participate in offerings of publicly listed securities is typically limited to a small number of investment banks and their affiliates. As such, these investment opportunities are unique to Securities America s advisors and clients as, in general, most independent firms do not have the ability or capacity to participate in such offerings. In general, these offerings are attractively priced for investors. For example, follow-on offerings are always priced at a discount to the stock s previous trading price. Additionally, the underwriters are permitted to provide after-market 1 support, which maintains liquidity in the market, if necessary. As members of the Ladenburg Thalmann network of broker/dealers, Securities America advisors may have access to distribute such offerings to their clients as investment opportunities. Certain qualifications must be met by the advisor, and the client to be eligible to purchase these offerings. 2 4

7 Capital Raising Advisors working with successful business owners or executives of midsize to large corporations know these clients often face unique challenges in running their business. At times, they need to explore taking their company public or finding avenues to raise additional capital. Ladenburg Thalmann, working as an investment bank since 1876, is experienced and ready to collaborate with advisors to help present solutions for their clients. Areas of capital market specialty include: Initial Public Offering (IPO) The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand but can also be done by large privately owned companies looking to become publicly traded. Follow-on Offerings An issue of shares of stock that comes after a company has already completed an IPO. Private Investment in Public Equity (PIPE) The sale of company stock at a discount for the purpose of raising capital. PIPE offerings may be structured to offer common stock, preferred stock or convertible debt. Private Placements The sale of securities to a relatively small number of select investors as a way of raising capital. Private placements are the opposite of public issues, in which securities are made available to the general public. Financial Advisory Having a client sell a business can be a windfall for a financial advisor. It is not uncommon for such a transaction to free up millions of dollars in investable assets. Other clients may just need professional guidance on valuation, restructuring or other business strategies. Securities America Wealth Management Advantage, via collaboration with the investment banking unit of Ladenburg Thalmann, gives advisors the advantage of offering their clients a full suite of financial advisory services. Specialty services include: These investment opportunities are unique to Securities America s advisors and clients as, in general, most independent firms do not have the ability or capacity to participate in such offerings. Valuations Business owners may seek valuation services for a transaction, tax planning or accounting compliance. Ladenburg professionals can determine the value of private companies, closely held business interests, limited partnership interests, intellectual property, intangible assets and corporate securities with marketability concerns. Restructuring A company may face the prospect of selling operations or assets to recapitalize or seek bankruptcy protection. Ladenburg is able to represent debtor and creditor groups in restructuring in or out of court. Mergers & Acquisitions Ladenburg assists its clients with merger and acquisition services in scenarios including: development and implementation of acquisition strategies, sales of private and publicly held companies, divestiture of subsidiaries, going private transactions, leveraged buyouts and joint ventures. Fairness Opinions A report, rendered for a fee, examining the facts of an offered purchase price in a merger and acquisition transaction. Solvency Opinions A report, rendered for a fee, providing assurance as to whether a company is able to meet its debt obligations. 5

8 Ladenburg M&A Services Lead to New Assets Under Management Ladenburg Thalmann Asset Management provides advisors the advantage of being able to provide a full suite of financial advisory services to their clients. An advisor had a long-standing client who was the majority owner of a large commercial cleaning business with annual revenue of $45 million and annual cash flow of approximately $4 million. The business owner was looking to slow down, and because he didn t have a family member in the business, he was considering a sale. The business owner asked the advisor for advice. The advisor facilitated an introduction to the Investment Banking group at Ladenburg Thalmann. The Ladenburg professionals took the time to learn and understand the business and ran a confidential sale process resulting in a liquidity event for the owner. The advisor was kept in the loop during the entire process and received a portion of the Ladenburg fee for the referral in addition to capturing a significant amount of the sale proceeds for investment in an advisory account. Ladenburg Thalmann Asset Management Ladenburg Thalmann Asset Management (LTAM) is focused on providing advisors professional investment solutions and services to help grow their business. They are an experienced money manager and offer mutual fund wrap (LAMP) and separate account portfolios (ICS). In addition to their money management services, LTAM s request for proposal (RFP) service allows advisors to compete for large institutional accounts that are often difficult to land for independent advisors. Asset Management Services LTAM fully supports an advisor s business and the process of gathering assets with portfolio review services, client communications and sales ideas. A key benefit of working with LTAM is full access to the portfolio management team, including quarterly conference calls for advisors and clients. LTAM models are constructed and maintained using fundamental and quantitative data. A stringent screening process is employed in selecting the best possible investment solutions, and unwavering objectivity guides positioning of the portfolios to achieve investment goals. Advisors should check with their Securities America Advisors consultant to determine the most appropriate SAA platform to access LTAM models. In addition, advisors can access the LTAM due diligence summary of all mutual funds and ETFs used in the LAMP portfolios through the e*office website by clicking on the following links: Advisory Business / Programs and Bus. Dev. / Ladenburg Thalmann Asset Management / Research & Updates / Due Diligence. 6 Request for Proposal (RFP) Services Endowments, charitable organizations, foundations and large institutional investors often are bound by strict investment policy statements (IPS), and they frequently review their investment advisors performance against the IPS criteria. Many of these organizations periodically submit RFPs for the purpose of determining whether a change in investment advisor is appropriate. These cases are large and complex. They are often bound by significant time constraints, and each RFP is unique. This is where Ladenburg s RFP service can really assist advisors. Ladenburg maintains an extensive database of IPS and RFPs. They can provide numerous samples and templates to advisors and assist in timely completion of the RFP process. They also can assist the advisor in delivering the presentation.

9 RFP Service Helps Land a Big Account An advisor in the Southeast was acquainted with a number of members of a large university s endowment committee. When he learned the endowment would be coming up for bid he contacted Ladenburg Thalmann Asset Management for assistance in responding to the RFP. On the strength of the RFP, the advisor was chosen as one of the finalists to present a formal investment proposal. Again, the advisor relied upon the expertise of Ladenburg to assist in developing a final, formal proposal. The advisor s proposal was selected as the winner, resulting in $22 million account placed in the Ladenburg ICS program. As competition for mass affluent and affluent clients continues to grow it becomes ever more important for advisors to separate themselves from the competition and provide value-added services and solutions. Securities America s Wealth Management Advantage, through corporate parent Ladenburg Thalmann, gives financial advisors access to the most comprehensive suite of services in the independent broker/dealer industry. Services such as trust planning and administration, investment banking and customized asset management allow advisors to confidently compete for clients with wirehouses, trust companies and family offices. As competition for mass affluent and affluent clients continues to grow it becomes ever more important that advisors are able to separate themselves from the competition and provide value added services and solutions. 7

10 Contacts For more information on any of the services, you may contact the Securities America Wealth Management Department or any of the Ladenburg Thalmann individuals referenced here. Securities America Wealth Management Team Paul Lofties, CFP,ChFC Mory Schriever Matt Chrisman Vice President Wealth Management Senior Consultant Wealth Management Consultant Wealth Management Securities America Securities America Securities America x x x 4414 plofties@saionline.com mschriever@saionline.com mchrisman@saionline.com Premier Trust Deb Erdmann Trust Officer Premier Trust derdmann@premiertrust.com Investment Banking Equity Research David Rosenberg Co-President/Co-CEO Ladenburg Thalmann & Co. Inc. (212) drosenberg@ladenburg.com Investment Banking Capital Markets: Investment Opportunities Peter H. Blum Steve Kaplan Co-President/Co-CEO Head of Capital Markets Ladenburg Thalmann & Co. Inc. Ladenburg Thalmann & Co. Inc phblum@ladenburg.com skaplan@ladenburg.com Investment Banking Financial Advisory and Capital Markets: Capital Raising Barry E. Steiner Managing Director Investment Banking Ladenburg Thalmann & Co. Inc bsteiner@ladenburg.com Ladenburg Thalmann Asset Management and RFP Service Philip S. Blancato Jaime Desmond President & CEO COO Ladenburg Thalmann Asset Management Ladenburg Thalmann Asset Management office office cell cell pblancato@ladenburg.com jdesmond@ladenburg.com 8

11 Your Business Growth Expert About Securities America Headquartered in La Vista, Neb., Securities America, Inc. is the nation s seventh largest independent broker-dealer (as ranked by Financial Planning magazine, June 2011, based on 2010 total revenue). For more than 25 years, Securities America s mission has been to foster the success of financial professionals so they can provide quality, objective counsel and services to their clients. Advisors benefit from the firm s industry-leading programs in practice management, advisory services and retirement income distribution, supported by state-of-the-art technology. Founded in 1993, Securities America Advisors Inc. is an SEC-Registered Investment Advisory firm that offers investment management, financial advice and financial planning through a national network of independent financial advisors. Securities America received the inaugural Thought Leadership Award from the Retirement Income Industry Association in March Additional information is available at 1 After an offering, a member of the syndicate (i.e. an underwriter) is permitted to engage in a syndicate covering transaction. Two common examples are the exercise of an overallotment option and a stabilizing bid. In an overallotment scenario, in a rising market for the offering, syndicate short positions may arise from overallotments, in which the syndicate members sell more than the number of shares being offered. Instead of having insufficient shares, the managing underwriter may exercise the overallotment option and purchase up to 15% of the original offer from the issuer on the same terms and at the same price as the original shares to cover any overallotments. In a stabilizing bid scenario, a member of the syndicate is permitted to purchase shares in the secondary market to prevent a price decline. The stabilizing bid may not exceed the public offering price. 2 Advisors must complete required training and meet certain qualifications to be able to offer capital market investment solutions. Contact the Wealth Management department for additional details. 9

12 Member FINRA/SIPC Port Grace Blvd. La Vista, NE