The RGL Group at Morgan Stanley: Working With You 2013 From Left to Right: Robert M. Ryan: Senior Vice President Seth Albeck: Registered Associate, Lissa Stuart: Senior Registered Associate, Adrian J. Wong: Registered Marketing Associate Craig A. Lewis: Senior Vice President Robert M. Ryan CFP, CIMA, CPWA Senior Vice President Wealth Advisor Senior Portfolio Manager 125 High Street, 24th Floor Boston, MA 02110 Direct: (617) 478-6463 Fax: (617) 946-5104 rgl_group@morganstanley.com www.morganstanleyfa.com/therglgroup Craig A. Lewis Senior Vice President Wealth Advisor Executive Financial Services Director FIVE STAR Wealth Manager recipient 2010-2012 Adrian J Wong Registered Marketing Associate Morgan Stanley Smith Barney LLC. Member SIPC.
About Us We guide successful individuals, executives, entrepreneurs, and small business owners through personal and business life cycles. Our first-class service is predicated on a commitment to our client to organize, prioritize, and customize solutions. We value consistent communication, open dialogue, accountability, and integrity. We continuously monitor your financial progress so that you can spend more time with the people and interests you love most. As of January 2013, our team currently manages over $250 million in client assets and liabilities. 2
The Morgan Stanley Culture What we do: Advise, originate, trade, manage and distribute capital for governments, institutions and individuals, and always do so with a standard of excellence. How we do it: Execute in a way that is consistent with our values and, whenever possible, deliver more than my part of the Firm. With what result: Deliver strong returns for our shareholders. 3
Biographies of Financial Advisors Robert Ryan CFP,CIMA,CPWA Senior Vice President, Wealth Advisor, Senior Portfolio Manager Bob is a Senior Vice President, Wealth Advisor, and Senior Portfolio Manager; he began his career in 1991 with Merrill Lynch. Bob focuses on financial planning, as a CERTIFIED FINANCIAL PLANNER and an accredited portfolio manager in the Portfolio Management program. He received his CERTIFIED INVESTMENT MANAGEMENT ANALYST certification from the Wharton School of business as well as his CERTIFIED PRIVATE WEALTH ADVISOR designation from the Chicago s Booth School. He works closely with client attorneys and accountants to help ensure that all aspects of our client s financial plan and asset allocation have been established and implemented. Bob currently serves on the Board for the Woburn Boys and Girls Club and also serves as Treasurer of the NF Foundation. Bob lives in Winchester with his wife Rebecca, daughter Isabella, sons Thomas and Devon. Bob holds a B.A. in Accounting and Computer Science from University of Mass at Lowell. www.linkedin.com/in/bobmryan1 Craig Lewis Senior Vice President, Financial Advisor, Executive Financial Services Director Craig is a Senior Vice President and Financial Advisor; he began his career in 1991 with Merrill Lynch. Craig is an accredited portfolio manager in the Portfolio Management program and works with our clients to create highly customized investment management strategy focusing on tax sensitivity and risk management. He also works with our firm s specialists in the areas of alternative investments and concentrated equity positions. Craig is one of the few advisors who can conduct international business, concentrating in working with international clients primarily in Israel. He lives in Newton with his wife Karen and daughters: Gabriella, Haley and Madison. Craig holds a B.A. in Political Science and a minor in Business from the University of Wisconsin. www.linkedin.com/craigmlewis Adrian Wong Registered Marketing Associate Adrian Wong was born in Monterey Park, California and pursued undergraduate studies at Bentley College in Waltham, MA. There he graduated with a bachelors of science in finance and minor in management with cum laude honors in May 2008. Adrian has been with Morgan Stanley, its predecessor firms and with the RGL Team since 2007. Adrian has been very passionate for entrepreneurial early stage growth companies and acts as a liaison to the start-up community. Adrian currently spends time volunteering in local start-up communities such as the MassChallenge, Venture Café, DogPatch Labs, DartBoston, non-profits Future Boston Alliance and Millennium Campus Network, and actively involved with Bentley s Alumni Association. 4
Biographies of Associates Lissa Stuart Senior Registered Associate Lissa began her career in 1986 with E.F. Hutton as a Margin Analyst. The majority of her career was with Merrill Lynch as a Registered Client Associate. Her focus is working with individual and corporate clients to address their daily account needs. Lissa is an active non-profit volunteer, most recently with Beacon Hospice in Beverly, MA. Lissa holds a BA in Economics from Wheaton College. Seth Albeck Registered Associate Seth Albeck graduated from the University of Delaware with a degree in finance in 2009. Upon graduating, Seth began his career as a financial advisor at Maxim Group when he transitioned to Morgan Stanley Smith Barney in 2011 as an integral member of the operations team in a New York complex. Seth is FINRA series 7 and 63 licensed. 5
Our Organization Process 5. 45-day follow up meeting 1. Discovery Process Identify your goals, values, dreams, social concerns/chal lenges 3. Investment Strategy Meeting In-person meeting to present recommended investment strategy In person meeting to discuss: First statements Organization of paperwork Set up online account access (and review online resources) Develop schedule for future review meetings Schedule wealth management plan meeting 7. Wealth management plan meeting In-person meeting to present comprehensive wealth management solutions 8. Execute wealth management plan Ongoing execution of wealth management solutions 14 Days 20 Days 90 days Ongoing 65 Days 2. Develop Investment Strategy Determine risk tolerance Analyze current investment portfolio Develop asset allocation strategy 4. Execution of Investment Strategy Open new accounts Transfer existing assets Conduct trades to execute agreed-upon investment strategy 6. Develop comprehensive wealth management plan Comprehensive financial planning Retirement planning Access to Credit and lending Insurance and liability management Education Planning Business Succession Planning Charitable Giving Family Dynamics Estate Planning 9. Ongoing monitoring of Investment strategy and wealth management plan Develop schedule for review meetings Portfolio construction 6
Wealth Planning Center The goal of the Wealth Planning Center is to examine, in depth, the complete range of financial issues faced by our wealthy clients and suggest courses of action. The idea is always to create actionable plans that provide some of the best possible solutions for our best clients. The WPC takes a consultative, tailored, intellectually robust, and comprehensive approach. An experienced staff of credentialed professionals, including trust and estate attorneys 1, who remain current with tax rules, regulations, practices and help educate clients on proven strategies for working towards their wealth management goals and objectives including risk management and philanthropy. Suggested detailed wealth planning concepts are presented to help clients secure and perpetuate their long-term financial well-being. A Holistic Viewpoint of Your Clients Concerns, Needs, Goals, and Objectives, including strategies regarding: Wealth Transfer Stock Option & Executive Compensation Concentrated Stock Positions Section 1042 Exchanges Sale of Stock to an ESOP Retirement Planning Business Succession Charitable Giving Trust Kenneth Johnson Ken Johnson is an Executive Director and the Wealth Planning Director for Morgan Stanley Smith Barney for the New England region. In his capacity as Wealth Planning Director, Ken works with Financial Advisors and their high net worth clients to develop Wealth Management Plans that incorporate comprehensive financial and estate planning strategies. Prior to joining Morgan Stanley Smith Barney, Ken served as Chairman of the trusts and estates group at the Boston law firm of Burns & Levinson LLP. He has over 20 years experience as an attorney representing individuals and business clients in connection with the development and implementation of sophisticated estate planning documents and techniques. He has represented clients before the Internal Revenue Service and state tax authorities. Ken holds a Bachelor of Arts degree in economics from Brown University in Providence, Rhode Island. He received his law degree from Suffolk University Law School and a Masters of Taxation law degree from Boston University School of Law 1Although they may be admitted attorneys, planning directors and other wealth planning center personnel holding legal degrees are actigin purely in a non-representative capacity. Neither they nor Morgan Stanley Smith Barney provide tax or legal advice to clients or to Morgan Stanley Smith Barney. 7
Morgan Stanley Systematic Approach Business Owner Standard Who Should Be On Your Team? Assembling a team of trusted advisors should be one of the first steps in selling your business. Think of this as assembling your personal brain trust to bounce ideas, concerns, and scenarios off. While each situation is different, we recommend this list of essential members: Accountant Wealth Advisor Team [The RGL Group] Owner Estate Attorney The Business Owner Standard is a comprehensive program that combines analytics with execution to help meet the financial needs of your business while also considering your personal wealth objectives. We can work with specialists and the professionals on your team to explore your company s need for capital, your management succession plan, the asset allocation in your personal portfolio and your most pressing family needs, as well as many other key items. The next step is to present you with actionable strategies to achieve your goals. Such key areas of focus are: Growing your business Maximizing retirement benefits Protecting the value of your business Planning for a succession, sale or merger Planning for you and your family If you would like a copy of The Business Owner Standard brochure, please contact our office. Investment Banker Corporate Attorney 8
Corporate Client Services Corporate Client Group Directors The Morgan Stanley Smith Barney Corporate Client Group is a team of 300 specialized advisors who have the training and expertise to service Citi Group and Morgan Stanley corporate clients.. Corporate Client Group The Corporate Client Group is a division of Morgan Stanley Smith Barney whose platform encompasses the marketing of various employee benefits programs to corporations. Global Stock Plan Services: Provides brokerage; record keeping and other administrative services related to equity-based employee compensation programs for corporate clients. Stock option automated exercise services and trade execution services. Restricted stock and restricted stock unit plan services Other equity compensation products (e.g. SARS) FAS 123R Reporting Services Executive Financial Services: Provides regulatory guidance and assistance to corporate executives and holders of concentrated positions. Specializes in providing transaction, legal and advisory services. Guide corporate executive and director clients on strategies include: sales, gifts, pledges and purchase of restricted and control shares. Comprehensive knowledge of the regulations governing restricted and control securities transactions. Executive Benefits Services: Markets non-qualified benefit plans, primarily elective deferred compensation programs, for corporate executives ( NQDC Plans) Corporate Cash Management: Markets short-term institutional fixed income capabilities. May include investment policy review, portfolio man agent and Financial Accounting Standards Board ("FASB") Directed Share Programs: Entails carving out a portion of the total number of shares in an Initial Public Offering ("IPO") and reserving them for purchase by a group of individuals designated by the Issuer. Capital Strategies Group: The Capital Strategies Group is focused on helping business owners with these transitions. We specialize in providing liquidity solutions to owners of businesses with an enterprise value of $20 million to $200 million. Our services include: Mergers and Acquisitions: Sell Side and Corporate Divestitures Partial exits, including recapitalization, for the business owner looking to retain some ownership involved in the business. Employee Stock Ownership Plans (ESOPs) Capital Solutions Corporate Retirement Services: Markets qualified retirement plans, 401(k) plans and defined benefit plans. This business is supported through the use of third-party providers that specialize in such programs. 9
What Is Your Comfort Level? Source: Institutional Investor, Beyond Markowitz: A Comprehensive Wealth Allocation Framework for Individual Investors, Spring 2005 10
Investment Platforms Defined We utilize four basic portfolio types to manage risk & return. They are used in conjunction with each other. 1. Asset Allocation portfolio (Multiple Asset Classes) This portfolio focuses on creating an integrated asset allocation plan. It will blend ETF s, mutual funds and/or SMA s (separately managed accounts). It will offer both Strategic & Tactical models ranging from conservative to aggressive. Over 650 investment options in more than 60 different asset classes are selected and monitored by the Investment Advisor Research group. 2. Total Return portfolio (Blend of Fixed Income & Equity Income) This portfolio is managed directly by RGL Group. It will blend various types of investments which have a yield component. The portfolio will be primarily composed of fixed & floating rate bonds, dividend oriented stocks and Structured notes. This portfolio would range from very conservative to moderately aggressive. 3. Relative Strength Sector Rotational portfolio (Diversified Equities) This portfolio is geared toward growth by focusing on capital appreciation potential derived from investing in a diversified portfolio of primarily Mid to Large-Cap equities. A technical model is applied to generate the buy & sell trades. Typically this portfolio is geared for investors with at least a 3-5 year time horizon. 4. Alternatives Investments (Hedge Funds & Non-traditional Assets) Alternative Investments provide qualified investors with exposure to markets and investment strategies that cannot be accessed through traditional fixed income and equity markets. Their inclusion tends to result in reduced overall volatility given their historically low correlations to more traditional asset classes. 11
Creating Your Customized Financial Path STEP 1: Determine and Measure Financial Goals STEP 2: Determine Emotional Asset Allocation STEP 3: Personalized Portfolio Construction Current allocation vs. proposed allocation Optimization of investment managers and strategies Correlation Analysis Asset Location Step 5: Review: Measuring Process Toward Achieving Client Goals and Rebalancing Based on IPS If research indicates a change in return expectation If client s circumstances change Tax Codes change Tax harvesting STEP 4: Creation of Investment Policy Statement Cementing: Asset Allocation Risk Tolerance Liquidity Requirements 12
Wealth Management Process I. Executive Summary Current Assets Time Horizon Overall Portfolio Expected Return Loss Limit Evaluation Benchmarks Asset Allocation II. Investment Objectives Financial goal Funding towards Goal III. Investment Philosophy Risk tolerance Diversification Costs Taxes IV. Investment Selection Criteria Mutual funds, stocks, fixed income, alternative investments, etc. V. Monitoring Procedures Lower Limit (%) Target (%) Large-cap value stocks 15 20 25 Large-cap growth stocks 20 25 30 Mid/small-cap stocks 15 20 25 International stocks 5 10 15 Bonds 10 15 20 Alternative Investments 0 5 10 Upper Limit (%) Cash 5 5 10 For Illustrative Purposes Only 13
Use Us to Leverage Your Time Morgan Stanley The RGL Group Comprehensive Financial Planning Retirement Planning Access to Credit and Lending Estate Planning You You Insurance and Liable Management Family Dynamics Education Planning Charitable Giving Business Success Giving 14
Our Accountability Client Reviews Insurance Reviews Comprehensive communications and performance reporting Personalized communications offering (i.e., portfolio manager insights, research reports, news on specific stocks) Timely research and updates on market or economic trends Opportunities to attend financial and investment education events David Darst Breakfast Ed Kerschner Thematic Investment Ideas Business Owner Succession Planning Act as a liaison to your other professional advisors (accountant, lawyer, estate attorney, et. al) 15
Morgan Stanley Smith Barney LLC offers insurance products in conjunction with its licensed insurance agency affiliates. Information contained herein has been obtained from sources considered to be reliable, but we do not guarantee their accuracy or completeness. This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this material may not be suitable for all investors. Morgan Stanley Wealth Management recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor s individual circumstances and objectives. Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC ( Morgan Stanley ), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice and are not fiduciaries (under ERISA, the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise agreed to in writing by Morgan Stanley. This material was not intended or written to be used for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Individuals are encouraged to consult their tax and legal advisors (a) before establishing a retirement plan or account, and (b) regarding any potential tax, ERISA and related consequences of any investments made under such plan or account. Morgan Stanley Smith Barney LLC offers a wide array of brokerage and advisory services to its clients, each of which may create a different type of relationship with different obligations to you. Please visit us at http://www.morganstanleyindividual.com or consult with your Financial Advisor to understand these differences. Trust and other fiduciary services are provided by third parties, including Morgan Stanley Private Bank National Association, a wholly-owned subsidiary of Morgan Stanley. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP, CERTIFIED FINANCIAL PLANNER and federally registered CFP (with flame design) in the U.S.,which it awards to individuals who successfully complete CFP Board s initial and ongoing certification requirements. Investment Management Consultants Association, Inc. owns the marks CIMA, Certified Investment Management AnalystSM (with graph element), and Certified Investment Management AnalystSM. Alternative investments often are speculative and include a high degree of risk. Investors could lose all or a substantial amount of their investment. Alternative investments are suitable only for eligible, long-term investors who are willing to forgo liquidity and put capital at risk for an indefinite period of time. They may be highly illiquid and can engage in leverage and other speculative practices that may increase the volatility and risk of loss. Funds of funds typically have higher fees than single manager vehicles as they are subject to an additional layer of fees charged by the fund of funds manager. Alternative investments involve complex tax structures, tax inefficient investing and delays in distributing important tax information. Investors should consider the investment objectives, risks, charges and expenses of a fund carefully before investing. The individuals mentioned as the Portfolio Management Team are Financial Advisors with Morgan Stanley participating in the Morgan Stanley Portfolio Management program. The Portfolio Management program is an investment advisory program in which the client s Financial Advisor invests the client s assets on a discretionary basis in a range of securities. The Portfolio Management program is described in the applicable Morgan Stanley ADV Part 2, available at www.morgan stanley.com/adv or from your Financial Advisor. Holdings are subject to change daily, so any securities discussed in this profile may or may not be included in your account if you invest in this investment strategy. Do not assume that any holdings mentioned were, or will be, profitable. Custom Portfolio/Portfolio Management is an advisory program in which the client s Financial Advisor invests the client s assets on a discretionary basis in a wide range of securities. Diversification does not guarantee a profit or protect against a loss. Crescendo (5-Star Local List) Source: Crescendo Business Services' FIVE STAR: Best in Client Satisfaction Wealth Managers, February, 2009 & 2010, 30,000 to 80,000 consumers most likely to use the services of a financial services representative (identified by Crescendo) and 4,000 to 8,000 financial service professionals (identified by Crescendo) are asked to name and evaluate up to three financial advisors. The number of individuals in the sample varies based on the size of the local market. In addition to the survey results, other evaluation criteria, such as a minimum of five years' financial services experience, acceptable compliance records, and evaluation results by a panel of local industry experts are incorporated into the overall evaluation process. The final list identifies the wealth managers, of those evaluated, in the local market that score highest in client satisfaction. For more information on the rating methodology, go to http://www.fivestarprofessional.com. The FIVE STAR Wealth Managers do not pay a fee to be included in the research or the final list of FIVE STAR Best in Client Satisfaction Wealth Managers. The overall evaluation score of a wealth manager reflects an average of all respondents and may not be representative of any one client s evaluation. The inclusion of a wealth manager on the list should not be construed as an endorsement of the wealth manager by Crescendo or Boston Magazine. The rating is not indicative of the Financial Advisor's future performance. Morgan Stanley Smith Barney LLC. Member SIPC CRC 639877 3/22/2013 16