John P. Higginbotham. Senior Vice President Wealth Management Senior Investment Management Consultant Financial Planning Specialist

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1 John P. Higginbotham Senior Vice President Wealth Management Senior Investment Management Consultant Financial Planning Specialist

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3 My Mission To provide comprehensive financial services through prudent planning to help affluent clients grow, preserve and transfer wealth. To offer a disciplined, coordinated wealth management process, including investment guidance, tax and estate planning, trust services, debt management and insurance protection. To help you achieve your retirement goals by creating an all inclusive financial strategy, integrating the services of other professionals such as CPA s and estate/tax attorneys. To provide ongoing education and a detailed written plan for each client. And above all, treat client and family relationships with the highest level of objectivity, responsiveness and integrity. My Philosophy If a tree falls in the forest and nobody hears it, does it make a sound? In other words, if there is an opportunity in your life but you don t act upon it, is it likely to benefit you? If there is a problem in your life but you don t recognize it, misdiagnose it or fail to take appropriate action, can it hurt you? My job is to help people identify their goals and develop a strategic plan to manage their wealth pursuant to their goals. It s all about helping clients achieve the quality of life they deserve. MORGAN STANLEY SMITH BARNEY/1

4 My Background JOHN P. HIGGINBOTHAM Senior Vice President Wealth Management Senior Investment Management Consultant Financial Planning Specialist I am a Senior Vice President-Wealth Management. In 2010, I celebrate 28 years of service all with the same company, Morgan Stanley Smith Barney. For the past 13 years, I ve had the designation of Senior Investment Management Consultant, a designation given only to the firm s top financial consultants employing professional asset management. I currently manage assets for individuals, corporations, corporate retirement plans, endowments and foundations. IRA Rollovers are also a part of my business. In addition, I have developed a specialized niche in working with widows, divorcees and their professional advisors. With me, you will have the guidance of a professional who has a solid, respected reputation among his peers as well as his clients. In addition, you have access to one of the most comprehensive ranges of financial services available in the marketplace. Born and raised in Fresno, California, I reside here with my wife, daughter and son. I graduated from the University of California, Berkeley in 1970 with a Bachelor s Degree. Thereafter I received a J.D. Degree from Lincoln University School of Law in Sacramento, California. I am active within the community, volunteering time and service to various nonprofit organizations, as well as serving on several Boards. 2/MORGAN STANLEY SMITH BARNEY

5 Wealth Management Defined Wealth Management means one thing to clients and another thing to financial advisors. From your perspective it means having your financial challenges solved and your financial situation enhanced. From my perspective, it means my having the ability to deliver a full range of financial products and services in a consultative way. It goes beyond traditional investment ideas and strategies to encompass all types of financial needs throughout all three phases of your financial lives; wealth accumulation, wealth preservation and wealth transfer. In its simplest form, wealth management comprises three phases: 1. Using a consultation process to establish a close relationship with you in order to gain a detailed understanding of your goals and your most important financial wants and needs. 2. Offering customized choices and strategies designed to fit your needs. This select range of interrelated financial services and products might include, for example, investment management, insurance, estate planning, and retirement planning. 3. Delivering these customized strategies in close consultation with you and any other professionals that require involvement. To organize your thinking and approach to wealth management, I use a single, all encompassing formula: Wealth Management = Investment Consulting + Advanced Planning + Relationship Management The easy shorthand for this formula is this: WM = IC + AP + RM Investment consulting is the core offering for many wealth managers and the foundation upon which they begin to build the client relationship. Advanced planning addresses the range of financial needs beyond investment consulting. It consists of four areas: wealth management, wealth transfer, wealth protection, and charitable gifting. Finally, Relationship management involves three key tasks: first, fully understanding clients needs and meeting those needs over time through a consultative process; second, assembling and managing a network of financial experts; and third, working effectively with your other professional advisors, such as your attorneys and accountants. MORGAN STANLEY SMITH BARNEY/3

6 The Way I Do Business Professional Client Service Model Your personalized Total Client Profile will be based upon indepth questions in seven different categories, for your unique situation, needs and dreams. I use a mind-mapping approach to create a graphic representation of your Total Client Profile. I will then identify suitable options for your goals and objectives. Monitoring your account continuously, I may point out needed adjustments due to market movements or goal changes. I ll take as much time as you need with your questions and concerns. Dedication To My Clients I genuinely care about you and your family. I am passionate about providing you with ongoing information so you can be a knowledgeable partner in reaching your financial goals and dreams. Exemplary Service Standards I put your goals and your satisfaction first. Respect, responsiveness, follow-through and integrity help me to continually earn your business. You are supported by my Senior Sales Assistant for all administrative concerns. A Comprehensive Approach To Wealth Management I believe in looking at the big financial picture, because every aspect of your financial life affects all other components. That s why I coordinate efforts among the various professionals in my firm, as well as working with your professionals to create a coherent financial strategy. I also take a leadership role in working with specialists in charitable giving, taxes, estate planning, succession management, long-term care and all types of insurance. This complete approach can help determine accountability needed for achieving your goals. 4/MORGAN STANLEY SMITH BARNEY

7 Taking an Unbiased Approach to Managing Your Assets These days, it s not hard to find investment advice in every news and magazine media. With all this information available, many investors might wonder why they need a professional investment consultant. The answer is simple: perspective and experience. Sophisticated investors and trustees recognize that the increasing complexities of today s financial markets call for the objectivity, experience and expert evaluation of an investment management consultant, who can establish realistic objectives by helping you: Set parameters of risk Determine percentage of assets exposed to the equity market and/or the fixed-income market Locate other appropriate asset categories Develop an expected return, based on risk level Measure performance based on acceptable indexes Using an Investment Policy Statement An investment management consultant also helps you align all your investments into a single, cohesive strategy designed to meet your long-term financial objectives. An investment policy statement becomes a blueprint to help you: Keep your goals and objectives up front at all times Communicate clearly to all parties involved Maintain continuity in uncertain environments Take the emotion out of the investment decision Establish the standard by which the decisions and results of managers and funds can be measured in terms of progress toward your goal Adding value Once you ve determined the type of investments you require, the next step naturally is to identify and select the best money managers aligned with your goals. As an investment consultant, I can play a vital role in the design, monitoring and management of your portfolio. With my experience and perspective in selecting money managers, I can help you to evaluate the risk-and-return characteristics of each investment management style you consider. When you work with me, you re accessing one of the best investment consultants for your financial goals. Let me help you take an unbiased approach to managing your assets. MORGAN STANLEY SMITH BARNEY/5

8 The Pitfalls of Investor Psychology Increasingly researchers are discovering that certain subconscious reactions can often lead investors to make poor financial decisions that can damage their long-term investment performance. This field of study-behavioral finance examines how psychology influences the choices investors make. Traditional financial theory assumes that investment decisions are entirely rational, based on the objective evaluation of all available information before making a decision. Behavioral finance theorists project that investor thinking is often guided by subtle biases and blind spots, called cognitive illusions. Overconfidence: Investors habitually assume they know more than they do. They also tend to reinterpret past decisions to exaggerate their own foresight. This can lead to overly aggressive trading. Mental Accounting: Rational theory states that investors should make decisions based on their total portfolio. Yet, many investors consciously or unconsciously divide their wealth into separate pots. If they have a big gain, for example, they may consider that house money and take larger risks than they would with their own money. Anchoring: Logically, investors should base their decisions on current prices and expectations. But, they often fixate on past prices, such as what they paid for a particular stock. That s why investors often refuse to sell at a loss, even when they could earn more by moving their money elsewhere. Loss Aversion: In a rational world, the risk of loss and the possibility of gain should carry equal weight. But investors tend to put twice as much importance on avoiding losses. This may explain why investors traditionally have demanded higher returns on stocks than bonds. Avoiding investment errors begins with recognizing the biases that can cause them. The Consulting Group has a fourstep, disciplined investment process that can help you develop a long-term investment strategy and adhere to that strategy, regardless of market conditions. Morgan Stanley Smith Barney does not provide tax or legal advice. To the extent that this material or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Any such taxpayer should seek advice based on the taxpayer s particular circumstances from an independent tax advisor. 6/MORGAN STANLEY SMITH BARNEY

9 Fixed Income Services A service for affluent fixed-income investors Today, an expanding fixed-income marketplace offers investors a variety of new tax- exempt and taxable fixed-income choices. This marks a dramatic shift from the plain vanilla instruments that dominated the scene more than a decade ago. Ironically, these choices, as well as the size and volatility of the bond markets, make it very difficult for many investors to keep pace. Morgan Stanley Smith Barney has designed a comprehensive program that provides the tools necessary to assist substantial investors in managing their fixed-income assets. The changing Marketplace These days, structuring an appropriate fixed-income portfolio requires a lot more than just choosing intermediate- or long-term bonds and holding them to maturity. Over the past few years, it s likely that you ve faced a number of new investment challenges, including; Interest rate fluctuations Bond calls Changes in relative value among fixedincome sectors and products An erratic credit environment New federal tax laws Heightened market volatility Changing retirement plan rules Investors can change, too Changes in the marketplace are not the only factors that can affect your portfolio. Your personal circumstances may have changed, as well, such as: Your career Your state of residence Your investment objectives Reallocation of assets All these changes, and determining how each of these factors impacts your portfolio, may take more time and experience than you have to give. My goal is to understand you as an investor, your long-term objectives and your comfort with risk. Using our Fixed Income Services for affluent investors, I can help you create a customized portfolio that offers the best possible match between your needs and the current market environment. Plus, I can help you to receive better execution and liquidity when selling bonds, and significantly more flexibility and choice when buying. I understand the nuances of municipal bond trading and have access to one of the largest regional trading operations in the municipal bond business. As a substantial investor in these markets, you can benefit directly from our firm s enormous scope of resources. MORGAN STANLEY SMITH BARNEY/7

10 The Morgan Stanley Smith Barney Advantage My approach is simple. I want to know as much as I can about my clients, so I m in the best possible position to help them. And that doesn t mean I just want to know about their finances. True, I have to understand what your assets and liabilities are, and how your portfolio is structured. But the more important information has to do with your goals for yourself and your family, your feelings about where you are and where you hope to be and, of course, your fears, and the things that might prevent you from getting what you want. Because everyone is different, I tailor my recommendations for each client s unique set of goals and challenges. Maybe you want to retire at 55 and start a new business. Maybe you want to be able to pay both college tuition for your child and nursing home care for your mother. Maybe you re in the middle of a divorce and you want to ensure your children s inheritance doesn t go to the future spouse of your ex. This in-depth knowledge of you, combined with my in-depth knowledge of planning and investing, will help me create strategies aimed at trying to achieve the things you really want. And I have the freedom and the good fortune to implement those strategies using the products, services and skills of a large financial services firm. It s time to throw out your notions of what you can talk about with me. I look forward to the conversation. 8/MORGAN STANLEY SMITH BARNEY

11 Talk to me. I look forward to the conversation.

12 John P. Higginbotham 5250 North Palm, Suite 321 Fresno, CA TELEPHONE: TELEPHONE: FACSIMILE: fa.smithbarney.com/higginbotham Morgan Stanley Smith Barney LLC and its affiliates do not provide tax or legal advice. To the extent that this material or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Any such taxpayer should seek advice based on the taxpayer s particular circumstances from an independent tax advisor Morgan Stanley Smith Barney LLC. Member SIPC /10